Impact of Information Technology on Competitive Advantage in the Fashion Industry

This report discusses the impact of information technology on gaining competitive advantage in the fashion industry, with a focus on River Island. It analyzes the competitive environment, value chain analysis, and the role of technology and human resource management.

Information Technology

Table of Contents
Information Technology..............................................................................................................1
INTRODUCTION.......................................................................................................................3
Analysis of Competitive Environment.........................................................................................4
Value Chain Analysis..................................................................................................................7
CONCLUSION............................................................................................................................9
REFERENCES..........................................................................................................................11

INTRODUCTION
Information Technology which refers to creating, storing and sharing of information in
electronic format. This has become very important part of all business organisation because
this has made very easy generating and sharing information. This report includes River Island
for the discussion over impact of Information Technology to gain competitive advantage.
River Island is a private company which is operating in Fashion, retail, textile and clothing
industry. River Island was founded in 1948 by Bernard Lewis and Brothers. River Island is
headquartered at London, England, UK. Products of this company are Women's, Men's and
Children's Clothing, Footwear, and Accessories. Presently River Island is being owned by
families of Bernard and David Lewis. Parent company of River Island is Lewis Trust Group.
This is divided in three parts which are women's, men's and kidswear (Liu and et.al., 2019).
This brand was started in 1948 and by 1965 this had an empire of 70 stores in UK and this was
renamed as Chelsea Girl. This Chelsea Girl became first UK fashion Boutique chain. This
brand also have its stores in countries other than UK. Later Mens wear and kids wear were
added in River Island and Chelsea Girl was reintroduced in River Island Stores. In relation
with products which are provided by River Island to its customers This includes all types of
clothing for women, men and kids. This collection of clothes includes formal, casual and
party-wear clothings, clothing for special days, clothings which can fit specific size and
trending clothing and offers of the River Island which includes shopping and clothing at a rate
lower than usual. For man all types of clothing and in kids section their collection is further
divided in girl and boys collection of kids differ on the basis of their age. These products of
River Island are available at its website and its stores. Other than clothing River Island also
offers Shoes and accessories to its customers this is a wide collection and is divided in all the
categories. Various type of shoes are also provided by River Island are sports, casuals and
formal shoes and boots. Other than these regular products website of River Island also
showcase various collection of the brand and their new arrivals. This inform customers what is
latest and specific collection in which customers can be interested. In one manner this is
possible through information technology that River Island can sell its products from its
website and customers can order whatever they like and they are being offered. This report
includes impact and use of information technology on business and how River Island can take
competitive advantage from its information technology and technological advancement.

Analysis of Competitive Environment
There are various factors that drive a business and its performance. Among all these
factors competitive environment of business is one significant factor. Competitive
environment includes all the competitors of a business organisation and how they affect
business' profitability (Kibria, Al Amin and Rifat, 2017). To ensure impact that competitors
make on business it can be said that competitors are the one who can take the customers of a
business organisation and share its profitability when there are more number of competitors
than participants of the profit increases. This is why it becomes necessary for all business
organisations' to analyse their competitive environment and what impact it can make on the
performance of business.
Porter have developed a model which is known as Porters' five forces model this includes five
competitive forces and business can understand what impact each factor make on the
performance of the business.
These five factors and five competitive forces are-
 Industry Rivalry
 Threat of new Entry
 Threat of Substitute Product
 Bargaining power of Suppliers and
 Bargaining power of customers
Threat of New Entry
This refers to those who can make entry in the industry and can increase the number of
existing competitors. More number of existing and new competitors increase the chances of
the firm that it will have to share its market and profitability (Lewis, 2017). Chances of new
entry in the industry increase when there are less barriers of entry. Barriers of entry refers to
those factors which resist entry of new firm in the industry. These are capital required, cost of
switching, legal policies and restrictions, product differentiation. All these are factors which
create barriers to entry that if the firm which intends to enter in clothing and fashion industry.
But these are less required when firm operates and start at small level and these are also a
competitive force for River Island. But these are not big threat and those which are significant

