Argos: Strategic and Environmental Analysis

1.0 Introduction

Business analysis is essential for running a business in a smooth way. There are different kinds of strategic tools that can be applied to analysing market trends and current business conditions. There are different kinds of business environments which have a huge impact on several factors such as social condition, technology, economic factors, natural forces and many others. Moreover, environment analysis is essential to develop the business and increase the sales rate of the company. Argos company is chosen for this assignment, and environmental analysis will be done on this company. This report also includes detailed information about the financial condition of the company. Several analytical tools will be used here to find out detailed information about the business. In addition to this, the strategic directions of the company will be addressed here in detail. A proper strategic management plan will be produced here for improving the business in a short time. Management theories will be applied here to making strategic plans for the business. Lastly, some suggestions will be prepared in the ending section of the report, which can be beneficial for this company. A summary will be provided in the end, which will be helpful to elaborate on the overall findings of the study.

2.0 Background

Argos is a well known retail company situated in the UK. This company serves its products in different areas of Republic Ireland and the UK. The CEO named Mike Coupe has taken a lot of strategies for developing the business in different regions of the world. The company was established in 1972, and from the past 47 years, this company supplies consumer goods to its customers. The parent company of this organisation is Sainsbury. So, this company is the subsidiary company of Sainsbury. According to the business reports of 2016, the revenue of this company is £4.1 billion, and the operating income was approximately £83.1 million. Reports of 2019 stated that this company has 883 shops in different regions of Ireland and the UK. This company belongs to the retail industry and is growing rapidly from the past few years. Moreover, this report elaborates the business environment of the company. Around a billion customers per annum visit their online website for purchasing goods. So, this company is one of the biggest retailers of the high street in the United Kingdom. In addition to this, the company also has some franchises in China. Varieties of products are sold by this company in different regions of the world. The customers are satisfied by the fastest delivery system of the company (argos.co.uk, 2020).

3.0 Problem identification

The current issue of this company is related to marketing and management policies. The level of competition is growing rapidly in the UK. Therefore, the company needs to follow some innovative strategies of management and marketing for giving tough competition to the other retailing companies. Therefore, the company lacks to provide best quality services to their employees. The revenue of this company has been decreasing for the past few years. Moreover, this is negatively affecting the financial condition of the business.

4.0 Findings and Analysis

Proper analysis of the business environment will be done here. In addition to this, a strategic management plan is included in this report.

4.1 Part A

PESTLE analysis

This is a critical business analytical tool which helps to analyse the external environment of the business. The impact of the external environment is too high on business performance. It can affect the financial condition of the business and also can change the business operations at any time. So it is essential to identify all the related factors which can affect the business condition and the functionalities taken by the company (Agwu, 2018). All the hierarchy of this company needs to understand the impact of environmental analysis for getting sustainable growth in the business.

Political factor

Political factors in an open country play an essential role in determining different kinds of factors which may impact the resources of Argos limited. This company includes a huge amount of resources related to gas and oil. Moreover, political stability is present in the UK, which helps to develop the business condition and improve the economy of the country. There is a race-related to the military invasion, which is impactful on the organisational performance. In addition to this, there is a negative impact of corruption which affects the regulations of gas and oil sectors (Aithal, 2016). The antitrust legalisation also has a huge effect on business policies. However, the wage-related legalisation and taxation policies are maintained, which helps to maintain the financial condition of the business. There are some mandatory staff benefits in the UK which help to satisfy the employees of the organisation. All the safety-related legalisation of this industry is maintained by the higher authority of the company for developing the business. Trading partners are favourable to the company, and the property of this company is intellectually protected by the government. Moreover, work policies of this industry are favourable to the company, and it actually helps to expand the business in different areas of the United Kingdom. Pricing regulations of the country is well maintained by the higher authority of this company. Moreover, it can be stated that the political condition of the country is favourable to the business, and it helps to provide growth and stability to this company.

Economical factor

Interest rates and an inflation rate of this country is not, which actually helps to develop the business and increase the profitability of this company. High skilled employees help to increase the productivity of the company. The labour cost is low, which helps to grow the business without any kind of labour-related issues (Akhmetshin et al. 2017). Every stage of the business cycle recovery and prosperity recession is well maintained by the business authority and its help to expand the business. In addition to this, there is a comparative advantage present in this company which helps to provide a high amount of revenue to the business. The unemployment rate is low in the UK, which helps to increase the productivity of the company. So in the case of higher productivity, the profitability rate actually increases rapidly. The education level is favourable to increase the economy of the country. There is a discretionary income which helps to increase the economic growth of the country.

Social factor

The skill level and demographic people of this country help to increase the profit rate of the company. The people living in the UK have a high level of professional skills and ability, which helps to improve the productivity of the company. People living in this country are concerned about their health and environmental conditions. In addition to this, they have a huge interest in leisure. There is an entrepreneurial spirit in the UK which has to be encouraged by the government (Aribawa, 2016). The government also motivates and encourages entrepreneurship. People believed in the culture, and the employees of this company strongly followed the cultural facts and principles while making deals with any customer or investors. The education level of these people is high, so they are properly aware of the business policies and other related services of the business.

Technological Factor

High level of technology is applied in several industries of the UK, which directly impacts on the business of Argos. The transportation industry uses modified technology which helps to develop the supply chain management of this company (Basole et al. 2016). It has a huge effect on the cost structure of the company, which helps to promote the business. In addition to this, social media marketing and e-commerce are growing, which helps to attract more customers towards the brand. Moreover, it can be stated that technological diffusion helps to enhance the reputation of the brand and increases the brand value.

