SWOT Analysis of Old Navy

SWOT analysis of Old Navy is an important process aimed at determining the ability of the business to stay operational, while ensuring maximum profitability. Owned by renowned multinational, Gap Inc., Old Navy is an American retail store that deals in clothing and accessories. The retailer operates an online store, handles corporate operations in California, San Francisco and San Bruno, and selected stores across the world.

What is SWOT Analysis of Old Navy?

SWOT analysis of Old Navy outlines the strengths, weaknesses, opportunities and threats of the clothing retailer. The basis of this analysis is to enable the company to know the areas within its operational structure and market, which require re-modification for successful performance. Besides, it also helps the company in determining its strong points that should be emphasized on for sustainable business operations.

A SWOT analysis will also assist the company in identifying the available openings in the market, which can be pursued for business growth and development. Read on for a comprehensive analysis of the strengths, weaknesses, opportunities and threats of Old Navy.

Strengths

Old Navy is a brand that has been in the international market for years and considered by many as a mark of style, pop culture and fashion. This global brand recognition has ensured customer loyalty and partly plays an integral role in driving sales for the company.

World-wide customer base is also another point of strength for Old Navy. As at 2010, the company had over 3, 000 stores across the globe. Besides, it has also continued to open franchise stores in foreign countries like UAE, Turkey among others.

Old Navy’s e-commerce presence is yet another strength that has enabled it to stay on course and attract a global clientele.

Old Navy also offers a wide range of products and brand extensions, which target the whole family. Its products are differentiated to include clothing for women, men, children, maternity, girls among other groups.

The huge customer base of Old Navy is also another strong point, which ensures high profitability.

Weaknesses

Just like other retail companies with global coverage, Old Navy also has some aspects of weakness that need quick and effective solutions. One of the weaknesses facing Old Navy is the stiff competition in the clothing industry. As a result of the growing competition, the company finds it challenging to maintain customer loyalty.

The high dependence on third party vendors by the company is also another weakness. Old Navy relies on third party vendors positioned outside America for the distribution and sale of its products. Product vendors can sometimes be unreliable due to delays in shipment, increased costs among other issues.

The small businesses that the company runs and is still planning to open in various regions could prove to be a bit hectic to effectively manage. As a result of this, they could cost the company quite a lot if not properly regulated.

Opportunities

One of the greatest opportunities that Old Navy can exploit is the emerging new markets on the international grid. There are new and viable markets in Europe and Asia that the company can gain successful entry into.

E-commerce is swiftly gaining ground across the world and this presents an ideal opportunity that the company can pursue for expansion and profitability.

Old Navy is a brand that has successfully gained entry into some Asian markets, where it is considered by many an inspirational brand. Starting an effective customer loyalty program in those markets, the company can easily attract more customers.

Threats

The declining customer loyalty to Old Navy is a factor that the company should worry about. Besides, many people are switching to online shopping today and this means that more expensive brands will soon become competitive to cheaper ones, thereby encouraging customers to change to less costly brands.

Another threat to Old Navy is the influx of counterfeits products in the market, which could negatively impact sales.

Conclusion on SWOT Analysis of Old Navy

The above SWOT analysis of Old Navy reveals several strengths and opportunities compared to weaknesses and threats. Judging by the stiff competition and changing trends in the market, some of the key areas that the company should focus on for sustainability and profitability include intensifying its online presence, international expansion and encouraging brand loyalty.

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References

http://www.oldnavy.com/

http://www.mbaskool.com/brandguide/lifestyle-and-retail/14058-old-navy.html

http://www.swotanalysis24.com/swot-o/80034-swot-analysis-old-navy.html