IT Portfolio Theory and Resource Based View of Gap Inc.

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MIS782 Assignment 1 – IT Portfolio Theory
This document is a sample only. Feel free to change the formatting, headings and response format
(table or paragraph based responses) as you see fit.
Task 1:
1a. Identify various IT assets and their business value returns mentioned in the case study
using the IT Portfolio theory.
Asset IT Portfolio Asset Business Value
Class
E.g. product inventory system E.g. transactional asset Business value
Gap digitised its entire product inventory system
and introduced retailed service
Digital capability;
Digital capability to
understand the
customer needs and
trends followed by the
customers in fashion
industry. The google
trends service helped
the company to
understand the future
pathway of business.
Gap implemented big data based to execute the
predictive marketing. Gap replaced the position
of creative directors and replaced the approach
of marketing with data driven approach using
google analytics, internal customer feedback.
Transactional asset Digital capability to
understand the
customer needs and
trends followed by
the customers in
fashion industry. The
google trends service
helped the company
to understand the
future pathway of
business.
Gap replaced the centralized human oriented
decision taking system with big data based
feedback and research system.
Strategic asset The IT asset of the
company that is big
data based prediction
and feedback system
designed it helped the
company to get a
more realistic
approach towards
improvement of sales
of the company and
gain a strong market
position.
Selling its products in e commerce sites will help
the company to grow further as the only sales
from brick and morter stores may lessen the
Strategic asset The strategy taken by
the CEO of gap
company was to sell

company’s profit. its product on online
retailers and e
commerce sites like
AMAZON. It will
help the company to
explore the new
avenues of sales and
enter the fast growing
online market.
The product strategy taken by the CEO was to
replace the creative director and make the
products based on market research
Informational asset The market research
empowered the
company to develop
and modify the
products according to
the data collected
from the market
research. The
implementation of IT
helped in doing so.
The Gap company also introduced the product
3.0 which is the project of new types of project
launch based on the research done.
Strategic asset The strategy of the
company used real
time data analysis to
understand the sales
figure and track the
proceedings.
The gap company shifted the distribution model
of the company and allowed to sell its products
other online retailers and franchise owner apart
from their own brand store.
Strategic asset The strategy will
allow the company to
sell its products
outside the country
and grow its business
Hint: You may find it challenging to identify various IT assets in the case study due its focus on
analytics systems. However, there are mentions of various IT assets/functions of IT assets (e.g. product
inventory). You are also welcome to guesstimate the usual ones that most organisations likely to own
(e.g. HR system, Payroll, infrastructure). Explanations should be included briefly in the relevant table
cell.
1b. To what extent does this organisation have an IT portfolio which provides a
balanced view of value, risk and return?
The company does have an IT portfolio which provides a balanced view of value, risk, and return.
The company has a data science driven realistic plan to develop the business of the company. The
company has a data driven approach to do the valuation of the company and take calculated risk. The
company uses big data to modify its strategies according to the market needs and customer feedbacks
received from data mining. Digital data streams allowed the company to track and observe the
customers’ purchase trend and the whole trend of them purchasing the products. Their online consumer
behavior is tracked. The mining of big data yielded many aspects to work on which helped the decision
making at managerial level and decide company policy. It helped to judge the customer loyalty to brand
value and it helped the company to develop an algorithm driven approach. The algorithm driven
approach helped to satisfy the customers and maximized the profit. It allowed “remarketing” and
“retargeting” an existing customer. The digital advertising system also helped to view the value and
return of the company.
The IT portfolio has the ability to predict consumer’ future fashion tastes. Traditional market
research method was not able to predict the trend which the implementation of IT portfolio did. The
Customers’ future taste determination capabilities helped the company to make and design the products
according to the dressing sense and choice of the customers. Relying on the past purchase behavior was
not enough to judge the risk of producing the new product.
Task 2:

2a. Based on the Resource based view of the firm (RBV), develop a list of resources and
capabilities that the organisation has access to.
Resource based view is a framework to get information about the strategic
resources possessed by a company from managerial point of view. The resources which have
potential to deliver a comparative advantage to the gap company in the market. The
resources which give the company an advantage are
BRAND REPUTATION- The company is one of the market leaders in the fashion industry. It
has revolutionized the dressing style of the country previously. The company accuired brands
like banana republic to grow its business and moved to a higher quality tier of clothing.
MARKET DEMAND- The market demand of the products of the gap company is high which is
a major advantage of the brand to excel in the fashion industry. The demand of the clothes
has grown higher and higher with the time as the company has total five brands under its
hood and they all are reputed. The products of the brand are of good quality and are also of
decent price.
CREATIVE APPROACH- The creative designing of the clothes also helped the brand to cope up
with latest fashion trends.
DATA DRIVEN APPROACH- Data driven approach i.e the IT asset of the company that is big
data based prediction and feedback system designed it helped the company to get a more
realistic approach towards improvement of sales of the company and gain a strong market
position.
ONLINE SELLING- the approach of the company to sell its products on e commerce sites like
amazon helped them to grow with modern trends of business and compete with other online
retailer brands. The past reputation and brand loyalty are the key of the company to
succeed.
NEW PRODUCT LAUNCH- Every season gap produced lots of new dresses of new design,
colour and size while the company website generally offered the whole product assortment.
Every brick and morter store had the constraints of low space and offered only a small share
of variety of products of the company. The online system offered the whole product line up
to be sold from one place.
2b. How do you think that resources and capabilities add value and rarity for Gap?
The resources and capabilities make the gap company one of the most reputed brands present in
the market. The introduction of big data makes the gap company a combination of science and art where
the company not only depends on the artistic approach of the creative directors but collects data from
the data mining to understand the market need and make new products which are demanded.
The company has a data driven approach to do the valuation of the company and take calculated
risk. The company uses big data to modify its strategies according to the market needs and customer
feedbacks received from data mining. Digital data streams allowed the company to track and observe the
customers’ purchase trend and the whole trend of them purchasing the products. Their online consumer
behavior is tracked. The mining of big data yielded many aspects to work on which helped the decision
making at managerial level and decide company policy. It helped to judge the customer loyalty to brand
value and it helped the company to develop an algorithm driven approach.
The capability which makes the gap company rare is the shifting distribution model which made
the company present in other countries which historically was not possible as the company used to sell
its products from its own branded retail stores. The decision of selling its products both on Amazon and
through other franchises made them one of the most unique brands in the market to be present in both
the online market place and brick and morter stores.
The proper leadership of the CEO added value to the gap company and the decisions taken by
the CEO to digitalize the whole market analysis and creative process made the company a standout in the
market which is changing randomly.
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