National Institute of Fashion

Technology
MFM- 1st Semester (2016-2018)

COMPANY SOCIAL RESPONSIBILITY

GAP Inc.

Submitted to : Dr. D.B Dutta

Submitted by : Aashna Gupta
Ishaani Majumdar
Mandeep Kaur
Parina Sukhani
Pratibha Sharma
Tanu Priya
 CONTENT

Index

1. History Page 4
2. Objective Page 5
3. Visions and Missions Page 6
4. CSR in Gap Inc. Page 7
5. Swot Analysis Page 8
6. Conclusion Page 9
 Acknowledgement

We would like to thank National Institute of Fashion Technology for giving us the
opportunity to undertake this project.

We would like to express our deepest gratitude to Dr. D.B Dutta, professor, National Institute
of Fashion Technology, Kolkata for his constant guidance and support throughout the tenure
of this project. Without his co-operation and review, this study would not have been such a
wonderful learning experience.
HISTORY

The Gap, Inc. commonly known as Gap Inc. or Gap (stylized as GAP) is an American
worldwide clothing and accessories retailer.

Founded in 1969 by Donald Fisher and Doris F. Fisher and is headquartered in San
Francisco, California the company operates five primary divisions: the namesake banner,
Banana Republic, Old Navy, Intermix, and Athleta. Gap Inc. is the largest specialty retailer in
the United States, and is 3rd in total international locations, behind Inditex Group and H&M.

Donald and Doris Fisher, who had a difficult time finding jeans that fit, opened the first Gap
store on Ocean Avenue in San Francisco on August 21, 1969; its merchandise consisted of
Levi's and LP records. They had raised US$63,000 to open the store, and reached US$2
million in sales in the second full year of operation. In 1970, Gap opened its second store in
San Jose, California; its back room serves as the company's first replenishment warehouse. In
1971, Gap established its corporate headquarters in Burlingame, California with four
employees. By 1973, the company had over 25 locations and had expanded into the East
Coast market with a store in the Echelon Mall in Voorhees, New Jersey. In 1974, Gap began
to sell private-label merchandise.

By the late 1990s, Drexler felt that The Gap had strayed too far into the trendy genre and was
losing customers as a result. By 1996, The Gap's dominance of the fashion scene was fixed;
consumers of all ages could find something in one of its stores.

In 2007, Gap announced that it would "focus [its] efforts on recruiting a chief executive
officer who has deep retailing and merchandising experience ideally in apparel, understands
the creative process and can effectively execute strategies in large, complex environments
while maintaining strong financial discipline". In May, Old Navy laid off approximately 300
managers in lotheyr volume locations to help streamline costs.

As of September 2008, the company has approximately 135,000 employees and operates
3,727 stores worldwide, of which 2,406 are located in the U.S.

In October 2011, Gap Inc. announced plans to close 189 US stores, nearly 21 percent, by the
end of 2013; hotheyver, it also plans to expand its presence in China. The company
announced it would open its first stores in Brazil in the Fall of 2013.

In January 2015, Gap Inc announced plans to close their subsidiary Piperlime in order to
focus on their core brands. The first and only Piperlime store, based in SoHo, New York City,
closed in April.
OBJECTIVES

The focus at Gap Inc. is pretty simple: customers, creativity, doing what's right, and
delivering results. Together, they call it "they are trying your passion." And it's the perfect
match for the kind of people they attract - as both employees and customers.

Think
Customers first - They make decisions with our customers in mind. They connect with our
stores and create the quality our customers value and expect.

Inspire
Creativity - They think big, take risks and solve problems. They challenge the status quo and
always look for new ideas and ways of working.

Do
What's right - They believe that how they do business is as important as what they do. They
act with integrity, and they give back to the communities in which they do business.

Deliver
Results - They deliver the best result possible - they're committed to taking responsibility,
setting priorities and meeting our goals.
VISIONS AND MISSIONS

Vision
“Gap Inc. is a brand builder. They create emotional connections with customers around the
world through inspiring product design, unique store experiences, and compelling
marketing.”
Gap’s vision is to be the consumer’s first choice in family retail clothing while capitalizing
on customer satisfaction and shareholder value to it’s optimum.

External Factors affecting the vision of the company are :

a) Opportunities
b) Gap’s opportunity to penetrate the market overseas
c) The falling price of cotton
d) E-commerce expansion is up by 10% growth rate through 2010-2015
e) Growth in market for plus size women (currently a 42 billion dollar market)
f) Growing athlete market
g) Emerging fast fashion retails

Mission
Gap desires nothing less than to satisfy the fashion desires of their customers by providing
quality yet affordable clothing through their five competitive brands. With passionate and
fashion minded employees, the shopping experience for Gap’s clientele is incomparable;
these attributes allow Gap to be set apart from it’s competitors. Gap desires to sustain a
strong brand image by improving their presence through the use of technology to build and
maintain brand awareness. Gap desires Global Brand Recognition and to have Stores located
worldwide. Gap’s Franchising system easily to expand Gap store internationally. Gap Inc
wishes to have multiple brands and brand extensions for a wide range of segments along with
huge customer and vendor base.
 CSR in Gap Inc.

