Competitive Environment of River Island

This report analyzes the competitive environment of River Island, a fashion retail company. It includes an introduction to River Island, its background information, offerings, and an analysis of its competitive environment using Porter's five forces model. The report also examines the inbound logistics, operations, and outbound logistics of River Island, as well as two support activities in Porter's value chain. It concludes with the importance of information technology for enhancing River Island's competitive position.

Report
River island
1

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Introduction about River Island..............................................................................................3
River Island's Background information..................................................................................4
Offerings of River Island........................................................................................................4
Analyse the competitive environment of River island...........................................................4
Analyse inbound logistics, operations and outbound logistics...............................................7
Analyse any two support activities in Porter's Value Chain of River island..........................7
Identify key value adding activities with justification...........................................................8
Business could deploy information technology, innovative idea for enhancing competitive
position...................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11
2

INTRODUCTION
Information technology is determined as technique or tool that are generally adopted by a
company in order to implement innovation in its business. By adopting innovation a company
able to gain various benefits such as modify processing, improve data management and storage,
design smart applications, improve distribution cycle and process and many more (Bachiri and
et. al., 2018). Moreover information technology also play major role in several other activities
such as sales, marketing, logistics management, research and development and so on.
Organisation selected for this assignment is River Island which is operating in retail industry of
fashion, clothing and textiles. It is private company which is owned by Lewis family named with
Lewis Trust Group. Topics included in respective report are brief description about River Island
by considering topics like background, services and products informations. Furthermore it will
also define about competitive environment of respective company as well as it also include
informations related to inbound logistics, outbound logistics and operations. Report will also
include some models like porter five force and value chain along with key value adding
activities.
MAIN BODY
Introduction about River Island
River Island is founded by Bernard Lewis and Brothers in year 1948. Its head office is
located at London, England, United Kingdom. They are operating in fashion, textiles, clothing
and retail industry. They generally offer high street fashion brand which provide their products
and services at the worldwide level. The technical hub is located at the East London, United
Kingdom. Locations in which River Island is offering are Algeria, Bahrain, Belgium, Bermuda,
Cape Verde, Canada, Costa Rica, Egypt, Finland, Fiji, French Guiana, Germany, Italy, Latvia,
Malaysia and many more (Bradley and Swaddling, 2018). The aim of respective company is to
become perfect store from which customers can pick up everything which they want for
changing head to toe look. They mainly focuses on the original as well as new fashion according
to need, preference and expectation of customers. Respective company are highly focuses on the
digital technology as that will help them in designing attracting products, attract customers
through e commerce and many more.
3

River Island's Background information
Bernard Lewis started selling vegetables and fruits in 1948 as well as then knitting wool
from bombed out site at the East End of London. After that, their three brother joined the
business and slowly it get expanded to nine stores with the name of Lewis Separates. Respective
company was first fashion boutique chain opened in United Kingdom as well as they are the one
who solely focuses on female appeal. In 1965, Lewis brother rebrand the Lewis Separates and
named it Chelsea Girl which become centre of pop fashion and culture. Then in 1970's two
Lewis brother left Chelsea Girl due to which Bernard as well as David Lewis get alone. In 1982
Concept Man was introduced which was the branch of Chelsea Girl but it aimed to men wear
that include their cloths, accessories and footwear (The Fascinating History of River Island,
2020). After six year, in 1988 Lewis brother merge both Concept Man as well as Chelsea Girl
and introduced one store with the name of River Island. In year 2013, respective company
featured pop singer Rihanna in their advertisement which help them in boosting their business.
Now River Island has near by 350 stores around the world and from which mainly are located in
United Kingdom as well as Ireland
Offerings of River Island
River Island is high street fashion store which offer huge numbers of women's men's as
well as kids clothings, accessories and footwear. They have its in house designing team at the its
head office i.e. West London, Headquarters. They offer wide variety of women products through
different segments like shoes & boots (Sandals, Boots, Heels, Shoes, Trainers, shoes, wise fit
shoes etc.), Clothing (Blouses, shirts, coats, jackets, dresses, Denim, jeans, Jumpers, Cardigans,
Leggings, playsuit & jumpsuits, shorts, socks, tights, tops, trousers and so on). In addition to this
they also offer wide range of products for men such as jeans, joggers, hoodies, jackets, blazers,
sweatshirts, shoes, boots, trainers, loafers, bags, belts, jewellery and many more (RIVER
ISLAND, 2020). They also offer products for kinds which is divided into two categories i.e. girls
as well as boys.
Analyse the competitive environment of River island
Competitive environment is considered as dynamic system which is external in nature as
well as that a business functions and competes. If a market have huge numbers of seller of a
particular products or services then they faced high competitive environment whereas if there is
less seller of similar goods or services then there is less competitive environment at the potential
4

