Argos, an extraordinary retailer in the United Kingdom, is operating 750 chain stores(Home Retail Group website,2010). And it is the unique retailer which is affirmed by customer’s feedback, quality of production and convenience as it sells more than 20,000 general commodities via the catalogue(Home Retail Group website,2010).
Customers can obtain the Argos catalogues, select the needed items to purchase them from the collect desk in branches or they are delivered to the residents’ home in a few hours. Moreover, it is possible that customers can choose an online or over the phone to complete the purchasing process.Argos provides services to more than 135 billion purchaser in store and receives 6 million orders in the UK from Internet and telephone(Home Retail Group website,2010). In general, there are approximate 11. 3 million residents having current Argos catalogues at home. (Argos website,2010). [pic] From 2005 to 2008, the sales of Argos increased remarkably from 3652 million to 4321 million pounds.
However, between 2008 and 2009, the sales indicated a slight decreasing from 4321 to 4328 million pounds(Home Retail group,2010).During the year, the sales and market share of electronic commodities climbed up, for example, a range of video games, flat panel TV and a range of products related to PC. In addition, the worst performance happened in the furniture and home-ware catalogues. (Home Retail Group website, 2010) KEY DEVELOPMENT Argos, which was established by Richard Tompkins in 1973, became a pioneering retailer and had established itself as the major player in British retail market recently(Argos website, 2010). The reason why Richard Tompkins set up the Argos is a new conception that people could purchase items from catalogue.At the begining of set up, Argos recruited 100 persons to work together and made 1 million pounds profit(Argos website,2010). Six years later, Argos was gained by BAT industries for more than 30 million pounds and then it was de-merged from parent company BAT industries in 1980(Argos website,2010) and referring to the development of Argos, during the first seven years, it operated just as other general retailers. Until the 1980, Argos set up its first own band Elizabeth Duke jewellery counter(Argos website,2010).
Meanwhile Argos achieved the opening share price of 203. pounds when it started to be listed on the London Stock Exchange in 1990(Argos website,2010). At the end of the 1990s, the number of chain stores in UK was 457 and turnover was 2 billion pounds(Argos website,2010).
Since 1998, Argos was acquired by Great Universal Stores plc (GUS), the scale of company had been expanded, because the GUS transfer ownership of 33 index stores to Argos(Home Retail Group website,2010). In 2006, the Home Retail Group plc, comparising Argos, Homebase and Financial sevies, is demerged from GUS and list on the London Stock Exchange.Under the GUS leadership, the sales revenues reached 1 billion pounds in 2008(Home Retail Group website, 2010) SWOT ANALYSIS As the leader in UK general merchandise market, at first sight, there are two significant strengths to Argos. First, Argos presents a good record of after sale service and supply chain management. For instance, the majority of things in Argos contain a thirty days money-back guarantee which means within thirty days, customers have the right to get the refund or to return the items which they do not enjoy(Argos,2010).Second, Argos keeps a great reputation and owns loyal customers base. Argos owning a great range of products and more than 20,000 products still keeps low price by decreasing the product cost.
And it is the Winner of customers Service Initiative Award(Argos,2010). There are two apparent weaknesses of Argos. First, although Argos created the unique method to minimize the distances between customers and production, this method has several obvious drawbacks which include the lack of physical visibility in store and limited customer interaction with product(Argos,2010).The shortages perhaps lead to the loss of customers, because they can choose other stores to get interaction with needed items. Moreover, Argos does not have current foreign market knowledge and experience.
Since Argos was established, it has shown as a competitive participant in the UK thus never entry international market. Because of the economic globalization, open business model is a effective method which should be considered by Argos(Investigate of Financial Express ). It is not difficult to point out opportunities for future growth. One opportunity is to increase its range of customers.Argos currently has a more than 750 chain stores in UK(Home Retail Group,2010). However, as the development of global economic, more and more customers are moving on-line especially Chinese.
This is a opportunity to exploit the market and development of economic zones in China to encourage Argos foreign operating experience. Furthermore, Argos was merged with Home Retail Group, British largest leading home and merchandiser retailer in 2006, it refers to that Argos gets more share capital in UK to run the business(Home retailer Group,2010).Just as evident, there are two main threats to Argos. The first one is the obstruction of entering the market in other countries. There are a large number of policies in other countries to restrict foreign business, because the government has a responsibility to protect the local industry by preventing international companies to segment local market share. Second, at the present time, the cost of supplies increases every year because of the financial crisis(Home Retail Group,2010).Nevertheless, Argos must keep the lower prices faced by severe competition from other retailers in UK. It means Argos should figure out another efficient strategy to solve the problem.
Evaluation Undoubtedly, Argos has had a good performance and play an vital role in British. The most obvious advantage of Argos is that the cost of the company still maintains lower than other enterprises. ,because Argos utilize the catalogue to sell the goods and the store area is much less than other retailers.
In addition, it presents a well qualified performance in the chain management.Nevertheless, the market share of Argos meets a lot of pressure not only because there are a large number of local competitors in this market, but also the financial crisis which commenced in 2007. Therefore, Argos still has some areas to improve which mainly exist in exploiting the real stores and international retailer market.
Synthetically, taking these factors into account, the group will likely to generate strong internal capital and financial flexibility in the next few years, Argos will occupy a larger market share and gain more profits.