1. What is your opinion on the “multi-brand strategy” of Gap Inc. (Gap, Banana Republic, Old Navy, and Forth&Towne)? What are the main advantages and the main disadvantages of this “multi-brand strategy” compared to a “single-brand strategy”, i.e. compared to a strategy in which this company would have concentrated solely on the Gap brand.
In my opinion, the multi-brand strategy is the revolution of how many businesses reach their customers these days. The companies can use it to acquire greater market share than they could with fewer brands. This strategy allows a company to seize their opportunities from multiple approaches. For some benefits of the multiple brand strategy, it enables a company to get more shelf space of its products and to respond to consumer demand for something new. It can saturate a market by filling all price and quality gaps. It also offers products to brand-switchers who like to experiment with different brands. However, the only disadvantage of this strategy is the high cost for the company to operate. According to the case, Gap Inc. had positioned Gap as the purveyor of “fresh, casual American style,” Banana Republic as an “affordable luxury” retailer with an “elevated designer expression,” and Old Navy as a formidable player in the value sector” offering basic and fashionable items in a fun shopping environment. From the separation, the company will have more potential and opportunities to compete with competitors in each segment. For some advantages of the single-brand strategy, on the other hand, the company can put all the focus on brand equity and reduce the pressure on corporate management to grow the business sense of momentum and strength. In addition, this strategy helps the company to cut cost from ad ...