Introduction

Once an organization reaches its maturity and becomes profitable, it starts facing several issues. An organization is said to achieve its maturity stage when it is earning the highest profits in the market, and it becomes essential for the organization to engage in new activities to gain a competitive advantage over its competitors. Some of these issues can be related to fierce competition from the competitors, various types of internal problems can also be faced by the organization such as financial issues, management issues and numerous others. Gaps Incorporation chosen for this study is Gap Incorporation. Gaps Incis too presently being faced with some of these issues only. The paper will discuss the various problems faced by gaps Incorporation and also the recommendations to overcome the same.

Discussion

Analysis and identification of issues presently being faced byGaps Incorporation understudy 

The Company understudy carries out its operations across various countries of United States, United Kingdom, Canada, Japan and France. Gaps Incorporation is basically engaged in producing merchandise that is private label and gaps Incorporation had even made use of techniques such as credit cards through which the customers could earn points also if they made purchases outside the store however the competitors imitated the companies idea of credit card, and in fact the competitors ofGaps Incorporation are adapting to the customers’ needs at a faster rate, and as a results Incorporation’s sales and profits are declining continuously which has also ledGaps Incorporation to close its operations from many locations. Some of the other issues being faced by gaps Incorporation are that its competitors are offering lower-cost products because of their lower labour cost and various other factors. There are issues related to the internal management of gaps Incorporation, and there are financial issues as well. 

Tough competition from the competitors

One of the significant issues faced by gaps Incorporation, which is resulting in fall in its sales ad profitability is related to the fierce competition presently being faced byGaps Incorporation. Some of the major competitors of gaps Incorporation are ABERCROMBIE & FITCH CO., TJX COMPANY, NORDSTROM COMPANY and AMERICAN EAGLE. The competitors ofGaps Incorporation are trying to offer additional services to attract customers. For instance, ABERCROMBIE & FITCH Co. is offering additional services of films, postcards, photos and various other activities. The competitors also engage in direct selling from the official websites by targeting a particular age group of customers. Further, the competitors of Gaps Incorporation are attracting the customers by offering them the products at an off-price so that the customers have to pay much lesser than that is being funded by them for other companies. Further, the competitors ofGaps Incorporation are also focusing on the quality of the goods and services to attract customers. 

Financial issues of gaps Incorporation 

The company has been continuously facing a decrease in its net profits, and also there was a decline in the sales of gaps Incorporation since the year 2004. From the year to 2001 to 2004Gaps Incorporation saw an increase in sales and net profit which improved from $13.8 to $16.3 billion for the sakes ad for the net profit it developed to become 1150 dollar billion. However, it was in the year gaps Incorporation saw a decrease of 2% and 3% respectively in the sales and net profits. Further, Gaps Incorporation had to stop its operations in many locations which also affected the overall profitability ofGaps Incorporation. 

Marketing issues of Gaps Incorporation 

The company is presently being faced with the problem of customers dissatisfaction due to the lack of ability of Gaps Incorporation to adapt to the changing needs of the customers in the market. The competitors of Gaps Incorporation, on the other hand, were adapting to the same much quicker than Gaps Incorporation. Therefore Gaps Incorporation needs to make proper changes to its marketing strategies to overcome the various marketing issues. 

Geographical issues faced byGaps Incorporation 

To serve a better area of the retail apparel market, Gaps Incorporation is engaged in continuously expanding its operations across various countries. However, Gaps in Incorporation’s geographic revenues have consistently been falling since the year 2005. 

Management issues of Gaps Incorporation 

Since Gaps Incorporation is growing. Therefore, various organizational changes are taking place, which has caused various regulatory restructuring issues, and as a result, there is also a need to change the management. Moreover, to change the present scenario being faced byGaps Incorporation, Gaps Incorporation needs to change their CEO such that new CEO can helpGaps Incorporation in overcoming the issues being faced by gaps Incorporation. 

Recommendations for the issues faced by gaps Incorporation understudy 

Overcoming the competition in the market 

To overcome the competition that is presently being faced by Gaps Incorporation, Gaps Incorporation also needs to build its capability of adopting the changing customer needs in the market faster than the competitors. For this, Gaps Incorporation also needs to identify and develop its competitive advantage. For instance, since the time of formation, Gaps Incorporation has aimed at becoming the market leader by providing family clothing and also by keeping its employees and customers at the centre of all operations of Gaps Incorporation. Therefore Gaps Incorporation should try aligning its present activities with its mission and create a more flexible organizational structure and management to overcome the competition of the market, and this will also act a competitive advantage to Gaps Incorporation. 

Overcoming the financial issue

To overcome the economic problems, Gaps Incorporation can adopt various types of crisis management activities through the development of a proper crisis management plan that can be decided by the new leader Gaps Incorporation is looking for. 

Overcoming the marketing issue 

To overcome the marketing issues, Gaps Incorporation should aim at rebuilding its brand through the appointment of talent staff, creating value for the stakeholders and by focusing on the quality of the products and services being offered by Gaps Incorporation. Gaps Incorporation can also provide various types of value-added services like the competitors are contributing to the customers to win back the disappointed customers. 

Overcoming the geographic issues 

To improve the geographic revenue of Gaps Incorporation can focus on improving its relationship with the customers, they can increase their offerings to the customers, develop a new customer base in the new locations through various promotional marketing strategies and different other techniques. 

Overcoming the management issues 

To overcome all the management issue such as organizational restructuring, matters related to the leader, Gaps Incorporation is required to appoint a new CEO who can help in changing the present situation and help the organization to re-establish itself in the market. 

Conclusion

Therefore from the above discussion, it can be concluded that organizations must develop a sustainable competitive advantage to remain profitable in the long run and to overcome competitors. From the paper, the various issues that are to be faced by the organizations once it reaches its maturity stage and when it lacks any competitive advantage such as fall in sales and profitability as a result of fierce competition from competitors and various others can be understood. Therefore the issues faced byGaps Inc. can be inferred from the paper and also the recommendations suggested for this purpose has can also be seen.