Analysis of River Island's Business Operations and Strategy

This report provides a comprehensive analysis of River Island, a major UK-based fashion retailer. It begins with an overview of the company's background, business strategy, and product offerings. The report then delves into a PEST analysis, examining the political, economic, social, and technological factors impacting River Island. Following this, it applies Porter's Five Forces model to assess the competitive environment, including the bargaining power of customers and suppliers, the threat of new entrants and substitutes, and the intensity of rivalry. The analysis extends to the company's value chain, focusing on primary and support activities, and identifies strengths and weaknesses. The report concludes by summarizing how IT and innovative ideas can be deployed to improve business processes and enhance River Island's competitive positioning. The report emphasizes the importance of customer satisfaction, brand equity, and technological advancements in the retail sector. The report also emphasizes on the importance of ethical standards and transparency in supply chain management to ensure the ethical standards and build long-term mutually beneficial relationships with suppliers and employees.

REPORT based on company
RIVER ISLAND

Table of Contents
INTRODUCTION...........................................................................................................................3
Company's background...............................................................................................................3
PEST Analysis............................................................................................................................4
Analysing the competitive environment ....................................................................................5
Analyse the two primary and support activities in porter's value chain and strength and
weakness River island.................................................................................................................7
Summarise and reflect how business can deploy IT and use innovative ideas to improve
business processes to enhance competitive positioning..............................................................9
CONCLUSION .............................................................................................................................10
REFERENCES .............................................................................................................................12

INTRODUCTION
Company's background
Information technology is becoming an integral part of every organization around the
world (Gielens and Steenkamp, 2019). Companies are becoming more computerised in its
operations which is visible in its CRM, billing system, integrated management information
system etc. The present report is going to discuss the role of IT play in River island , a Fashion
retailer based in United Kingdom.
River island is one of the biggest Fashion retailer chain in UK. It is headquartered in
London, England in United Kingdom. The company is a private traded company and its deals in
fashion, clothing, Textiles and retail sector. The company enjoys a tremendous strength of
human capital with more 165000 dedicated employees. It has around 635 stores in United
Kingdom in the year 2018. The firm reported a net income of £944.5m (December 2017).
Business strategy of River island : The company has always focussed on providing low
cost products and services with supreme quality. This is reflected from its forever slogan that
says “Save money. Live Better”. The company focuses on its customers and its strategies
revolves around customer satisfaction. Currently, the organization is laying its emphasis on
improving and enhancing its brand equity and customer loyalty (Hanlon, 2019). The company
also focuses on employing the latest technology in its operations for ensuring higher production
through economies of scale could be achieved.
The entity is channelising its efforts towards enhancing customer's in-store experience by
making the stores highly attractive, making its employees highly trained regarding how they can
make its customers fully satisfied. Also, the firm is continuously working towards marketing and
promoting its brand on digital media like Facebook, Instagram, Twitter etc. It also has a online
website that explains the existence of the company, its IT department constantly work on
providing easy to use Interface for the users.
Products and services of River island : It offers Fashion products such as retail food
items, apparel, furnishing products. The River island 's stores provides fresh meat, frozen food
products, bakery items manufactured by itself in the premises, clothing for men, women and