Legal factor

Data protection-related laws are followed by the company authority for securing their valuable information from others. Intellectual property related legalisation is also followed by this company for maintaining the brand value in the market area. In addition to this, antitrust law and employment laws are well maintained by the company authority. E-Commerce related laws and customer protection-related rules are also well maintained by the customer service team for understanding customer needs (Deasy et al. 2016). The customer service team helps to provide high-quality customer service to all their valuable customers. Health and safety-related legalisation are also well maintained by the management team of this organisation for delivering high-quality services to all consumers.

Environmental factor

The company tries to provide eco-friendly packaging for maintaining environmental health. Laws related to climate and pollution are well maintained by the higher authority of this company. Ecological products and green packaging are produced by this company. The management team of this company are concerned about waste management policies and try to fulfil that by the implementation of different strategies (Fabus, 2018). Moreover, the higher authority of this company strongly believes that all the environmental policies need to be maintained for protecting the environment and attracting the customers towards the band.

SWOT analysis

Porter’s Five Forces

Threats of new entrants

The new entrance of the market brings high competition for Argos company. The company applies cheap pricing strategies for attracting customers. Innovation is required for developing services and products. It helps to reduce the impact of the threats of the company. The company spends some amount of their profit on research for reducing the risks of the company (Gürel and Tat, 2017). The company also provides new value to all the customers by giving tough competition to the new entrants off the market.

Bargaining power of the customers

This company e needs to buy some raw materials from multiple suppliers. The negotiating power of the suppliers can negatively impact the current financial condition of this company. Moreover, the management team needs to build a developed supply chain for improving the financial condition of the company (Hansell and Rafi, 2018). A proper experiment associated with designs of the products is essential, and it can be done by the application of different materials for making products. Moreover changing raw materials helps to reduce the prices, and the Company expenses can be reduced easily by applying this method.

Bargaining power of the buyer

The bargaining power of the customers can affect the business in a negative manner. It can reduce the profitability of the company, which affects the economic condition of the organisation. So rapid innovation with respect to new products is essential to enhance the quality of the products. In addition to this, customers can get a high amount of offers and discounts from this company.

Threats from substitute products

As their many similar products available in the market so sometimes it can create a negative impact on the services of this company (Lam and Wong, 2018). Similar kinds of services are provided by a large group of companies in the UK market, which actually increases the level of competition in the market. Show the management team needs to understand the demands and the code needs of the customer for fulfilling it. High quality of services needs to be given to all the customers. Oriented services need to be enhanced by the employees of this company.

Rivalry among existing players

Building sustainability helps to give high competition to all the competitors of the market. High level of competition forces this company to reduce its prices, and the overall profit rate of the company gradually decreases (Phadermrod et al. 2019). Moreover, the company needs to collaborate with all their competitors to analysing the target market and increasing the size of the market. For expanding the business in different areas, it is essential to identify the competitors and learn from their applied strategies towards the market.

4.2 Part B

The company strongly believes in innovation. Therefore the company tries to improve the technological capability for enhancing the testing services (Prajogo, 2016). The operating system of this company helps to improve the organisational learning performance management and knowledge management related functions. The HRM policies are also maintained by all the members of the management team.

Competitive advantages are properly analysed by the management team of this company for enhancing the services to satisfy all the customers of this company. In addition to these advantages of firm and country, specific policies are well maintained by the hierarchy of the company. This company follows demographic details while targeting the market. So show the profitability of this company is enhancing rapidly. All the CSR factors are well maintained by the higher authority. The company follows risk management, HR policies, and brand differentiation regulations for developing the business.

Appropriate growth platform

Argos can use ICT for monitoring the levels of the stock market, which can help to identify the market development easily. Low pricing techniques can be used by the management team to strongly build the financial condition (Vera-Baquero et al. 2016). The company can use social media for enhancing its marketing strategies. In addition to this telephone ordering catalogue ordering and online selling can be beneficial for this company to increase the sales rate. Moreover, the company needs to identify the property and the needs of the customers for satisfying them. All of these above-mentioned strategies could be beneficial for this company to provide successive growth in a short period of time.

Recommendations

There are some suggestions prepared in the below section which can be used for developing the business functions of this company.

Employees need to get proper training by the higher authority of this company. This will help to enhance the performance levels and the skills of the employees. The productivity of this company can be increased by giving proper training to all the staff members.

Modified technology news to be used by the company authority for enhancing the manufacturing process and increasing productivity.

Using the internet for marketing purposes can be beneficial for this company to attract more customers towards the brand. Brand value can be increased by using this method. The sales rate will be increased by developing marketing strategies.

It is essential to collect customer feedback for understanding their names and demands. High level of customer service needs to be provided by the customer service team of this company. It helps to satisfy the customers by giving them high-quality products and services.

Conclusion

This report clearly elaborates the detailed information of Argos and the current environment of business. Several business analytical tools are used here for identifying the current market position of this company. Moreover, it can be stated that the company applies different kinds of techniques to run the business in a smooth ve and satisfy all the customers by providing their needs. The high amount of customer satisfaction is obtained by providing their demands properly. A plan of strategic management is developed here, which can be beneficial to companies to increase their profitability within a short time. All the above-mentioned recommendations need to be implemented properly by the management team and other hierarchies of this company for achieving their goals. Moreover, there are different opportunities for this business which can be gained by implementing correct business tactics. However, application of correct business strategies is essential to achieve the goals of this business. Financial budgeting and implementation of proper marketing plans help to develop this business. The management team also needs to develop the operation management process for enhancing the productivity rate.

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