Gap is an american company mainly known for clothing and accessories, it was founded in 1969 by Donald Fisher and Doris Fisher and headquartered in San francisco, California. Gap operates in 90 countries worldwide and has about 450 franchise stores and sites, gap has over 15,000 employees and about 3000 stores in the US, UK , France, Canada, and Japan, where most of their stores are operated in.Gap had a revenue of $16.3billion back in 2004 and opened about 170 stores across the US and Canada and other international countries.
Gap Inc. is one of the world’s leading global specialty apparel retailers, offering clothing, accessories, and personal care products for men, women, children, and babies under its five brands Gap, Banana Republic, Old Navy, Piperlime and Athleta. They operate in developing markets such as the UK where their is support available to help them trade establish more businesses in the UK and internationally.Foreign markets turned out to be genuinely significant a year ago maintaining income and profit of GAP, they had help they companies work together to reach their earning target. It also increases the company to new markets where entrepreneurs can invest and create more jobs for people.
Royal Dutch Shell plc is one of the most diversified international oil company regularly known as Shell, is a British-Dutch oil and gas organization headquartered in the Netherlands and joined in the United Kingdom. Shell is one of the six oil and gas supermajors in 2016 revenues showed that the were the 6th largest company in the world and in Europe. Shell is a global group of energy and petroleum companies with over 86,000 employees in more than 70 countries produces around 3.7 million barrels of oil equivalent per day and has 44,000 service stations worldwide.
Shell uses advanced technologies and finds ways to help sustainable energy future in less developed countries like india. Shell tries to be a ground breaking vitality organization and plans to take care of worldwide vitality demand in a moderate and mindful way. Shell is a standout amongst the most differentiated universal oil organization in India’s vitality division. Shell is contributing to india’s economic development and also be creating jobs there will also be potential for higher sale new ideas.
e3A brand is a product with unique character for example a design or image it is consistent and well recognised. Having a strong brand is very important because you inspire customers loyalty.
Gap, and Walmart are three of the biggest merchant low priced clothes . In the same way as other business in the world in the clothing industry, they have big factories in countries such as Asia, Indonesian, Saipan with low wages and little administrative oversight so they have to settle with working over time and getting paid very little.these workers also get abuse even if they make simple mistakes supervisors would slap them and not pay them for their work. Gap and its other brands has been one of the most recognizable clothing brands in the apparel market.
Access to new markets
Gap get access to new markets buy expanding internationally with their different branches of stores Old Navy, Banana Republic, Athleta and Intermix. So far they have opened six old navy stores in the middle east and franchised with many other countries in the middle east countries since 2015, they also their first franchise store in the Philippines so the with them expanding their stores in foreign countries gives them a good advantage to expand and invest in other markets. International growth is a key priority for Gap Inc. and expanding Old Navy to new markets and countries in partnership with two franchise partners is an important step in the company’s strategy. Gap has also diversified and expanded into different specialty markets such as Banana Republic, Old Navy, Baby Gap and others.
Shell’s goal is to help communities get access to some source of energy, their aim is to support energy to these communities so that they can support development and create more jobs for the people. In countries like Nigeria they do not have access to energy it is alway a huge challenge for people to get access to energy. The country has over 180 million people, and almost half of their electricity is off and they sometimes receive less than four hours of grid power a day. This is why shell support access to energy through All On in Nigeria.
Over the years Gap has made great progress in involving their brand and also the way they operate and ensuring that customers are getting great products. after gap had entered the Indian market, they started to sell their products online on different fashion sites. India is growing at a fast pace and some of the cities in the country are contributing significantly towards this development. Most International brands don’t have stores in theses communities and their online channel is the main route for buyers to secure these brands with available growing income populations in India the demand for foreign fashion products is increasing.
Shell companies all located mostly all over the world with that being said they contribute more the each community and they also make more profit in some of the countries they are located. In africa nigeria is one of the top gas producers in the continent they have a population of over 1 million people so shell has partnered up with them to help invest in the economic growth of the country. They produce and generate gas for the country, shell companies in nigeria has made a huge profit in 2017 with begin the country’s oil and resource it contribute great development to the economy and shell.