threat needs to have high capital investment and other resources so that they can compete with
big and established organizations. These are one factor companies which start at big level also
Requires to follow many rules and regulations and legal restrictions and this depends how
difficult they to create barriers (Huang, 2019).
Threat of Substitute Products
Competition is not only from the firms which provide same and similar products. It is
equally important to analyse firms which provide substitute product. In relation with River
Island this is a clothing company and clothes do not have any substitute but River Island this is
a high end fashion brand and everyone cannot afford it than they look for options which can
provide fashionable and branded but less costly clothes. This is a factor that can effect River
Island and this is a force from industry itself (Ergashxodjaeva and et.al., 2018). River Island
needs to communicate its values so that customers can understand the difference between
River Island and products they are buying. Here River Island can take advantage of its target
customer as this target market and customers who can buy products of River Island. In this
River Island can make effective use of Information Technology it will help the company to
identify who are its target audience and people who are interested in buying clothes of River
Island. This analysis also suggests that position of River Island in this is moderate.
Bargaining Power of Suppliers
Suppliers power remains high. This is when they are less in number and provide
something which is not easily available and firms cannot acquire it from somewhere else.
River Island and resources the company affect bargaining power of suppliers otherwise the
resources required in clothing industry are easily available and River Island can easily acquire
these resources from other suppliers who are providing material send resources at
comparatively lesser price and cost of switching is also not significant that it affect the
decision. In this competitive force competitive condition of River Island is strong reason
behind this is that there are various suppliers who can provide and supply required material to
River Island but for suppliers such customers are less. This makes strong position of River

Island in the competitive force. River Island can take advantage of this and can impact its cost
positively.
Bargaining Power of Customers
This is power of customers and in present world power of customers is most important
power. This includes how many customers can bargain and what power do they possess.
Bargaining power of customers is high and strong when firm have limited customers and only
those customers can make firm survive in the market. Other situation in which power of
customers is high when there are high number of organisations in the industry (Voronina and
Gritskevich, 2016). In context of River Island there after various firms in its industry from
which customers can fulfil their needs send desires. This suggest that power of customers is
strong. Customers to buy high end fashion clothing and those who ate offering this ate more in
number and River Island has to share its profit and sales with those firms as well and here the
position of River Island is weak. Customers dominate the decision of firm and firm have to
make its policies according to customers. In this River Island can take advantage of
Information Technology send through its strong promotional arms marketing strategies can
attract customers towards itself. This is how IT can give benefit to River Island in its weak
position in this competitive force.
Competitive Rivalry among Existing Firms
This is strong when existing firms are more in number and weak in case there are
limited number of firms in the industry. In context of River Island being a company in fashion
and clothing industry which already employs many firms this is the reason that competitive
rivalry in this industry is very strong. This industry have firms which are pursuing on small
scale, bid scale operating on national level syncs many firms operating at multinational level
(Amelia and et.al., 2019). There is no firm which can be excluded from this competitive force
all the firms are competitors for River Island. While designing arms developing is strategy
Rivet Island have to consider all these factors. In this River Island can take advantage of its
effective strategies and operational effectiveness. Other factor which make it strong in this

customers loyalty and their trust on River Island which and other firm do not have.
Information technology can play a significant role in operational effectiveness.
Value Chain Analysis
This includes some significant activities of business which are most important for business
in order to carry out all its activities and operations (Jaligot and et.al., 2016 ). These activities
are known as value activities and through this model business can recognise and analyse its
value activities which are most important and which are less important.
This value chain analysis divide activities in two parts one are primary activities and other are
supportive activities.
This report includes inbound logistics, operations and outbound logistics which are primary
activities of River Island.
This is a high street fashion brand and these are important activities of the company.
Inbound Activity
This is first activity and all other activities start after this activity has been completed.
This includes the activity of acquiring material and resources before production and
operational activity gets start. This includes logistics for acquiring resources and materials and
storing resources and materials. This includes analysis of the methods of acquiring material
and from whom should the company get its material and resources required and analysing do
the activity have scope for cost and time efficient. This is very important for example River
Island get its material from a supplier who is 300 miles away and there is another supplier who
can provide required material but the cost of material is 10% higher. In this case cost of
transport is half than from the cost of material which is occurring in getting material from
previous supplier (Mudambi and Puck, 2016). This is a benefit that cost of transport and cost
of material collectively is higher in case of previous supplier and in case of another supplier
though cost of materiel is higher but collective cost is lower so River Island should get its
material from the later supplier. This is possible to know only after analysis of inbound
activities.
Operations
This is the process of converting raw material into finished goods. In case of River
Island when raw material of clothes in converted into ready dresses. This includes analysis of

