Between 2000 and 2012, Gap, Inc. (Gap) ceded its world leadership position in specialty fashion retailing to Inditex of Spain and H&M of Sweden. These two companies, each less than a quarter of Gap’s size in 2000, were now setting the pace in the global mass fashion market, and Gap appeared to be falling ever further behind. In the intervening twelve years, three CEOs had struggled to turn around the fading brand. While several temporary profit boosts appeared to herald a recovery, a sustained rally remained elusive. Mickey Drexler, Gap’s CEO since 1983, who had been responsible for Gap’s rise to global prominence, was fired in 2002 after two years of double digit, same-store sales declines and a 75% drop in the stock price. 1 His successor, Paul Pressler, appeared to have engineered a remarkable recovery, but was fired in 2007 after disappointing sales and another slump in profits. His replacement, Glenn Murphy, fresh from a successful turnaround at a Canadian drug-store chain, promised tighter price controls, lower administrative costs, and a leaner, more aggressive Gap. He cut costs and drove up earnings per share, but sales continued to decline. After four years of troubles, Murphy brought in former J. Crew President, Tracy Gardner, to consult with the Gap brand and he began a bold program to close one fifth of Gap’s North American store base. In 2012, sales had lifted 8%, same-store sales were strongly positive for all of Gap’s domestic sub-brands, and the company’s share price had lifted nearly 50% from the prior year. After 12 years of poor performance, had Glenn Murphy finally discovered the answers to Gap’s problems?  Mickey Drexler: 2000-2002 After Gap, Inc. “misjudged fashion trends in 2000,” its sales growth rate slowed to 18%, below the historical average, and operating profits fell 20% to $1.4 billion.3 CEO Mickey Drexler, was confident that this stumble was a short term problem, but 2001 results suggested otherwise. Sales lifted only 1%, operating profits plunged anther 70% to $426 million and the company made a net loss. 2002 saw sales rise 4% and operating profits recover to $1.0 billion, but comparable stores sales continued to fall. Gap’s stock price decreased from a high of $53.75 in February 2000 to $14 in May 2002.4 Several top designers and senior executives left the company “disillusioned with how bureaucratic the organization had become.” Analysts noted that, while Gap had made “button-down shirts, chinos and basic cotton T-shirts the boomer uniform,” it was struggling to resonate as well with some members of Generation Y (those born in the late 1970s to early 1990s) who were “looking for individuality, not conformity.”6Chairman Don Fisher had had enough. The night before the Gap board meeting on May 22, 2002, Steve Jobs, a board member, called Mickey Drexler to warn him that the board was planning to fire him the next morning. Drexler entered the board meeting aggressively and a board member later described it as “a very emotional scene.”Despite his shock and disappointment, Drexler quickly recovered. In 2003, he became the CEO of J. Crew, a quality basic clothing chain which was incurring heavy losses. Within two years, he had returned it to profitability and, within five, he had more than doubled sales. Paul Pressler: 2002-2007 Paul S. Pressler replaced Drexler as the CEO of Gap, Inc. Pressler had spent 15 years with The Walt Disney Company and ended his tenure there as the chairman of Walt Disney Parks and Resorts. The press noted the difference in the two men’s leadership styles: whereas Drexler “flew by the seat of his khakis,” relying on his honed intuition to direct apparel development, Pressler was researchoriented and left decisions about apparel to Gap, Inc.’s designers. 8 Pressler stated, “I had to demonstrate to everyone that the general manager is here to lead the people—not pick the buttons.”9 Pressler moved quickly to close 200 underperforming stores, slow the rate of new openings, and reduce excess inventory, 10 resulting in a “spectacular turnaround” in 2003. 11 Between 2002 and 2003, operating profits rose 87% to $1.8 billion, marginally beating the all-time record set in 1999. Gap Brand Pressler hired Canadian Pina Ferlisi as executive vice president of product design in March 2003 to define the division’s style aesthetic. Before joining Gap, Inc., Ferlisi worked at Perry Ellis, Tommy Hilfiger, and Theory; she also helped launch the successful Marc by Marc Jacobs line. Her Gap design team was located in New York City and included Vice President of Women’s Design Louise Trotter, who formerly worked at Calvin Klein, and Vice President of Accessories Design Emma Hill, who previously held a similar post at Marc Jacobs. Both Trotter and Hill hailed from the U.K. Scores of consumer and employee insights indicated that female Gap customers felt that the brand’s offerings were too androgynous and boxy. Hence, Ferlisi made the women’s lines more feminine and focused on fabric and fit. Banana Republic For years, Banana Republic had a reputation of being “a purveyor of chic basics—casual office wear in black or beige”27—i.e., an upscale Gap. However, under the direction of President Marka Hansen, the division focused on making its product assortment more fashionable and trendy, minimizing the overlap between Gap and Banana, and catering to 25- to 30-year-old professionals . Hansen explained, “What’s the hook or differentiation? . . . It’s an affordable, covetable luxury . . . . We’re bringing fashion to a wider audience. Old Navy Under President Jenny Ming, Old Navy continued its focus on families, rolling out underwear, maternity, and infant lines to raise margins.32 The division expanded to Canada in Pressler’s first year as CEO and it targeted Hispanics with its first Spanish television spot at the end of 2003. The company’s localization