Global Brand Management Structure Gap Inc

Question: Describe about the Global Brand Management Structure ? Answer: Gap Inc is a company engaged in the clothing sector where the company deals with the multi brand clothing structure. The company had a benefit of the economy and the political structure of the company is stable due to the maintenance of the competitors namely from the European, Chinese and other markets. This would help the retail market of California to boost and help the company to present itself as a great competitor and market player in the world. The company is a year old company and is operating at 4th level of maturity where the company has a full access to use its resources and grow in the clothing market in the long run. The brands of gap Inc had been diversified and leading to various clients and thus results in positive structure altogether. The company in the year 2012 created a global brand management structure in order to drive the long term growth of the company and the help the company to manage the systems in a better manner. The company has planned to diversify its retails outlets in the country of South America. So the company in the recent past had planned to grow by increasing the number of retail stores so that they might able to promote the brand in a better way an d the company could increase the sales without a pinch in the marketing costs of the company. Therefore the main restructuring exercise consists of the creation of the brand leadership in the world market so that better control over the market is being gathered. The other major restructuring consists of the bringing of the North American international division and other franchising divisions under the global brand to enhance the market for the Retail division of the company would have a great effect in the restructuring. Operating Margin Operating margin of the company is around 12.35% for last five years and it is expected that it will reduce to around 11%. Expected reduction in operating margin is due to slightly increase in cost of goods sold, which is expected to increase from 57% to 60%. Whereas this increase in cost of goods sold is to some extent compensated by reduction in cost of selling, general and administration expenses by around 1%.(HUDSON, 2014) In past years, revenue of the company is not increase consistently. We can see decline in revenue in one year and further increment in next year so there is no consistent growth in revenue. However we can see there is considerable amount of growth of 7.57% in 2013, it may be due to new strategy of the company. However it is expected that company will grow its revenue by 3% year after year. If company can achieve this target then it is commendable performance by the Gap.(Frojo, 2012`) Gap Inc, in last five years performs well except the year 2012, in that period companys earning has reduced by 31% as compare to 2011; major reason for this downfall is increase in cost of goods sold and selling expenses over the years. However except 2012 company has performed well irrespective of increase in cost of goods sold. Expansion of retail outlet is demand of era for a retail company. Gap Inc also understood this and expanded well over the years. Gap Inc invested considerably year after year to increase number of its retail outlets so that it can reach to maximum customer which will also generate goodwill for company. Companys net investment in 2010 and 2013 is significantly high due to acquisition of assets.(ABRAMS, 2014) Free Cash flow of the company has varied year after year, there is no consistency in cash flow as overall digit. But when we compare free cash flow yield of one year with another year we can analyze that it is reducing with time. So company should give special attention in this matter. As the companys market share and market value will increase they should maintain a minimum level of free cash flow every year to overcome cash crunch in future. (FRANCISCO, 2012) The revenue share of Gap had been 2.14% only when the market share of the industry had grown up to 6% in the last 3 years and thus it means the cumulative market share had fallen for the company and thus this might lead to a failure in the growth aspects for the country as a whole. Thus the company has good fundamentals and thus it needs to be maintained properly.(MATTIOLI, 2011) Bibliography: ABRAMS, H. T. (2014). News about Gap Inc., including commentary and archival articles published in The New York Times. TIAS , 1-3. FRANCISCO, S. (2012). Gap Inc. Creates Global Brand Management Structure to Drive the Companys Long-Term Growth. Press Release , 1-1. Frojo, R. (2012`). Gap undergoes major restructuring. San Fransisco Business Times , 1-2. HUDSON, D. M. (2014). Gap to Slash Its Store Count. The Wall Street Journal , 1-1. MATTIOLI, K. T. (2011). At Gap, Sales Gains Are Back in Style. The Wall Street Journal , 1-1.