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In February, Cap Inc. announced that it would split into two independent publicly traded companies: one...

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Finance

In February, Cap Inc. announced that it would split into twoindependent publicly traded companies: one comprised of its OldNavy brand, and the second a yet-to-be-named company that includesits other brands like Banana Republic and Athleta. The plannedbreakup is an acknowledgment of the two chains' diverging fortunesand how much Gap has lost its once-powerful grip on Americanconsumers. For several years, Old Navy has outperformed its sisterbrands Gap and Banana Republic with its lower price-points andcatchy marketing. Old Navy now exceeds the original brand in sales,making up nearly half of Gap Inc.'s $16.6 billion of sales in2018.

In your opinion, what are the benefits and downsides tosplitting Gap into two firms? How did Gap's stock react to the newsin after-market trading? How would you explain this reaction? Willthe separation save the company in the long run? Please elaborateon your answers.

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Focused management When organizations become large and diversified it becomes extremely complicated to manage them as a single unit Also some business which are relatively new and are in growth phase in a company would need more focus while mature business need to be just managed to ensure continuity of business and profits Hence approach to management will be    See Answer
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