Megan AkatuJen DouganAlyssa Ellis

Tatsiana StsepaniukKendra Tucker Fykes

Gap Inc.

Core Competencies Brand Awareness Infrastructure &

International Experience History of Corporate Social

Responsibility

Company Footprint Retail Operations Manufacturing

Social FactorsPolitical StabilityEconomic Strength

Currency Status Investment Friendly Anti-Inflationary Goals Low Debt to GDP, High

Reserves

Setting the Stage

Brazil

Investing Directly

Retail Operations Rio and Sao Paolo are centers for fashion and economic activity Leverage existing relationship with Alpargatas Introduce Altheta in Brazilian stores

Manufacturing Local manufacturing expertise Lease factory space and identify current distribution channels through local

relationships

Foreign Direct Investment More profitability and control than under franchising agreements Builds goodwill and provides access to a growing market of consumers Requires a large capital investment and additional currency risk

Weighing the Costs and Benefits

Currency risk High transaction/set-up costs Inexperience in South America

(unknown distribution channels) Unexpected shifts in consumer

demand Rising inflationary pressures

Stable democracy Strong demand for high-end,

athletic apparel Existing country competitive

advantage in textile manufacturing

Future international events (World Cup 2014, Olympics 2016)

Existing partnerships with local suppliers

Risks Advantages