marketplace. If a company operates at multinational level then they faced competitive
environment at local, national as well as international level. In respect of River Island they also
conduct their business functions and operations at the international level due to which they go
through high competitive environment (Cowley and Cowley, 2018). Moreover they also operates
in retail and fashion industry and at similar industry there are numbers of companies are
operating. In order to conduct analysis of competitive environment an organisation can adopt
numbers of methods or theories. So for this River Island adopt Porter's five forces analysis which
explanation is given below:-
Porter's five force model
Respective model is introduced by M. Porter in 1979. Respective model is generally used
by a company in order to analyse its competition at the marketplace as through that they can
develop effective strategies as well as plans accordingly. Through this company also able to
determine their strengths and weakness at the competitive or external environment. This model
include five forces that are of competitive nature as well as it directly impact industry. In context
of River Island, they adopt Porter's five force model so that they can determine as well as
understand their competitive environment which help them in developing proper decision.
Through that decision they can also able to gain competitive advantages at the potential
marketplace. Evaluation of respective model in respect of River Island is defined below:-
 Bargaining power of customers: Through this an organisation able to understand power
of customers at the potential marketplace. If the power of buyers will high they can
demand for high quality products at low price whereas if power is low then customers
need have to pay more for low quality products and services (Doi, Mizutani and Kohno,
2018). In respect of River Island, they are operating in fashion, textile, retail and clothing
industry at which there are numbers of other companies operate. So that customers have
high bargaining power and according to that they demand quality products at low price.
 Bargaining power of suppliers: This force of respective model show the power of
suppliers at the marketplace. If suppliers have high bargaining power then they can
demand for high among in respect of low quality materials whereas if power of suppliers
is low then they need to offer high quality material at low prices. In respect of River
Island they have their in house designing team but they need to supply material from
different suppliers. In respect of River Island they offer high quality products for which
5

they use quality material which are generally not offered by all suppliers, so in this case
supplier bargaining power will be low.
 Industrial rivalry: Through this factor a company can determined competition at the
marketplace as well as it will also help in estimating profitability level of sector in which
particular company is operating (Du Preez, M. and Bouwman, 2018). If their will be large
numbers of companies operating in similar industry then the industrial rivalry is high
where as if there is less companies operating in particular sector then rivalry ratio will be
low. In respect of River Island, their competitive rivalry will be high because because
there are numbers of others companies who are operating in similar sector i.e. ZARA,
TOMS, TOPMAN, G-Star, All Saints and many more.
 Threat of new entry and exit: This force is determined as force through which a
company can analyse how easy new firm can enter or exit from marketplace. If entry and
exit will be easy then company face high threat of competitive advantage whereas if there
is barrier and it is hard for new firm to enter and exit then threat will be low. In respect of
River Island, threat of new entry and exit is moderate because in clothing industry there
are less barriers but it is not easy for any new firm to develop goodwill and market value
like River Island in short time duration.
 Threat of substitutes: It refers to factors which help in determining how easy customer
can find substitutes of specific company products and services. If buyer can found similar
products easily then threat will be high whereas if customers not able to get substitutes
easily then threat will low (Jafarabadi and et. al., 2018). In respect of River Island, threat
of substitutes is high because there are numbers of other clothing company who offer
similar variety of clothing, footwear and accessories.
By conducting analysis of Porter's five force model in respect of River Island it can be
justify that moderate because at the marketplace some forces are in favour of company whereas
some are against of it. So it is necessary for this firm management to conduct proper analysis of
market and outcome because that will help them in developing effective strategies as well as
action plan (Li and Chan, 2018). Moreover in order to gain competitive advantages they need to
adopt advance technology because it help in various activities such as designing, manufacturing,
minimising wastage, supply chain management and so on. It will also help them in attracting
more and more customers through adopting digital technology medium.
6

