Strategic Issues and Options for River Island Clothing Limited

This paper discusses the strategic issues faced by River Island Clothing Limited and provides three possible options to resolve them. The options include product development, diversification, and market development. The suitability, acceptability, and feasibility of each option are also evaluated.

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Business Strategy 1
“River Island Company Business Analysis”
The purpose of this paper is to enlighten the reader about the company River Island Clothing
Limited and its issues present in the environment. The essay highlights details about the current
position of the company along with three critical problems faced by River Island in the
environment. Further, the paper also evaluate details about the three possible options with the
help of which River Island can easily resolve their issues in the target market. For the purpose of
evaluation of the provided options, SAF framework has been used in the paper. Suitable,
Acceptable and Feasible strategy model clearly analyse the applicability of all the three options
in the business.
River Island is a London based high street fashion brand company that operates its various stores
in the worldwide market. The company was organized in the year 1948 by Bernard Lewis and
his broth in London itself. River Island is a privately owned family company that is owned by
the Lewis family. Further, the company serves a wide variety of women, men and children
clothing, footwear and accessories in the market. River Island is the holding company of Lewis
Trust Group. The company has its total 350 stores in UK, Asia, Ireland, Europe and Middle East
along with six online websites that works in four currencies. The company ships its products to
100 countries worldwide. Further, it should also be noted that the company is known for
providing stylish, affordable and fashionable products to the customers in the target market.
Along with the physical chain stores, the company also efficient make use of online channels to
supply its products in the target market (River Island 2019).
Three strategic issues of the company River Island are discussed below:
Customer Relationship: maintaining solid customer relationship acts as one of the key aspects in
initiating growth of company River Island in the target market. River Island operates its business
functions in worlds most toughest marketplace where they sell stylish branded products as well
as simple affordable products to the customers through supermarket store such as Tesco, and
retail chain stores as well (Geoghegan 2017). Not only these supermarket chain stores hold the
potential to delist the name of the company and shirk it shelf space but also there are various
competitors present in the market that constantly try to reduce the competitive advantage of
River Island in the target market. The company River Island face strategic issue of maintaining a

Business Strategy 2
fixed relationship with its people in the target market. It is important for the organization to
maintain a fixed relationship with the suppliers, customers, supermarkets etc. to grow in the
market. However, the supermarkets constantly try to lower down the price of products of the
company otherwise; they will lower down the sales whereas the competitors try to capture the
customers of the company. Resulting in which, River Island face this constant fear of losing their
customers present in the target market. It has been reported as an issue of customer relationship
management since the company has started trading its products online. Late deliveries and heavy
charges of product have made the organization suffer in terms of sales (Santamaria 2018).
Supply Chain and Investment Risk: As, the fact is known to all that the company has a diversified
market base and established supply chain network as well. River Island work in the global target
market and has spread its business in the global market as well that brings the need of efficient
supply chain facilities for the organization. The company works with a motto to put business on
providing original designs, efficient manufacturing and timely distribution of products to the
customers in market. This result to increase in the need of effective supply chain so that the
business can adequately deliver the products to the customers in the target market through
physical as well as online sales (Woods 2018). The supply chain of River Island is exposed to
potentially adverse events such as physical disruptions, industrial and environmental accidents
that easily impacts on the ability of the company deliver its products to the customers on time.
The customers judge the product through its on time delivery as well.
Thus, it can be said that supply chain activities of a business affects their brand reputation in the
market. Labor issue among River Island like also reduces the satisfaction level of the employees
in the business that subsequently affects the supply chain of the business as well. Further, it
should also be noted that the company has taken various wrong investment decisions that has
affected the supply chain process of the company. The retail market has been tough in past few
years that have affected many organizations. River Island invested its money in strategic
expansion in clothing line due to which the company faced a 7% decrease in the profits in the
year 2018 (Hammett 2018).
Sustainability: It is the biggest strategic issue faced by the company River Island in the global
market. Sustainability is an important aspect for the customers and the company as well but the
diversified functions of the company to earn more revenue sometimes make it difficult for them

