Analysis of Business and IT/IS environment of Gymshark LTD. and Proposal of Business and IS/IT StrategyAbstractThis report is conducted to investigate challenges,issues and disruptors facing Gymshark Ltd, an online retailer of gym apparel.Following this, an examination of external and internal factors of the businessenvironment and IS/IT environment is conducted to identify a business IS/ITstrategy. The current situation of Gymshark is analysed using aSWOT analysis. The external environment of the business and IS/IT is examinedthrough the use of PESTLE analysis and Porter’s five forces model. Current ITtrends within the market are also explored to identify avenues for innovation. The internal environment of Gymshark is then analysedused a Balanced Scorecard, with accompanying critical success factors. IS/ITconsiderations are also highlighted for each of the perspectives. Theapplication portfolio of Gymshark and potential future applications are alsoidentified with the use of an application portfolio matrix. Using the analysis, a potential IT business strategyis discussed for the business moving forward. 1.    Introduction Gymshark Ltd. is a fitness apparelonline retailer, based in the United Kingdom. It was ranked the number onefastest growing company in terms of sales in 2016 (Fast Track, 2016). Createdin 2012, it has grown exponentially through devotion toproducing innovative, effective performance wear and an ever-expanding socialpresence (Gymshark, 2017). This social presence has been aided by thesponsorship of fitness athletes and social media influencers who promote theirproducts. 1.1  Objective of ReportThis report has been conducted toevaluate the challenges, issues, and potential disruptors that Gymshark face.The internal and external business and IS/IT environment are considered andwith the application of appropriate tools and techniques, a business strategyis formulated. The examination of the internal and external environments thatinform the strategy process comes from Peppard and Ward’s (2016) DigitalStrategy Model (Figure 1). Figure 1: Digital Strategy ModelThe right way to achieve strategic advantage frominformation systems/technology is concentrating on rethinking businessprocesses by analyzing current business issues, analyzing the environmentchanging and making information technology as a solution (Peppard & Ward,2016). 1.2  Understanding the Current Situation To understand the current situationof Gymshark, the identification of the strengths, challenges, issues anddisruptors to the business need to be considered. This report uses a SWOTanalysis to frame this before applying further tools and techniques toestablish a business strategy with an IS/IT strategy underpinning this. 1.2.1 Gymshark SWOT AnalysisA SWOT analysis is an examinationof an organization’s internal strengths and weaknesses, and externalopportunities for growth and improvement (Harrison, 2010). For this report, aSWOT analysis is conducted to identify areas in terms of both the businessenvironment and IS/IT environment in formulating a business strategy (Table 1).Table 1: SWOT Analysis of Gymshark1.2.2 Limitations of SWOT AnalysisWhile a SWOT analysis provides an overview of the current situation, it is limited from the point of view that two-sided factors are not considered (factors that could both be a strength and weakness). There is also no prioritisation of issues and it is not an in-depth analysis. Further analysis is needed to make decisions on business planning and strategy (Firth, 2017). 2.    External EnvironmentThe identification of external opportunities and potentialthreats is paramount in the success of the business moving forward. Thischapter explores these external factors that drive the development and revisionof business strategy (Peppard & Ward, 2016). In terms of the externalbusiness environment, factors that directly impact the business and factorsthat the company does not have control of but may need to adapt to areconsidered. The external IT/IS environment analysis examines current IT trendsthat could be used to innovate within the market which could provide the businesswith a competitive advantage.2.1 Porter’s Five ForcesThe inclusion of Porter’s five forces model in this reportis to gain an understanding of the competitive forces, their underlying causes,and to reveal the roots of an industry’s current profitability while providinga framework for anticipating and influencing competition over time (Porter,2008). For Gymshark, the identification of the forces that actagainst it is key to thriving and improving its market position. Following is afive forces model, which highlights the forces needed for consideration: Figure 2: Adapted from Porter (2008)2.1.1 Competitive RivalryWith the gym and sports apparel industry saturated, the competition is very high. With market leaders such as Nike, Adidas, and Under Armour taking the majority of the market share, it is necessary for smaller companies to seek out niches in the market for exploitation. With Gymshark focusing on gym specific apparel they are identifying a niche, but one that is becoming more and more popular with the entrance of new players. As the fastest growing company in the United Kingdom in 2016, Gymshark has built a solid foundation within the market but need to be aware of competition from rival companies who provide a similar product with similar branding.  