Global Business and Technology

Essay by calif4meUniversity, Bachelor'sA+, January 2008

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While researching a company to write about I ran across the company Gap Inc. Gap is a clothing retail store here in the US that caters to the younger generation. With a decrease in sales in the US and other global markets such as Germany and France, Gap has announced a franchise agreement with a Middle East based retailer Al Tayer Group. Working with a fashion conscience culture Gap is predicting the Middle East market will have a positive impact on the company's global exposure and increase the company's earnings.

In the summer of 1969 Gap opened their first retail store in San Francisco, California and as the business grew the company was always looking for opportunities to expand in becoming a world renowned business and brand name: Gap Inc. Over the years Gap formed and acquired other companies marketing brand names like Old Navy and Banana Republic. The new introductions increased Gap Inc's market share and company exposure.

In order to stay competitive in the fashion industry Gap began buying their merchandise from foreign countries. The risk Gap took by deciding to take on a global supply chain caused the company to carry excess inventory due to the long turn around times from supplier to store. Trying to predict the latest in fashion was difficult and ordering well in advance was not a good business strategy. Gap Inc. invested in a legacy system that was capable of supporting the company's supply chain thus managing inventory and the pipeline more efficiently.

As Gap started opening stores internationally there was an inherent need to upgrade the technology of their legacy system. In 2006 Gap signed up with IBM in a non-exclusive service agreement where IBM "operates certain significant aspects of our information technology infrastructure" (Gap Inc., 2006). With IBM managing Gap's...