Analyzing IT Assets And RBV Of Gap Inc.

Identify various IT assets and their business value returns mentioned in the case study using the IT Portfolio theory.

To what extent does this organisation have an IT portfolio which provides a balanced view of value, risk and return?

Ask yourself: “To what extent does the case organisation have an IT portfolio, which provides a balanced view of value, return and risk?”

How do you think that resources and capabilities add value and rarity for Gap?

IT Assets of Gap Inc. Based on IT Portfolio Theory

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

Balanced view of value, risk, and return in Gap's IT Portfolio

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. 

Hint: In building the list of resources and capabilities, make sure you allocate them in the right category (e.g. tangible/intangible, technical or norms/values). Discuss value and rarity in terms of principles of RBV and VRIO.

References:

Cho, W., Shaw, M. J., & Kwon, H. D. (2013). The effect of synergy enhancement on information technology portfolio selection. Information Technology and Management, 14(2), 125-142.

Dahlstrom, E., Walker, J. D., & Dziuban, C. (2013). ECAR study of undergraduate students and information technology. 2013.

Han, K., & Mithas, S. (2013). Information technology outsourcing and non-IT operating costs: An empirical investigation. Mis Quarterly, 37(1).

Luftman, J., Lyytinen, K., & ben Zvi, T. (2017). Enhancing the measurement of information technology (IT) business alignment and its influence on company performance. Journal of Information Technology, 32(1), 26-46.

Mitrega, M., & Pfajfar, G. (2015). Business relationship process management as company dynamic capability improving relationship portfolio. Industrial marketing management, 46, 193-203.

Schwalbe, K. (2015). Information technology project management. Cengage Learning.

Willcocks, L. (2013). Information management: the evaluation of information systems investments. Springer.