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to be sustainable. The vision of River Island is to double the size of the business by satisfying the
customers and reducing the environmental impact and grow sustainably. The company produces
clothes, footwear and accessories that take major part in increasing greenhouse gases in the
community. The carbon emission from the manufacturing process of the company is increasing
day by day that is slashing the human health. Further, it should also be noted that fashion
industry keeps on changing day by day (Rashid, and Barnes 2017). Companies like River Island
play a huge role in changing the face of fashion industry so the company faces difficulty in
managing the growth while adopting sustainable fashion changes present in the environment.
Already the company was facing technical issues in initiating online sales and then adopting
dramatic fashion changes affects the sales of the company repeatedly.
Three strategic options of the company River Island are discussed below:
Product Development: refers to the Ansoff matrix strategy under which the business aims to
expand the business by introducing a new product line in the market. River Island already serves
clothing, footwear and accessories in the market, introducing a new cosmetic line in the market
will help the organization to successfully grow. As the company targets people between age
group 18 to 30 who mostly use make while going to parties or attending meetings (Robinson,

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and Hsieh 2016). So, the company should produce beauty products to target these people so that
they can feel comfortable and confident while wearing clothes and make-up of River Island
clothing company. This will help in attracting and retaining customers by offering new products
in the market (Goworek, Perry, and Kent 2016).
Diversification: it refers to the Ansoff matrix strategy under which an organization aims to
diversify the scope of business with new product in a new target market as well. Considering the
relation of diversification strategy with the River Island clothing limited company, it should be
noted that the company should diversify its scope of business in Singapore market with a new
product line of cosmetics in the market. The beauty care industry is highly profitable and
expanded in the target market so diversifying the scope of business will help the organization to
enter in a new industry from which they can earn profits in the market (Gardetti, and Torres
2017). Singapore market is favourable for the company to enter, as it is a tourist location due to
which the economy of the country is favourable to enter. The diversified target market of
Singapore will help the organization to promote the brand in the eyes of prospective people
present in the market. This process will subsequently increase the sales of clothing brand of the
company as well. This strategy will help the company to target new customers and maintain
fixed relationship with them by eliminating supply chain issue and barriers as well. This will also
help the company to invest their income in the right direction (Todeschini, et. al., 2017).
Market Development: it refers to the Ansoff matrix strategy under which the business aims to
develop the business by expanding its business structure in different parts of the world. It is
believed that market expansion strategies always provide various benefits and profitability to the
companies. So, the company River Island should aim to make use of Greenfield Investment
strategy to expand it is scope of business in Singapore market (Henninger, et. al., 2017). Apparel
industry is the biggest revenue making industry present in Singapore with an expected annual
growth rate of 12.5% in the year 2019. Further, it should be noted that Greenfield investment
strategy will help the organization to completely start their fashion retail business from scratch
and develop a physical store instead of online store. In this way, the company will easily
eliminate bridges like Zalora coming between the customers and the company. Further, opening
a physical store will increase the faith of the customers in the brand and will make the company
more sustainable in the worldwide market (Statista 2019).

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Further, it should be noted that the above mentioned three strategies will successfully help the
organization to promote its sales in the market. The product development strategy is suitable for
the company to maintain efficient customer relationship in the market. This strategy will help the
company to attract customers towards new product and then maintain a solid relationship with
them. Further, this strategy is acceptable because it takes calculate risk by introducing the
product in the market in which they are already present. Also, this strategy is feasible because
people purchasing clothing, footwear and accessory will definitely purchase cosmetics from the
company (Goworek, et. al., 2018).
Talking about the diversification option for investment and supply chain issue, it should be noted
that this option is less suitable to the company according to SAF framework, but as the
organization already had a physical store in Singapore so they will not face enough difficulty in
introducing a new product line in the market. Lastly, market development strategy for the
sustainability feature will help the company introduce new markets and actively initiate CSR
activities in the market. This strategy will help the company show its actions on the worldwide
level and satisfy customers to greater extent (Oxborrow, et al., 2017). Thus, due to which it can
be said that this strategy is suitable, feasible as well as acceptable for the company.
Thus, in the limelight of above mentioned events, the fact should be noted that the paper
evaluated information about the strategic issues and options for the company River Island
Clothing Limited. The company is facing three major issues that can be solved using product
development, diversification and market development strategies. Suitability, acceptability and
feasibility of the options are also overlooked in the paper.

Business Strategy 6
References
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production and consumption. Routledge.
Geoghegan., J. (2017) Profits slip at River Island in ‘challenging market’ [online]. Available
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sustainability in the fashion business: Challenges in product development for clothing longevity
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