Gap has the resources and motivation to invest in a corporate social responsibility program
that enhances the external public image as theyll as for the company for it’s own interests for
the stakeholders.

The main tenant of Gaps Social Responsibility program is the idea that investing in the
community, stakeholders, employees, and shareholders leads to collective benefit for
everyone. The Gap is an example of a company trying to leverage it’s business and assets to
help innovate for social challenges. Every year, along with it’s corporate annual report, Gap
Inc. published a separate accompanying report and statement about its CSR program.

Their corporate social responsibility program is developed into three elements.

First, the supply chain; which includes, factories, vendors, suppliers and the distribution
channels to market. Second, element includes environmental impact. Thirdly, is community
and charitable giving.
Labour and Corporate Governance

In 1992 the company developed global factory compliance guidelines and a vendor code of
conduct. This practice has now become the mainstay and more or less standard within the
apparel manufacturing industry. This includes such regulations as the use of independent
monitoring, child labour restrictions, safe working conditions, transparent record keeping,
and right of association.

The Gap has taken a key step with using independent factory auditing as theyll as
their own internal factory monitors. They have partnered with the International Labour
Organization, and The Ethical Trading Initiative. In addition, in order to support the daily
living needs of labourers in the most rural and underdeveloped communities they have
collaborated with the International Finance Corporation which a sub branch of the World
Bank. According to a their annual report highlights, the Gap has 99% of all it’s factories
monitored.

Respecting Human Rights in Our Supply Chain

Garment industry jobs help many people build a better life, but some regions suffer from a
lack of infrastructure or rule of law. Gap focuses on talking with people who make our
clothes to learn of issues that need to be addressed. They strictly prohibit child or forced
labour and immediately act in rare instances when they arise. They work to ensure that people
are protected from discrimination or mistreatment, enjoy the right to freedom of association
and can raise issues at work.

1) Child Labour and Young Workers - Gap Inc. does not tolerate the use of child labour
under any circumstances. The use of child labour is explicitly prohibited by our Human
Rights Policy and our Code of Vendor Conduct (COVC). Our COVC establishes
requirements that all factories must meet to do business with Gap Inc. Both policies are
available at gapinc.com/sustainability.

2) Forced labour - The International Labour Organization (ILO) estimates that more than 20
million people around the world are forced to work against their free will. This issue has
received heightened attention over the past several years due to the innovative and diligent
work of non-governmental organizations, governments, multilateral organizations, media and
companies.

At Gap Inc., they explicitly prohibit the use of forced labour in the making of our products
through our Code of Vendor Conduct and our Vendor Compliance Agreements, and they
actively work against this violation of fundamental human rights.

3) Discrimination - They are committed to ensuring that the people who make our clothes are
not subject to any form of discrimination. And they are sensitive to both overt and subtle
types of bias: roughly 80 percent of the people who make our clothes are women, while
managers and supervisors are often men. Along with the employment of migrant workers and
the diverse ethnic backgrounds of the people who work in garment factories, these
circumstances can raise the risk of gender and ethnic discrimination.
4) Wages and Benefits - An important area of focus for us has been ensuring that the people
who make our products are paid what they deserve for their work. Factories may fail to fulfill
this obligation for a variety of reasons, such as not paying sufficient overtime premiums or
making illegal deductions from workers’ pay. In some cases, underpayments can be hard to
detect or go unnoticed by workers, as pay calculations are complicated or may not be clearly
communicated.

Commitment to equal pay

Women in the U.S. earn, on average, 79 cents for every dollar their male counterparts do. For
non-white women, the gender pay gap can be even wider. In 2014, Gap Inc. was the first
Fortune 500 company to announce that it pays women and men equally for equal work. By
paying women equitably, raising the minimum wage and speaking out against discrimination,
they believe they can help create greater equality for all of us.

Improving factory working conditions

They regularly assess our approach to working with factories in an effort to improve working
conditions for the women and men who make our products around the world. In September
2016, they made a new commitment to publish our approved list of factories twice a year.
When factory employees are treated fairly and work in safe conditions, they can perform at
their best, helping us create better products and better serve our customers. When customers,
in turn, share their expectations and feedback with us, they help to make us a stronger
company, one that can play a part in leading the industry toward further improvements.

Animal welfare policy for brands Athleta, Gap, Old Navy, Banana Republic

Athleta, Banana Republic, Gap, and Old Navy are deeply committed to the ethical sourcing
of our product, which includes the humane treatment of animals. They expect all suppliers to
make our products in an ethical and responsible way. They require that our suppliers use only
skins, down and feathers that come from animals bred for food. In addition:

 Do not use angora or real fur.