2.1.2 Threats of New EntrantsIn terms of online, gym specific apparel retailers, thethreat of new entrants is moderate/high. The increase in social media as ameans of promoting a product in the last few years has already caused quite aninflux of new online gym clothing retailers. While it takes a significantamount of financial and human capital to entry the industry, the increase inexposure from social media influencers and vloggers has created a new avenuefor entrance. The sports apparel giants such as Nike and Adidas still dominatethe mass market, however, new entrants can identify niches in the market whichallow the gain particular segments of the market. 2.1.3 Threat of SubstitutionThere is a high threat of substitution in this industry asthe release of new, innovative products from competitors may draw the attentionof the customer. With this market being saturated, there is a lot of optionsavailable, where pricing, style, and fashion trends may mean the substitutionof one brand for another. Gymshark aims to produce apparel that reflects thedemands, trends, and personalities of people who actually use the gym(Gymshark, 2017), thus focusing on their consumers requirements and appropriatepricing, which, in turn, can offset some of the threat of substitution. 2.1.4 Power of CustomersCustomers have very high power in this industry as there isa wide variety of choice and the ability to simply find another comparableproduct online for a cheaper price. Therefore, it is vital for Gymshark tocreate products that the customers can identify with and build their brandassociation and recognition. This is the rationale by providing social mediainfluencers with their products to create perceived value based on association.2.1.5 Power of SuppliersIn the clothing industry, the power of the suppliers is oflow and insignificant force. This is because there is a large population ofsuppliers, which, in turn, reduces the impact of individual supplier demands.With apparel manufacture so saturated, if a supplier is demanding too much orincreasing prices they can easily be dispensed of and replaced without havingto consider loss of quality or increased price. 2.1.6 Limitations of Analysis Porter’s five forces model has limitations that arenecessary to acknowledge. The model does not link directly to possiblemanagement action, it appears as self-contained, without explicit links toPESTEL factors, and it oversimplifies value chains (Grundy, 2006). Therefore, itis necessary to complete supporting analysis to create a comprehensive businessstrategy. 2.2 Gymshark PESTLE AnalysisWhile Porter’s five forces model was used to identify wherepower lies in an industry in terms of competitors, suppliers, buyers, andsubstitutes, a PESTLE analysis provides a framework to examine a company’snon-controllable external factors that could potentially affect its operations.This examination can allow the company to react to by considering implicationsand minimising any future risks (Makos, 2014). The results of the PESTLEanalysis of Gymshark are delivered in table 2 following.Table 2: PESTLE Analysis2.1.2 PESTLE AnalysisThe political issue of Brexit can have a big effect onGymshark. As a UK based company, leaving the EU could have an impact onimporting supply from abroad, exporting goods to customers from around theworld, and the power of currency may be volatile which affects the market. Inrelation to this, strength of the economy influences the purchase of leisureitems such as gym apparel. Social factors such as the marketing of the brandthrough social media and social media influencers has a great impact on salesrevenue. Gymshark is an innovator in terms of sponsoring Youtubers and fitnessvloggers to promote their goods. As an online retailer of clothing, respect ofsupplier standards and awareness of competitor patents are of great importanceto Gymshark. The consideration of environmental factors can differentiateGymshark from other companies, and needs to be considered. Recyclable packagingand the use of eco-manufacturers could be considered to promote brand image. 