Megan Akatu Jen Dougan Alyssa Ellis Tatsiana Stsepaniuk Kendra Tucker Fykes

Gap Inc.  Core Competencies  Brand Awareness  Infrastructure & International Experience  History of Corporate Social Responsibility  Company Footprint  Retail Operations  Manufacturing  Social Factors  Political Stability  Economic 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 RisksAdvantages