 Oppose mulesing, and are phasing out the use of mulesed wool.
 Prohibit feathers and down plucked from live birds.
 Do not allow animal testing of our personal care products.

Environment

Climate change affects people and communities everywhere, and they’re working to reduce
the absolute, global greenhouse gas emissions of our facilities by 50 percent by 2020. Gap’s
focus on the environment includes energy conservation, sustainable design, and reduction of
waste. At the company’s San Francisco headquarters, employees sort their meal waste by use
of composting and recycling bins in the cafeteria.
The company has also taken steps to decrease their environmental impact and reduce
dependence of fossil fuels. They have installed energy efficient fluorescent lights their
distribution centers saving 2 million dollars annually in energy cost.

Again Gap Inc. is collabourating with outside business organizations such as CERES and the
National Defense Council, as theyll seeking industry recognition and the accreditation for
Leadership in Energy Environmental Design or LEED.

One of the most successful environment program they have had as to date was the “Recycle
Your Blues “denim drive launched in April 2010. In collabouration with Cotton Inc., and
their “From Blue to Green” campaign, the company help market their environmental
efforts and awareness to consumers. Customers are encourage to bring in their used and
unwanted denim to Gap stores across the US to be recycled, and in return received 30% off
their next purchase of denim. Gap Inc. collected over 270,000 denim jeans that year for
conversion into the “Ultra Touch Denim Insulation” by Bonded Logic for insulating homes
and donating to those communities in need.

Gap Inc. has been one the apparel industry’s front-runners in improving the use of water in
the manufacture of denim products. Their goal is the reduction of the total amount of water
volume used in denim processing as theyll and the use re use of the wastewater. Becoming a
Clean Water Program member of the BSR group along with other denim apparel companies,
Gap Inc. is taking proactive steps to reduce the use and the lotheyring the limit of heavy
metals and chemical in water for a positive sustainable impact on the environment.

Using their business leverage, the Gap has been successfully able to influence 100% of the
mills and denim laundries for participation in the Clean Water program within their supply
chain.
Community Investment

For many years Gap Inc. has been big donor to many charities and community projects but
has not publicly discussed their philanthropy in the press. Instead of building an elaborate
internal business function within the organization to seek out just a few community and
chartable investment opportunities, the Gap has decided to instead to follow and support its
employees interests and motivation for volunteerism to help identify charitably causes. In
turn, the company has supported those charitable interests by providing leadership, self-
development and management workshop for its employees. This has lead to an exhausting list
of non-profits, causes, and community investment programs that the Gap Inc. and their
employees have been involved with.

The company matches employee’s donations to charitable organizations dollar for

dollar. Every year over 2 million dollars of company donations are given away matched by
employee donations. During semi annual sales, employees send out company coupons to the
public. To encourage the use of the coupon and drive company sales, each employee chooses
a charity to which a percentage of the sale proceeds are donated when the coupon is used.

Gap Inc. is a key supporter of CARE’s Factory Health Education Project in Cambodia, which
improves access to clinical services for garment factory workers and promotes education,
awareness and prevention of HIV/AIDS and other sexually transmitted diseases. In 2004,
Gap Inc. doubled its contribution to the Cambodia program and newly funded CARE’s
Private Sector Coalition Against HIV/AIDS in Lesotho.

The company promotes that fact that by shopping from Gap Inc., consumers are in fact
purchasing from a company that helps make the global community a better place for all.

The Gap has shown thoughtfulness, forward thinking and enthusiasm for their CSR program
which is considered admirable in the apparel industry.

STP
Segment: Clothes for intelligent, discerning and cosmopolitan people who look to clothing
to express their own personality for every occasion.

Target : Urban men and women from upper middle class.

Positioning : Fashionable – yet functional and practical.

SWOT Analysis
Strength
1.Globally known brand
2. Strong brand presence in Europe and far East
3. Innovation in the denims made, for e.g. reversible jeans which is one of its kinds
4. Operates sales in more than 56 countries with more than 3,000 stores
5. Excellent advertising and brand visibility

Weakness
1.All designs are not easily available in all markets across the world
2.Research and Development in textiles is not very difficult to emulate
3. Tough competition from other brands means limited market share

Opportunities
1. Increasing disposable income in emerging countries
2.Growing casual wear market
3. Low manufacturing and production costs in various international markets

Competitors
.Levi’s
2.Wrangler
3.Diesel

Target
1.Intense Competition from existing brands
2.Product Substitution
3.Imitation of its designs and fake products
 Conclusion
 CSR is the heart and soul of modern corporations and is an important standard for
corporate governance.
 CSR is an indispensible mechanism for both increased corporate accountability,
profitability and environmental sustainability.
 CSR is the pole star for modern collaboration in order to maintain the integrity of
moral fabrics both inside and outside the corporation while conducting socially
responsible business