Analyse inbound logistics, operations and outbound logistics
 Inbound Logistics: Respective factor include numbers of elements which help a
company in conducting their work effectively through advance technology such as
expediting, sourcing, transporting, storage and receiving products that are coming within
a business unit (Lopez and Pigafetta, 2018). The main focus of inbound logistics is on
storage of products as well as transportation of offerings within business unit. In respect
of River Island, they need to considered quality control factor and use technology related
to it. This is so because it will help in conducting effective inbound logistic management
as well as it also leads to minimise wastage that take place during manufacturing.
 Operations: It is determined as function that complies with managing of internal work or
environment of a company as that will help them in conducting activities effectively. In
this an organisation develop as well as sell its offering to the potential customers so that
profitability get increased. This is also determined as second level of value chain
analysis. In context of River Island, it is necessary for them to adopt new technology at
their workplace as that will help in conducting business operations in proper manner.
Along with this it also help in minimising errors as well as time consumption.
 Outbound Logistics: This is determined as process which include transportation,
distributing and storing of products and services for the potential customers so that their
need, demand and expectation get fulfilled. This process will mainly take place when
customer or buyer conduct order and it will end when customer get the product or
services in effective manner (MacArthur and et. al., 2018). In respect of River Island they
need to adopt advance technology for packaging, manufacturing and delivering products
so that potential buyer get products in appropriate situation as well as it will also help in
providing products in proper time.
Analyse any two support activities in Porter's Value Chain of River island
Porter's value chain model is developed by Michael Porter in 1985. This model is
considered as strategical tool that is adopted by an organisation for analysing inside activities of
a company (Mickey and et. al., 2019). Activities included in this are determined as source of cost
and differentiate benefits. Porter's value chain model is based on two types of activities i.e.
support activities and primary activities. In respective model various activities are considered
such as human resource management, infrastructure of firm, technological development,
7

procurement and many others. River Island adopt Porter's value chain model for determining its
competitive advantages in respect of their competitors such as ZARA, TOPMAN, G-Star and
many more. Below main two support activities of River Island are given:-
Two secondary activities of Marks and Spencer
 Human resource management: Through this support activity River Island able to
conduct numbers of work such as hiring, recruiting, training, compensating, developing,
motivating, encouraging employees. Moreover it will also help company to enhance their
employees performance which help in attaining goal main and objectives (Nie and et. al.,
2018). Furthermore, River Island can also adopt new and advance technology as that will
help them in conducting all activities effectively related to human resource management.
Through advance technology respective company also able to manage their data properly
and successfully.
 Technology Development: River Island adopt technology of both in house as well as out
sourced because it will help them in adopting innovation practices in effective manner. In
addition to this, it is essential for respective company to adopt technology on regular
basis because through that they able to conduct work properly as well as will also help in
inventory management (Skipton, Saumur and St-Onge, 2018). Moreover it will also lead
to introducing new, unique and innovative clothings and other options for potential
customers as that will also lead to increase in sales and profitability.
Above mentioned factors are two main support activities which are conducted by River
Island and for that they need to adopt advance technology because through that they able to
conduct their work effective. That include designing, manufacturing and delivering of cloths,
accessories and footwear according to demand and need to customers.
Identify key value adding activities with justification
Value adding activities refers to that activities that are adopted by a company in order t
enhance benefits or feature of a particular products and services so that customers get attracted
toward it and purchase it immediately (Vidyasakar and et. al., 2018). But for a company it is
essential to conduct market analysis and then develop strategies accordingly because that will
help in determining need, demand and expectation of customers properly. In context of River
8

Island, there are several key value adding activities which help them in gaining competitive
advantages, from which some are mentioned below:-
 River Island must come up with new, unique and innovative ideas or design on
continuous basis because that will help them in attract more and more customers. This
will also help in increase market goodwill and market shares as well as it also help firm
in sustaining at marketplace for long period of time (Watts and Watts, 2018). Moreover,
it will also help respective company to enhance loyalty level of customers through which
they can gain high profitability ratio. This will also enhance motivation level of
employees because when they get effective responses from customer they feel
encouraged which improve their productivity.
 River Island can increase its promotional activities as by it they can attract wide level of
customers from all location as well as it will also increase their publicity at the
international level. In respect of this, respective company may adopt advance technology,
digital technology and social media like Facebook, Instagram, LinkedIn, Twitter,
Snapchat and so on. This is so because through it they able to attract huge numbers of
customers from different different location at national as well as international level.
Moreover it will company in ensuring that their sales get increase which directly leads to
enhancement of profitability and market shares.
By adopting above mentioned value added services River Island able to offer quality as
well as innovative services to its potential customers. Through that respective company also able
to satisfy need, demand and expectation of customers in successful manner.
Business could deploy information technology, innovative idea for enhancing competitive
position
River Island may adopt various information technology as well as innovative ideas in
order to enhance their competitive position at the potential marketplace. Through this they able
to gain numbers of benefits such as increase in sales, profitability, goodwill, market shares and
many more (Zhang, 2018). From which some main ideas through which respective company can
gain competitive advantages are given below:-
 River Island can design cloth like one size fit, this types of cloth can fit by any person of
any size. Through this respective company brand value get increase as well as it will also
help them in attracting more and more customers towards store.
9