Economies of scale
Gap takes its production overseas in very big factories overseas in foreign countries this way they are able to make large quantities of goods fast so it is very efficient, and mast of these factories are owned by Gap and it makes the tractions cost very low.
Shell economies of scale
Preferential tax rate
TITLE – DIFFERENT FINANCES AVAILABLE TO ……. AND ……. CONDUCTING INTERNATIONAL BUSINESS
Prepayments to the importer
Is the process when the buyer makes a payment before the supplier or the seller sends out the product this payment should be made in the correct currency agreed and through the right method.
GAP and Shell develops products and services that make payments easier to make receive and bringing out speed security and simplicity to transactions. They use this method because it is a fast and efficient and it is a more secure way of receiving money they also can avoid credit risk because these payments are received through electronic transfer. But this method is best use for small export transactions. They uses this payment method mostly in china because it is less complex than the other payment methods and the supplier gets paid in the correct currency.
Letters of credit
This is one of the most secure sources for international traders such as GAP and Shell to use,it is set up by a bank to get payments from the buyer to the supplier.
Lager international businesses like gap and shell insist on using letters of credit especially in countries such as China and western Europe where they has businesses, when the reliable documents about the buyer is difficult to get. Although the fee are high and the paperwork is very complicated but it is used if the buyers are making large transactions.
This is a type of insurance that businesses use to export goods overseas to buyers or markets its a loan that is extended to an importer by a bank. Countries in like india and africa where the demand for oil and energy is high and there are a big population and very small businesses they it helps them as a great way of approaching banks for credit, and also gives them that insurance for future payments.
This is money loaned from the bank for the payments of long and short term finances. The bank sets up a fix time frame until us make your payments you also pay interest rate. This method is a good way for shell and Gap because it gives you the option of taking big amounts of money to make payments good for investments and it is a more flexible way of making payments.
P4: Explore the role of trading blocs on international trade.
Trading blocs have played a big part in the development of international trade. Economic integration economics integration have a result in trading blocs, there are different forms of economics integration in many regions, trading blocs binds together different economies and bring the nation closer.
Trading blocs helps in the complete removal of tariff and non-tariff barriers and encourages free exchange for resources across the border for the members of the countries. It helps countries in the best way with available resources because no country in the world is self sufficient and they need to depend one another for the accomplishment they require.
International business accepts to supervise and liberalize world trade the world trade organization is the replacement to general agreement on tariffs and trade.
Their objectives are they set rules for international trade they also provide a forum for negotiating and monitoring future trade liberalization.
P5.Explain the external factors that influence a selected business considering trading internationally.
The clothing industry has been influenced by globalization which is the present industry trend. At whatever the business trade its goods ,other political policies and regulations are available. There are countries that control how foreign businesses enter into their markets this can affect the operations of GAP works in some countries.
Clothing export in different countries can have a negative and positive impact on the business because it influences the buying power of customers the faster the economic growth is the higher the buying power consumers have, but the slower it is the lower they buying power is. Another thing that can affect Gap is low-cost sources it also affect the economy in a good and bad way.
Gap has many employees and because of this a big amount of people are also retiring the company has a hard time finding employees and they also need people replacing them. The living condition of these people are very poor.This suggests the profitability of the Gap
is different and this can influence its general benefit and activities of the company.
Gap has had a quick change in technology that they use in the fashion industry over the years,this change had led the improvement of fashion designs and clothing which offer more comfort to buyers. Theses clothings are made from different technologies, they are new programs that are begin used in the fashion industry these programs make work easier for the company and employees.
The increased globalization trends have made social orders more worried about environmental corruption. Most societies need organizations to act dependably while offering items and administrations. GAP Inc must know the worldwide environmental issues that people know about and worried about. This will empower it to work easily in spots where it opens new stores.
Being a multinational organization, GAP Inc must hold fast to the regulations and rules that government in other places where they have companies.Some of the legal issues that may affect the organization include the right of corporate employees, wellbeing and strength of shoppers and the communities.