2.1.3 Limitations of PESTLE AnalysisConsidering this is analysis of the external environment,the limitations of PESTLE analysis is that there are assumptions andpredictions made about external factors. The results of the analysis are alsosubjective as it is based on factors that can change every day (PESTLEAnalysis, 2016).2.2 IT Trends This section of the strategy process identifies technologytrends and opportunities for using IS/IT in new and innovative ways (Peppard& Ward, 2016). In analysing the external environment, Gymshark can gaininsights to what new technology could be used to either innovate anddifferentiate from competitors, or how current technology could be used in newways to improve operations/reduce costs. Current IT trends in relation to online apparel retailersare identified in the table below. Gymshark’s current use of aspects of theseIT trends, and opportunities for innovation and improvement are alsohighlighted in table 3.Table 3: IT Trends 3. Internal Environment This chapter outlines theapplication of tools and techniques to the internal business environment andIS/IT environment of Gymshark. While the analysis of the external environmentidentified factors that relate to the competition within the industry and theneeds of the customer in terms of both the business and IS/IT environment, theinternal environment analysis examines the information, systems and technologyneeds arising from the business strategy and the current activities of thebusiness. 3.1 Balanced Score Card and Critical Success FactorsThe balanced score card is atechnique of examining the performance of an organisation from four different perspectives,financial, customer, internal business, and innovation and learning. The BSCexplores the internal environment of an organisation. Kaplan and Norton (1979, p. 72)highlight that the BSC helps organisations answer the following four questions:How do customers view us? (Customer perspective)What must we improve at in terms of operations? (Internal perspective)Can we continue to innovate and create value? (Innovation and learning perspective)How can we improve finances for shareholders? (Financial perspective) To achieve explicit IT businessobjectives, a balanced scorecard can be used in combination with CriticalSuccess Factors (CSF). CSFs are “the limited number of areas in which results,if they are satisfactory, will ensure successful competitive performance forthe organization” (Rockart 1979, p. 85).Used in conjunction with eachother, these tools can build a framework that provides not only performancemeasurements, but aid planners to discover needs to be done and, in turn,measured (Mass PLC, 2017). In the following tables (4-7), aBSC and CSF analysis is undertaken for Gymshark. Along with this, IT/ISconsiderations are made for each of the perspectives to underpin theformulation of strategy. The balanced scorecard used in this report is adaptedfrom Kaplan and Norton (1979). 3.1.1 Financial Perspective Table 4: Financial Perspective B3.1.2 Customer Perspective Table 5: Customer Perspective BSC3.1.3 Internal Process Perspective Table 6: Internal Process Perspective BSC 3.1.4 Innovation and Learning PerspectiveTable 7: Innovation and Learning Perspective BSC3.1.5 Limitations of Balanced ScorecardBowen andMcDonagh (2011) highlight that while the balanced scorecard gives an overallview of the four areas for concern in business growth and development, thereareas do not give the whole perspective of the business. This is becauseinformation used in each of the perspectives is limited and not in-depth.Therefore, there is a need to support it with the use of other tools toformulate a complete business strategy. 3.2 Application Portfolio The application portfolio detailsthe required applications for the business to run, the current applicationsthat the business possesses, and potential applications that have beenidentified which can add value to Gymshark. The portfolio is categorised interms of the applications and their role in supporting current and futurebusiness strategy (Peppard & Ward, 2016). The potential applications thatare used in this portfolio are taken from the IS/IT considerations identifiedin the balanced scorecard analysis. Gymshark’s applications are split into fourcategories, strategic,high potential, key operational and support.Figure 3: Application Portfolio Matrix- adapted from Peppard & Ward (2016)Applications have a lifecycle andmove around the matrix over time (Kellerman & Lofgren, 2008). For Gymshark,proper management of these applications is necessary to ensure the transitionof the applications from one area of the matrix to another to ensure theycontinue to add value to the business. 