 River Island can also manufacture or design cloths or accessories in which medical
sensor are in built, the main function of that sensor is that it gather medical information
of person. This will help in increasing customers loyalty because company provide them
effective services and products.
By adopting and implementing these advance technology as well as innovative ideas
River Island able to attract more customers and it will also help them in sustaining in
marketplace for a long time duration by gaining competitive advantage.
CONCLUSION
By conducting analysis of above discussed point it can be summaries that in today's time
every company adopt information technology as it will help in conducting business activities,
operations and functions successfully. For adopting and implementing information technology at
the company, its management need to conduct several activities such as deep analysis of firm's
which include its products and services, background and so on. Moreover, firm also need to
conduct competitive analysis and for that they may adopt different models such as porter's five
force model because it its factors will help in determining forces which may impact on
competitive environment. Along with this management also need to conduct analysis of their
business as well as for that they may implement value chain model because it help in analysing
different activities for firm i.e. primary as well as supporting. Furthermore they also need to
determine whether they can adopt information technology effectively or not.
10

REFRENCES
Books and Journals
Bachiri, T. and et. al., 2018. First report of the plasmid-mediated colistin resistance gene mcr-1
in Escherichia coli ST405 isolated from wildlife in Bejaia, Algeria. Microbial Drug
Resistance. 24(7). pp.890-895.
Bradley, M. and Swaddling, A., 2018. Addressing environmental impact assessment challenges
in Pacific island countries for effective management of deep sea minerals
activities. Marine Policy. 95. pp.356-362.
Cowley, P. and Cowley, P., 2018. Report Card on British Columbia's Secondary Schools 2018.
Fraser Institute.
Doi, W., Mizutani, A. and Kohno, H., 2018. Larval release rhythm of the land hermit crab
Coenobita cavipes Stimpson, 1858 (Anomura, Coenobitidae) on Iriomote Island,
Japan. Crustaceana. 91(2). pp.199-211.
Du Preez, M., Nel, R. and Bouwman, H., 2018. First report of metallic elements in loggerhead
and leatherback turtle eggs from the Indian Ocean. Chemosphere. 197. pp.716-728.
Jafarabadi, A. R. and et. al., 2018. First report of geochemical fractionation distribution,
bioavailability and risk assessment of potentially toxic inorganic elements in sediments
of coral reef Islands of the Persian Gulf, Iran. Marine pollution bulletin. 137. pp.185-
197.
Li, F. and Chan, B. P. L., 2018. Past and present: the status and distribution of otters (Carnivora:
Lutrinae) in China. Oryx. 52(4). pp.619-626.
Lopez, D. and Pigafetta, F., 2018. A Report of the Kingdom of Congo and of the Surrounding
Countries. Cambridge University Press.
MacArthur, J. and et. al., 2018. A North American survey of electric bicycle owners.
Mickey, R.C. and et. al., 2019. Development of a modeling framework for predicting decadal
barrier island evolution. US Geological Survey Open-File Report. 1139. p.46.
Nie, J. and et. al., 2018. Rapid incision of the Mekong River in the middle Miocene linked to
monsoonal precipitation. Nature Geoscience. 11(12). pp.944-948.
Skipton, D. R., Saumur, B. M. and St-Onge, M. R., 2018. Regional Bedrock Mapping of
Northern Baffin Island (Steensby Inlet and Barnes Ice Cap Areas), Nunavut: GEM-2
Baffin Project, Report of Activities 2018. Geological Survey of Canada.
Vidyasakar, A. and et. al., 2018. Macrodebris and microplastic distribution in the beaches of
Rameswaram Coral Island, Gulf of Mannar, Southeast coast of India: A first
report. Marine pollution bulletin. 137. pp.610-616.
Watts, B. D. and Watts, M. U., 2018. Virginia peregrine falcon monitoring and management
program: Year 2018 report.
Zhang, S., 2018. Upper Ordovician conodont biostratigraphy and revised lithostratigraphy and
geological map, Akpatok Island, Ungava Bay, Nunavut. Canadian Journal of Earth
Sciences. 55(1). pp.52-69.
Online
RIVER ISLAND. 2020. [Online]. Available through: <https://www.riverisland.com/women>.
The Fascinating History of River Island. 2020. [Online]. Available through:
<https://www.thefactshop.com/fashion-facts/river-island>.
11