kids. The company also offers gardening supplies, toys, stationary, toys, greeting cards, gifts.
Some of the stores of the organization also renders petrol to the customers (Hartmann, A., 2019).
The enterprise deals in telecommunication sector and offers network services to the
people by the name of River island Mobile. The financial services' division of the company
offers car insurance, credit cards, travel money beaurax by the name of River island Money.
These financial products and services are sold through online medium or through telephones,
these are not directly sold in its supermarket stores. River island distributes its product and
services through its 25 distribution centres across the country through which the goods are
reached to its stores at different locations.
PEST Analysis
This analyses the external macro-environmental factors that affects the functioning and
operations of all firms in a industry (Hoveskog, Halila and Olofsson, 2019). The model consist
of four component that are mentioned below:
Political factors : EU regulations, international trade regulations, directives, stability of
government, war like situations are some factors that affects the firms in the country ( Kan,
Chung and Chung, 2019). For example, country's liberal trade policies have positively affected
the business of the supermarket retailer by which it has started its operations in Chinese market.
However, instability in government, strict and restrictive trade policies, war like
situations could adversely affect the functioning and profitability of consumer goods industry.
Economic factors: Economic growth rate, unemployment rate, interest rates, exchange
rates affects the trade of an industry in the country. High fluctuations in the exchange rates could
hamper the stability in the earnings of the supermarket industry (Maity and Ganguly, 2019).
Similarly, growing economy would favour the business of supermarket retailer because of the
rise in the purchase power of consumers, people can afford more lifestyle products.
Social factors : Changing preferences of customers, ethnicity, education level etc., are
some factors that affects the operations of supermarket industry in UK. River island gets
affected by the constantly changing preferences of the customers (Moons, Waeyenbergh and
Pintelon, 2019). For example, due to behaviour of getting informed about the products and
services, an increased demand has been generated for the organic and nutritious products.
Technological factors: The level of technological advancement a country or industry
possesses. For remaining competitive in the industry, River island have to make sure that it

employs the latest and advanced technology in its business such as online retailing, marketing
through digital channels etc.
Analysing the competitive environment
The company can assess its competitive environment by conducting a porter's five forces
analysis. The model helps in the identifying the forces of different factors that can affect the
profitability and stability of River island ( Neukirchen, Gansser and Klumpp, 2019). The model
consist of various elements that will highlight the competitiveness of the company that are
discussed below:
Bargaining power of Customers: The bargaining power of buyers is high when there
are large number of supermarket retailers in the market. Here, River island faces high force from
buyers because customers can switch the company if the prices of the products and services rises.
People have variety of options to buy Fashion and general merchandise from local vendors other
supermarket retailers ( Phadermrod Crowder, and Wills, 2019).
The company can lower this force by producing goods and services at low cost and
serving the same to the customers. This can be achieved by reducing the unnecessary costs that
contributes to the cost per unit of goods and services.
Bargaining Power of Suppliers : Suppliers are the merchants, companies that sells their
products to the supermarket retailer (Rathnayake, 2019.). There are numerous suppliers that
offers their inputs to the company. Thus, the force is low.
However, there are situations when the number of suppliers are less in market, in that
case the force is high. River island in such circumstance, can try out the product and services of
different suppliers for developing another sources of supplies. This will help in bringing the
force of big suppliers in the market.
Threat of new entrants : Entering into retail supermarket industry requires huge capital
investments. For example, a new firm entering into this industry have to investments in terms of
opening a large store having ample space for offering wide range of products and services
(Rosca and Bendul, 2019). From this, it can be said that the company have low force against
such threat.
However, the company needs to consider small Fashion stores and other companies
offering similar products because these vendors generally provides goods at cheaper prices.

Threat of substitutes : There are different retailers in the market that offering quality
goods and services at the most reasonable prices. Customers have substitutes in the case the
River island fails to meet the needs and requirements of the target audience. The force is high in
the sense that people can avail the products and services easily from other places.
River island can overcome this threat by serving the needs of customers in terms of
quality of goods and services, low prices, easy access of required products at the stores etc.
Rivalry : H&M, New look and Topshop are the biggest competitors of River island . The
force of rival firms is very because each of the supermarket retailer is offering goods and
services at the most competitive prices.
The organization River island can bring down this force by making its products highly
differentiated from its competitors. This could be done by adding new features to its products,
offering products at relatively lower prices than its rival firms' products, or making its in-store
experience highly valuable to the people shopping from its store.
Therefore, from the above analysis, it can be said that River island needs to the power of
customers and must consider its competitors for staying competitive in the market. The
technology can play a crucial role in making the company highly effective and efficient in its
operations and gaining a competitive advantage over other firms in the market. It can make its
operations highly automated for reducing the manual errors providing higher customer
satisfaction to people. It can employ artificial intelligence (AI) in its customer relationship
management by solving the queries of the customers in a second (Sarén, 2019). This would
enhance the customer experience for the company, leaving target audience highly satisfied with
the retailer.
It can employ the most suitable integrated management information system (MIS) for
better coordinating the management functions of the firm. By applying such technology which
best meets their business needs. It would lead to quick access to organizational data and better
preparation of management reports that could help the management in taking rationale decisions
for the company.
The external assessment of the environment also highlights the opportunities and threats
that could affect the River island ;
Opportunities are expanding its business into more international markets, Applying AI
in its operations, helping it to form a competitive advantage over others, making products

