Gap Inc. Organizational Research

By Jeff Stats

Gap Inc. is a leading international clothing retailer offering attire, accessories and personal care products for men, women, children and babies. They produce under brands such as Gap, Banana Republic and Old Navy. Also Gap brand includes Gap, GapKids, babyGap, GapBody and Gap Outlet. They have their headquarters in the San Francisco Bay Area, the product development offices are located in New York City, while distribution operations and offices dealing with sourcing activities can be found around the globe.

Gap Inc. has created a “Code of business conduct” in which essential issues of conducting a business, employees’ behaviors and corporate culture are outlined. It contains the letter to employees which states the main principles that operate in Gap Inc. The company was originally founded and to this day is maintaining the principle of conducting business in a responsible, honest and ethical manner. Currently Gap Inc. remains committed to setting and meeting the highest standards of business conduct, because for them nothing less will do. They also make such commitments to their shareholders, neighbors, customers and one another not only because it is a legal duty, but because it’s the proper thing to do. The company claims that their reputation depends on the integrity and excellence in everything they do. Clearly such statements shape company’s overall vision of how they operate and what they expect from their employees. This code was designed to promote an ethical work environment, with all the necessary issues descried in it such as reporting the violations, responsibilities, laws that apply to different countries in which the company operates.

Gap Inc. was founded in 1969 by Donald and Doris Fisher in San Francisco, California. When they started there was only one store and a couple of employees. Today, they are one of the world’s largest specialty retailers, with fiscal 2004 revenues of $16.3 billion. They are producing and selling clothes to men, women, kids and babies all over the world. Such brands as Gap and Banana Republic are aimed at customers with higher incomes who are willing to buy high quality clothes, although it is not priced too high. Old Navy brand was created to fit the niche of customers such as families willing to have good looking and quality attire, but pay less for it. Many people shopping at Gap are customers in Old Navy as well, because the company’s signature in making clothes can be easily traced. In recent years the company has began production of colognes and other toiletries which are suitable for different seasonal collections and can be matched with certain clothes. Thus Gap stores, offer a full range of products from underwear and perfumes to sports apparel and winter clothes.


As already was mentioned the Gap Inc. customers are successful people who are looking for high quality and reasonable prices. With Old Navy brand it is more of a younger audience with less income to spend, Gap itself aims at middle class buyers wanting a stylish look and excellent customer service treatment. Banana Republic brand is the most expensive and the most chic one out of all presented by Gap Inc. People shopping at Banana Republic are looking for latest styles, comfort and still reasonable prices for the quality they receive. Generally company’s customers are young and middle aged people eager to try something new every season, enthusiastic about color and inspirational design.

Gap’s competitors for apparel, accessories, and personal care products are such famous American brands as Abercrombie & Fitch, American Eagle Outfitters, DKNY, Polo Ralph Lauren, and Tommy Hilfiger. Those companies are manufacturing similar products, although they are targeting a slightly different customer market. Gap however has to take a lot of effort to stay aloof among them with pricing policies, quality and design in order to retain their customers and try to gain new ones. The external threat from the new entries is a minor one because of number of reasons. The clothing/accessories market is quite difficult to enter, and it takes time to establish a brand name and gain customer loyalty and trust, so in this instance Gap is almost safe at least for some time.

Gap Inc. has stores around the globe and naturally employs people from many foreign countries. While manufacturing and distributing its products, Gap Inc.’s Sourcing and Logistics group, along with their buying agents, draw up production schedules and place orders with approved third-party factories. This process takes place in more than 50 countries where Gap products are made. Clearly Gap involves many intermediaries in making its product, designating much power and responsibilities to the factories and suppliers. It purchases from more than 1,000 vendors in 3,600 factories in more than 50 countries and approximately 13 percent of its products is sourced from China alone. The company also has a comprehensive and publicly available Code of Vendor Conduct and has instituted excellent internal monitoring programs with vendor compliance officers. Gap company was the first U.S. apparel manufacturer that developed an independent monitoring program by agreeing to let representatives of local nongovernmental groups monitor its supplier factories in El Salvador. Gap also supports human rights initiatives through its supplier education programs and a number of other projects and is a participant in the UN Global Compact. Social responsibility for Gap Inc. is a big concern and it engages in many practices to help solve environmental problems. It has number of helpful environmental projects, including a unique, environmentally efficient designed building at its headquarters. Their programs incorporate recycling initiatives for stores, use of wood from certified-sustainable forests for the flooring at its stores, as well as energy efficiency in lighting. Company’s considerations with environmental issues are also addressed in store design and construction; Gap Inc. also does not conduct or endorse animal testing on its products.

Company’s internal policies are accordingly well designed and suited to meet their employees’ expectations. It offers paid volunteer time for headquarters employees, and ensures full medical and dental benefits for domestic partners, as well as a various family-oriented benefits. Throughout the company women hold a considerable number of management positions, including the two women who are among the company’s top eight executives; there are also four women on the 15-member board of directors. Among programs supported by Gap are those focusing on helping unappreciated youth, with an emphasis on academic achievement. Health and human services, including HIV/AIDS prevention and education, community services and the arts are areas of company’s interest and sponsorship.

Bob Fisher became new Chairman of Gap Inc. in 2004 and Paul Pressler was named CEO in 2002 after Millard Drexler retired. The overall leadership style of the company may be characterized as participative leadership where all people are taking active part in building company’s future. Responsibilities are strictly outlined although can be delegated to other people in case of their approval to do so; ethical and lawful approach to conducting business and treating employees are major necessities outlines in the company policy.

About the Author: Jeff Stats is a writer at essay writing service Order quality custom essays from our essay service.


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