the process which is used to convert material into finished goods. This step of the process
actually adds value to the material and this is most important step. In River Island if this step
is not well than it can affect the product, its cost and performance of the company.
Outbound Activity
This step in the process includes distribution of goods which have been prepared in
second step of the process to various locations and places from where customers can avail the
product (Ou-Yang and et.al., 2018). This includes distribution to dealers, retail stores and to
customers directly through online channels. This includes analysing activities related to
transport and what time does it take to fulfil one order and in what time customers can get
their order when they order online. This requires identifying most effective and efficient
methods and ways in which company can distribute goods and services to the customers and
dealers.
Supportive Activities
These activities are intended to support primary activities these are infrastructure of the
firm, human resources management, Technology development and Procurement.
In this Technology Development and human resource management are being explained here-
Technology Development
This have become very important activity and one of the most important factor through
which a firm can gain competitive advantage. Technology is important in all the functions of
River Island which start from inbound activities to services. But this is more important in
Operations, Marketing and Sales. Marketing is one of the biggest advantage of technology and
technological development through this firms can advertise and promote their product on
various platforms like social media, digital media and email marketing and other internet
marketing platforms. All this has been possible through technology and technological
development (Flanagan, Lepisto and Ofstein, 2018). This is why technology is helpful in every
activity of the firm and River Island can do this and improve its activities through use of
technology. This can also reduce the cost of the product and which can give competitive
advantage to the firm.
Human Resource Management

This is one of the most significant aspect of all the activities of the River Island or any
other organisation. This activity requires River Island to recruit, train, retain and carry out
other activities like their payroll and managing other issues which are related with human
resources of River Island. This requires to recruit the best employees and train them with best
methods so that they can perform their best in the organisation and can carry out all the
operations from inbound logistics to marketing and services in the best possible manner. This
also requires that people make proper strategies and then carry out and carry out these
activities in best possible manner.
In these activities Key Value Adding activities for River Island are-
Operations this is very important activity which includes converting raw material into
finished goods and as River Island make cloths this activity needs to be carried out in most
effective manner (Gopura, Payne and Buys, 2019). In this industry chances of material defects
are highest due to extensive production and small defects are counted as defects and also it is
difficult to deal with certain defects which may incur and increase cost of products and also
the cost of waste material.
Other than this Human Resource Management is key activity which includes managing
human resource in a way that they are able to perform their best and which can result in best
performance of overall organisation. If human resource of the River Island is not effective
than it would not be possible for the organisation to carry out any of the functions effectively
which is a loss for River Island.
Technological Development is another key value adding activity and firm should
ensure that its technological development is in the state that it can take advantage of the
competition and for this advanced technology is very important and this have become
important for taking competitive advantage.
This is why River Island needs to ensure that both these operations activity and human
resource management which is an important supportive activity technological development
and human resource management (Todeschini, Cortimiglia and de Medeiros, 2020). These are
most important supportive activities and can ensure the effectiveness of all the primary
activities.

CONCLUSION
This report included porters' five force analysis and porters' value chain analysis. Both
these are important tools which have been designed and developed by Michael Porter. In this
five forces model of porter helps in analysing external environment specifically competitive
analysis of the firm. This includes five competitive forces which are Threat of New entry.
Threat of supplementary products, bargaining power of supplier and bargaining power of
customers and rivalry among existing firms in the industry. All these are key factors which
affect competitiveness of the firm and may resist River Island to gain competitive advantage
and also can affect its performance in market and its profitability.
Threat of new entry is a big threat that River Island can face and this not only have
competition from its contemporary and immediate competitors but from local firms which can
enter in the industry. Though it does not have any direct competition from those who are
operating at small scale because this is a high street fashion brand. But still they can affect the
brand and its profitability.
Another model which have been included in this report is Porter's value chain analysis. This
includes internal analysis of the firm and its important activities which drive its business and
business operations. These activities have been divided in two parts first part includes primary
activity of the firm River Island. And second part of the value chain activities include those
activities which are supportive to primary activities and primary activities of River Island
cannot function without these activities these are infrastructure, HRM, Technological
Development and procurement. In case these activities are not carried out properly than this
can affect primary activities of the River Island.
In relation with use of Information Technology than almost all the activities can be linked with
information technology. Its activities like inbound logistics this activity can be linked with
information technology that River Island order its material and resources whenever this is
required. This is possible through efficient use of information technology which can keep all
the information up to date.
In relation with operations information technology can ensure improved coordination in the
employees so that they are able to manage the task which they are required to complete
without any ambiguity and misunderstanding. Many times improper and lack of knowledge

lead to repetition of tasks which is a direct loss to River Island. In these employees can be kept
updated with every knowledge and information they need to complete their work.
Information technology can enable business to keep updated with its dealers and parties which
are involved in distribution of goods through this parties can deliver message of customers to
firm.
In context with online sale of the goods this is information technology which enablers business
to sell its goods and products to customers directly. Customers can contact to firm through the
use of information technology.

REFERENCES
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