strategy was tested in select Old Navy stores in 2004, and the company planned to extend the program to all Old Navy outlets in 2005. Forth & Towne Gap, Inc. established five test stores for Forth & Towne in Chicago and New York by fall 2005. Under Gary Muto’s leadership, the firm positioned Forth & Towne to appeal to women aged 35– 50. Gap Online Toby Lenk, a 1987 Harvard MBA, headed the company’s online division, Gap, Inc. Direct. In 2004, Gap, Inc. was the largest U.S. online apparel retailer with sales of over $500 million. It was “redesign[ing] and rebuild[ing] all of [its] websites from the ground up” to enhance visitors’ online shopping and to improve online and in-store integration.47 Lenk noted that 35% of the company’s Web site visitors were pre-shoppers preparing for store visits, and 13% of those who entered a Gap, Inc. store had visited the store’s online site beforehand. The firm’s new e-commerce platform would allow the sites to take back orders and preorders. Lenk explained, “This means we will never have to walk a sale on a basic item, and at the same time it will allow us to run our basic inventory much tighter.”48 The company planned to have most of the Web site enhancements completed by the 2005 holiday season. Marketing Along with reworking Gap’s main brands, Pressler also overhauled Gap’s public image and publically positioned its divisions as lifestyle brands. The CEO remarked, “We need to bring more theatrics, storytelling and consistency [to retail]. If you can’t tell me what a Gap dinner party, Banana Republic car or Old Navy vacation looks like, then we haven’t built our stories.”49 Pressler had also been focused on differentiating the brands and “upgrading the marketing functions at all of Gap’s brands, including the hires of new head marketers at all three units.”50 Recent Gap-brand TV advertising featured actors and singers. The company paid 40-year-old actress Sarah Jessica Parker, former Sex and the City star, $38 million to appear in television and print ads for three seasons during 2004–2005. It replaced Parker with 17-year-old British soul singer Joss Stone as its Gap spokes-model in the summer of 2005.51 In an effort to tout its “vastly expanded variety of fits” in jeans, the company planned to use more nontraditional types of advertising—i.e., “guerrilla marketing and grassroots tactics,” according to Jeff Jones, executive vice president of marketing at Gap. After lackluster results in 2005 and six consecutive quarters of declining same-store sales, Pressler pointed to 2006 as a key year to prove Gap’s recovery and justify his rebranding efforts.60 Pressler noted, “We are acting with a tremendous sense of urgency to win back customers.”61 Pressler also increased the annual cash dividend 78% for 2006 and the board authorized a further $500 million for a share repurchase program, $250 of which would be repurchased in Q1 and Q2 of 2006. Fisher: Interim CEO, 2007 Although Fisher was interim CEO for less than a year, he made a number of moves that undid much of Pressler’s previous work. Less than a week after firing Pressler, he cut many of Pressler’s hires from Disney. Cynthia Harriss, the president of Gap U.S., was replaced by Marka Hansen, the previous president of Banana Republic and an employee since 1987. Fisher also closed all Forth & Towne stores by the end of June, taking a pretax charge of $40 million.67 Although Forth & Towne has been open since 2005, financials were never disclosed for the brand. Fisher also began to reduce Gap’s workforce to bring down expenses, cutting a “relatively small percentage” of the 150,000 workers. Glenn Murphy: 2007-2012 On July 26, 2007, Gap appointed Glen Murphy, as the new CEO. Since 2001, he had been the CEO of Shoppers Drug Mart, a Canadian drugstore chain. Murphy’s first major move as CEO was to cut expenses and control inventory discounting. Quarter three profit for 2007 lifted 26% due to lower marketing spending and better product margins. In 2008, Spain’s Inditex overtook Gap, Inc. as the world’s largest specialty apparel retailer, reaching $3.3 billion in sales for the first quarter of 2008 compared to Gap’s $3.25 billion.86 With over 200 designers and rapid supply chains that could produce and stock hot items within weeks. Problems returned in 2011. Sales remained steady at $14.5 billion, but operating profits fell 27% to $1.4 billion. Murphy hired former J. Crew President, Tracy Gardner, to consult with the Gap brand. Gap announced plans to shut more than one fifth of its North American stores over the next two years and aimed to shrink the U.S. store base to 700 by the end of 2013.91 Murphy noted that China was Gap’s biggest market for further growth. However, by the end of 2012, Murphy’s strategy appeared to be working. Sales lifted 8% to $15.6 billion, a six-year high, and operating profit recovered to $1.9 billion. Store closings lifted sales per store in the North American Gap to $3.7 million (from a low of $3.3 million in 2009) and comparable store sales were strongly positive for all of Gap’s North American divisions. Gap had also made significant steps toward streamlining its production and engaging more closely with trending fashions. By 2012, Gap had cut its lead time from more than nine months in the early 2000s to less than four months for key items.96 Across all lines, production time had been cut by nearly one third. 97 In January Gap acquired Intermix Inc. for $130 million, which promised expansion into the luxury market as well as greater access to of-the-moment fashion pieces. Although Intermix didn’t manufacture its own clothing, it has established relationships with a variety of high street designers. What else could Murphy do to restore Gap’s leading position in fashion retailing? Would Murphy’s international and online focus be enough to sustain this turnaround?