innovative to attract more customers and reach masses. The company has the opportunity of
utilising the power of e-marketing to its maximum for enhancing its brand image and can make
its presence felt more by trading through online channels.
Analyse the two primary and support activities in porter's value chain and strength and weakness
River island.
Porter value chain will be consist of number of activities as primary and support. Thus,
primary gives major focus over production, maintenance, sales and support to the commodities
and services are to be supplied ( Szopinski and et.al., 2019). Thus, River Island deals is Fashion,
retail, textile and clothing industry. So, it is essential to maintain quality of products so that large
volume of customer can get attracted towards the commodities avail in market.
The two main primary activities as-
1. Inbound Logistic- In this, there are number of methods and processes that is inclusive of
receiving, storing and internal distribution of raw materials. In order to process business
activities efficiently the firms needs to take initiatives to the creation of value in this matter. The
business culture of River Island is based on making efforts to build long term, mutually
beneficial relationship with suppliers and employees (Wirtz, and Ehret, 2019). Furthermore,
supplier of the quoted firm are responsible to be actively responsible and monitor working
conditions in each manufacturing department of entity, So, it can be possible to achieve the
ethical standards. In order to carry out the business activities effectively the managers need to
build better relations.
The workers to the manufacturing department should work within the quality perimeters
so that each thing can be done in better and efficient mode. This kind of functions leads to gain
competitive advantage within enterprise (Zhao, Liu and Xue, 2019). Thus, inbound logistic must
share the all ethical information openly and honestly and with help of disclosing detailed
information about the production as raw material, place and methods of manufacture and the
parties who are involved in this process so that altogether better functions can be carried out. It is
responsibility of supplier to work in proactively manner so that better improvement can be done
in order to meet the ethical standards. In order to follow the practices of purchasing that are
consistent with the delivery, the some of ethical standards are must be followed as-
 To understand the production lead times.

 To take number of initiatives in order to negotiate the fair price for the commodities.
 The communication between the workers of entity must be in clear, accurate and timely
manner.
 The individuals should work together in order to have improvement in the efficiency in
the supply chain relationship.
2. Marketing and sales- These are all processing in terms to putting the commodities and
services in market and that must be inclusive of managing and generating customer relationship.
Thus, principles are to be based on process the business activities in such a manner that aids to
be apart form the rivalries in market and supports to create advantages for the customers
( Akkaya, 2019). In this present time, marketers of this industry are spending a little fortune on
influencer marketing. In addition to it, this is stated that people engaged with influencer and they
also have genuine connection and they create it. With the use of social media approach they are
able to perform their business activities in better mode. In order to promote the better marketing
and selling activities the River island are taking initiatives to talk with customers so that the need
and wants can be analysed.
The two main support activities-
This is the term that represents the linkages between a support and primary activity. Thus,
for example human resource management is crucial within operation of primary activity but it
also supports the other activities such as service and outbound logistic. Hence, support activity to
River island has defined as-
1. Human resource management- The human resource departments of the enterprise plays
vital role in terms to streamlining the operational activities of enterprise. The HR
manager of the River island are responsible for recruiting staff, training, coaching and to
take better initiatives for retaining the staff so that each things can be done in better and
efficient manner (Porter’s Value Chain Analysis, 2018). They are responsible to hire the
suitable candidates so that marketing, sales and production activities can be carried out
sufficiently. By hiring the skilled and talented workforce they are able to supports the
enterprise and also aids in handling specific performance issues. They are the managers
who perform their role as to plan, direct, coordinate the administrative function within
enterprise (Xiao and et.al., 2019).

