Strategic Ops

Note: The following problem is fictitious but employs names of, and news from, real organizations. The idea is to increase the reality of the situation, and to improve your awareness of various industries and organizations.

You are an operations analyst at specialty retailer Gap (GPS). Gap operates primarily through three divisions: Old Navy, Banana Republic, plus the flagship GAP chain.

Shareholders are pressuring the CEO to improve company performance. He's looking for ideas from the corporate retail operations group (to which you belong) on what to do.

Your boss, the operations director, has asked you to compare Gap operations to two retailers that have strong competitors: Abercrombie and Fitch (ANF) and Target (TGT).

Because you've had solid analytical training in college, your approach will be to examine key operating decisions that Gap has made and compare them to ANF and TGT.

Select at least 5 decisions from this list that are important to retailers like Gap. Explain why you are selecting them. You might find some helpful thoughts from Minyanville's Jeff Macke on the importance of some key retail decisions here, here, here (nice focus on the location decision), here, and here. (NOTE: Jeff's dad was president/CEO of Target/Dayton Hudson's during the company's growth years).

Once you've selected the key decisions you'll use as factors in your comparison, you'll need to gather data that compares Gap to Abercrombie and Target. There are many ways to do that. You can research articles in the business press. As Jeff demonstrates in his missives above, a great way to gather data on retail ops is to visit some stores. Observational data can be a very effective way to gather comparative data on company operations. Consider hitting the the mall, to do some investigative work.

Include some competitive price info in your analysis.

Once you've collected your data, present them in a table that compares the decisions at each company. This table will form the centerpiece of your analysis.

Some key questions to consider:

How do key operating decisions at Gap compare to Abercrombie and Target?
Do these decisions support a strategic theme (i.e., low cost of differentiation)? How well do Gap's operating decisions 'hang together' to support a strategic theme compared to Abercrombie and Target?
Should Gap consider migrating its set of operating decisions more towards either Abercrombie or Target? Be sure to explain yourself.
What's a conservative next step for your company?

In your memo to your boss, be sure you describe your analytical method. This should include the data that you're using, where you got it, and how you plan to use it in your analysis.

Also, remember to cite your sources.