-----------------------------------------------------------------------------------------------------------------------------------

What is the case about?

What are the important events that occurred in the case?

What can we learn from reading the case?

What advice do you have for the leaders in the case and/or company in the case?

Consider the following statements regarding how government spending responds to changes in aggregate income, wealth, and interest rates.

A. Government spending responds directly to changes in aggregate income, wealth, and interest rates. Changes in aggregate income, wealth, and interest rates automatically cause government spending to change.

B. Government spending does not respond directly or indirectly to changes in aggregate income, wealth, or interest rates. Changes in aggregate income, wealth, and interest rates do not have any effect on government spending.

C. Government spending responds indirectly to changes in aggregate income, wealth, or interest rates. During a recession, aggregate income and wealth will fall and the government may decide to increase government spending to stimulate output and jobs in the economy.

Which of the statements are true?

Statements A and B

Statement C

Statement A

Statement B

The data in the accompanying table represent the rate of return of a certain company stock for 11 months, compared with the rate of return of a certain index of 500 stocks. Both are in percent. Test if there is a positive relationship at the α=0.01 level of significance.

• What is the Standard Error of the regression?

• What is the left boundary of the estimation of the regression equation slope?

• What is the critical value of the test?   

• What is the test statistics of the test?

• What is the p-value of the test?

Conduct a test and find if there is a difference at the α=0.01 level of significance. In​randomized, double-blind clinical trials of a new vaccine, children were randomly divided into two groups. Subjects in group 1 received the new vaccine while subjects in group 2 received a control vaccine. After the first dose, 67 of 607 subjects in the experimental group (group 1) experienced fever as a side effect. After the first dose, 109 of 728 subjects in the control group​ (group 2) experienced fever as a side effect.

A. Construct the null hypothesis and the alternative hypothesis.

B. What is the P-value of the test result?

C. What is the test statistics?

D. What is the positive value of the critical value?

E. Do we have enough evidence to reject the null hypothesis?

F. What is the test conclusion?

G. What is the upper boundary of the 99% Confidence Interval of p1-p2?

In quantum chromodynamics, long flux tubes will always snap because a quark-antiquark pair gets created from the vacuum, and hadronization results with a quark attached to each new end.