2. Technology development- These are the activities that relates with the development of
product and services within the enterprise and to take better initiatives in order to perform
better internally and external functions (Ritzén, 2019). With the advent of technical
advancement, the can lead their business function in more effective manner. Thus, it can
be stated that the changes in culture of customers have hit the all retailer sector and
luxury brands. The global success of fast fashion retailers like fashion industry, forced
luxury all makes adjust to an evolving fashion business model. In the age of social
networking, the fashion marketing embraced technology and spend lot of time on money
online. There are lot of fashion firms who are looking for Augmented Reality in order to
reduce the return rates to have the better sense of what kind of commodities will look
good on their customers.
Evaluation on strength and weakens of Rivers islands-
The River island has developed a unique and trend brand identity that leads the UK High
street. By comparing this brand with competitors as H&M, New Look and Topshop it is clear to
see the brand at the top of high street fashion game. This brand is very effective as it offer greater
customers services and also provide own style insider magazine. In order to cope up with the
weakness and to develop good customer services they must works as to conduct better service as
more stand preset on shop-floor to acknowledge, approach and offer help to customers (Kirchner
and Razmerita, 2019). Thus, they must have creation of eye catching window that displays
stands out from competitors and surrounding retailers.
Summarise and reflect how business can deploy IT and use innovative ideas to improve business
processes to enhance competitive positioning.
With the help of above understandings, it can be summarised that primary activities as
inbound logistic and marketing and sales. The supportive activities as human resource and
technological department plays crucial role in terms to streamlined the operational activities of
the enterprise (Castillo-López and et.al., 2019). Thus, both activities are vital so that entity can
be able to enhance profitability and productivity. By the use of information technology, River
Island will be capable to introduce the customers about the use of innovative ideas so that there
can be better improvement in the process of businesses and this will also he helpful in order to
enhance the competitive positioning.
There are some innovative ideas to bring improvement in business function as-

 To achieve the retail success in fashion industry by selling the beautiful and trendy
cloths. The company should works as to offer the experience that aids to make clothes
shopping a delight to the customers.
 The River island should have the use of better technical advancement to improvised
merchandise management with help of offering better reporting and analysis.
 The quoted firm must have the use of Artificial Intelligence in order to take efforts to
finding new clothes. The AL is continual learning and it is based on thing that what
customer return and keeps and it is kind of recommendation that help to get better and
more personalised over time (5 Technologies Transforming Retail in 2018, 2018).
 Thus, the the technical advancement as RFID should be adopted by the Rive island so
that they can able to track the inventory that which commodity is selling at it best level.
With help of it, low demanding products are able to remove and improve.
 The personalisation and customisation are the broader areas for fashion retailers in order
to paying attention. By brining the expert staff in fashion retailing sector aids to have
enhancement on business functions.
CONCLUSION
Hereby, it can be concluded that Information technology is the use of computers, storage,
networking and other physical devices. The technical advancement in any industry aids to
enhance the growth of the enterprise. Thus, present report is based on River Island, it is fashion
industry deals in clothing, textile and retail sector. Furthermore, assignment has covered the
topics as brief discussion about the PESTLE and Porter Five forces in order to evaluate the
internal and external environment of the enterprise. Thus, Potter value chain analysis has been
conducted in terms to find out the primary and supportive activities that aids to conduct better
business processes. Lastly, innovative ideas has been recommended in order to bring
improvement in working of the enterprise.

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