4 Strategy ProposedThis chapter compiles the variousmethods of analysis of the internal and external business and IT/ISenvironments to formulate a business strategy, underpinned by support IT/ISstrategies. Through the analysis of theexternal environment, it was identified that not having a mobile app is an areaof weakness for Gymshark. This is supported by IT trends suggesting theimportance of m-commerce. This report recommends that to maintain competitivenessmoving forward, the addition of this to their application portfolio would be agood move for the future. Gymshark is a niche sports apparelbrand, as it focuses on products for gymgoers who want quality clothing thatfulfils their expectations. To keep their competitive advantage over companiesthat are similar in nature, is necessary for Gymshark to innovate with theirproducts and continue their strong social media marketing. To innovate withtheir products, the analysis conducted suggests that wearable technology withintheir products could be an area of high potential in terms of IS/ITapplications in the future. Another IS/IT application which is identified ashigh potential is chatbots/AI applications, which can improve customerexperience and aid customers in making purchases. The balanced scorecard analysis ofthe internal environment identifies IT/IS applications that can be implementedto improve the organisation from each of the four perspectives. In terms ofinternal processes, the supply chain could be improved through automaticordering when stock from supplier when stock of a products lowers to a certainlevel. This is something to consider as the company continues to grow. From thecustomer perspective, an online loyalty programme could be implemented toimprove customer retention. The innovation and learning perspective identifiesonline training for improvement of workforce and confirms the mobileapplication and artificial intelligence as areas for innovation. Finally, fromthe financial perspective, all the IT/IS applications that are identified cansupport the increase of revenue and strengthen the value of the business. 5 ConclusionThis report identifies challenges,issues, and disruptors to Gymshark, and through the use of the appropriatetools and techniques establishes a business strategy for the company movingforward, underpinned by IS/IT applications. The proposed strategy for thebusiness going forward emerges from the analysis of the external and internalbusiness and IS/IT environment. This is done to ensure that IS/IT strategy andplanning is integrated into the pattern of business strategic management(Peppard & Ward, 2016). Gymshark is a company that isgrowing fast and making a name for itself through innovative products andsponsoring social media influences who help grow the brand. To continue itsgrowth, the analysis of the business has revealed that it needs to use IT/ISstrategies to underpin its business strategies to maintain a competitiveadvantage over its immediate rivals and look to expand its market share torival the market leaders. 6. Reference ListBowen, R. & McDonagh, M. (2011) Weighing the pros and cons of balanced scorecards. Retrieved from: http://www.brighthub.com/office/finance/articles/70687.aspxFast Track (2016) Fast track 100 league table 2016. Retrieved from: http://www.fasttrack.co.uk/league-tables/fast-track-100/league-table/Firth, M. (2017) Limitations of SWOT analysis. Retrieved from: http://smallbusiness.chron.com/limitations-swot-analysis-58212.htmlGymshark (2017) About us. Retrieved from: https://www.gymshark.com/pages/about-usGrundy, T. (2006). Rethinking and reinventing Michael Porter’s five forces model. Strategic Change, 15(5), 213–229Harrison, J. P. (2010). Essentials of Strategic Planning in Healthcare. Chicago: Health Administration Press.Makos, J. (2014). Analyse PESTEL for monitoring your business or organization. Retrieved from: http://www.pestleanalysis.com/analyse-pestel/ Mass PLC (2017) KPI, CSF and the balanced scorecard. Retrieved from: http://www.mass-plc.com/blog/74/kpi-csf-and-the-balanced-scorecard Kaplan, R. S., & Norton, D. P. (1979). The balanced scorecard: Translating strategy into action. Harvard Business School PressKellerman, J., & Löfgren, P. (2008). Application portfolio management: A framework for application destiny determination. Infosys Technologies Limited. [Online] April. IT Universitz of Göteborg.PESTLE Analysis. (2015). What is PESTLE analysis? A tool for business analysis. Retrieved from: http://pestleanalysis.com/what-is-pestle-analysis/ Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78–93, 137. https://doi.org/ArticleRockart, J. F. (1979). Chief executives define their own data needs. Harvard Business Review, 57(2), 81–93. https://doi.org/ArticleSachdeva, K. (2016) Top 5 Big Data Retail Use Cases Powered By Apache Spark & Machine Learning Capabilities. Retrieved from: https://www.linkedin.com/pulse/top-5-big-data-retail-use-cases-powered-apache-spark-machine-karan/Ward, J., & Peppard, J. (2016). Strategic planning for information systems. (4th Ed.)New York: John Wiley & Sons, IncGet Help With Your EssayIf you need assistance with writing your essay, our professional essay writing service is here to help!Find out more