In string theory, if we try to stretch a single string out a long distance, will it also snap? If open strings with Neumann boundary conditions are allowed, this can always happen. Suppose this is not the case. If D0-branes exist, we can create a pair of them from the vacuum, and the string will still snap. Even if no D0-branes don't exist, or space filling branes either, as long as we have some Dp-brane for some p in between, the Dp-brane can be wrapped up as finite closed bubble, and we can create a pair of such bubbles. The string will still snap into "tadpoles".

In some string theories, strings carry charges and are BPS states. Can they snap? I doubt it.

1. Consider a simplified one-dimensional laminar flame, such as that discussed in the classroom. The earliest description of a laminar flame is that of Mallard and Le Chatelier in 1883. Assume that:

a. 1-D, constant area, steady flow,

b. kinetic and potential energies, viscous shear work, and thermal

radiation are neglected,

c. pressure is constant,

d. diffusion of heat and mass are governed by Fourier’s and Fick’s laws

and binary diffusion is applied,

e. Lewis number is unity,

f. individual specific heats are all equal and constant,

g. fuel and oxidizer form products in a single-step exothermic reaction,

h. fuel is completely consumed at the flame with oxidizer in

stoichiometric or excess proportion.

By applying suitable boundary conditions, please derive the expressions for laminar flame velocity and flame thickness. (Simplified solution can be found in most of the combustion textbook, such as the one by S.R. Turns(1996) or the one by I. Glassman (1993 or newer edition).)

Fundamental of power electronics:

In a certain application, an unregulated dc input voltage can vary between 18 and 36 V. It is desired to produce a regulated output of 28 V to supply a 2 A load. control circuit automatically adjust D to maintain the constant output voltage and current. All ideal components.  Hence, a converter is needed that is capable of both increasing and decreasing the voltage. Since the input and output voltages are both positive, converters that invert the voltage polarity (such as the basic buck-boost converter) are not suited for this application.

(1) Sketch the waveforms of the transistor voltage Vds and transistor current IT or (Id for drain current) and give expressions for their peak values. find the numerical maximum value on the sketch for Vds and IT (Id). ignore the effect ripple.

(2) Derive the expression for switching frequency at the converter operates between the CCM and DCM at the boundary. the answer is in term of D, Vin, L1, L2, iL1, iL2. you may assume L1=L2.

Match the organelle to its function.
Smooth Endoplasmic Reticulum
Rough Endoplasmic Reticulum
Golgi Apparatus
Plasma Membrane
Chloroplast
Mitochondrion
Lysosome
Centriole
Nucleolus
Nucleus
Cytoskeleton

A. Refining, tagging, sorting, and packaging proteins. Sends completed proteins to their final locations.

B. Studded with ribosomes. Sends polypeptides to Golgi.

C. Lipid synthesis and detoxification functions.

D. Contains all genetic information for the cell (Chromatin)

E. Microtubule (protein) scaffolding throughout the cell. Structural support, movement, transportation.

F. Contains genes for making ribosome parts.

G. Contains enzymes to break down large food molecules and damaged organelles.

H. Involved in the formation of mitotic spindle for cell division. Helps guide the separation of chromosomes. I.
Stores/Converts solar energy to chemical energy in sugars.

J. Selectively permeable boundary for all cells.

K. Transfers chemical energy from organic molecules to ATP.

A consulting firm hired you to improve the network security of a Hospital by adding extra services for defence against external attacks.

1. In order to protect classified encrypted data from disclosure and transmission outside of the Hospital network, you need to choose among the following: proper configuration of DMZ, use of strong encryption algorithms, safeguards over keys. State your selection and justify your choice.

2. You want to use a packet firewall to protect the Hospital network but you are hesitant to choose the right location among the following: putting it on the web server at DMZ, putting it along with the IDS server, putting it on the screened subnet with DMZ, or putting it on the domain boundary. Recommend the right answer with justification as to why or why not.

3. Which one of the following can be used to protect a network against unauthorised external connections: VLAN, strong authentication, or an access control list of trusted devices? Justify your answer