Internal Analysis: Polo Ralph Lauren and Gap's internal analysis provides a unique perspective of each company's competitive advantage. Both Polo Ralph Lauren and Gap share similarities and have value chain strategies that allow them to compete competitively in their industry. Additionally, the resources that Ralph Lauren and Gap are able to draw from give them the ability to sustain their competitive advantage for years to come. To evaluate each company's competitive advantage, it is important to identify each company's resources and capabilities. . Polo Ralph Lauren has assets that include a strong financial position, a complex infrastructure, and a strong brand. Polo Ralph Lauren's financial resources have always been considered very strong in its industry. Its free cash flow margin, or the money the company can return to shareholders, is performing very well compared to the industry average. Being financially flexible and strong in its industry gives Polo Ralph Lauren a valuable and rare asset. It also provided the social complexity of a brand based on culture and reputation. In turn, this asset extends Polo Ralph Lauren's ability to expand internationally. This is directly reinforced by the changes Polo Ralph Lauren has made to its value chain. One of the reasons Polo Ralph Lauren has been able to reduce costs internationally is that the company does not own or operate any of its own manufacturing facilities. Instead, they rely on and outsource to over 400 different manufacturers around the world to produce their products. By outsourcing their production line, Polo Ralph Lauren has effective control over their costs and is able to diversify their products across… the middle of the paper… but also for Gap as it reduces operating costs. This asset also enables features such as “ship from store and find in store, designed to leverage Gap, Inc. channels and resources to drive in-store traffic and conversion.” While Polo Ralph Lauren has similar technological advancement, it doesn't show it to the extent Gap has highlighted. Gap also has global brand recognition similar to Polo. Gap is able to market itself through franchising and become synonymous with American pop culture. It has franchising agreements with over 20 countries including Australia, Egypt, Greece, Russia and Thailand. These agreements allow unaffiliated companies to operate Gap, Old Navy or Banana Republic stores around the world. Gap is still in the process of expanding these franchise agreements and will continue to grow its brand globally.