About Argos:
Argos is recognized and known as one of the largest and leading retailer with its market niche of digital products and services. Unlike any other digital retail stores in UK, the Argos’s strengths remains its product portfolio which consists of over 33,000 products of different brands and categories (i.e. technology, home & garden, baby & nursing, toys, health & beauty, sports and leisure, jewelry and watches, clothing, gifts and many more). In addition, the company remains competitive due to its unique business model and mediums of entertaining its customers which include its e-commerce website, retail stores, telephone as well as Argos TV, as one the most unique selling medium. Such diversified product portfolio as well as
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1.2 Aim:
The aim of this report is to analyze and evaluate the Australian business environment and determine the key macro environment factors (potential threats and opportunities) that are likely to influence Argos, when entered into Australia. In order to analyze the market environment, multiple analytical models and framework are applied i.e. PEST, Porter 5 Forces Model and Competitive Analysis. Following on, the report below also proposes the market entry mode, market growth as well as competitive strategy that may assist it to attain its corporate objectives.
1.3 Rationale:
The main reason behind the selection of Argos is the fact that it has been very successful in UK and growing at the constant rate. In addition, the application of multiple selling medium is another attractive strategy of Argos, which seems to be an attractive and unique feature when catering the international market.
1. Retail Industry Analysis – Australia:
2.1 PEST Analysis:
According to Narayan (2000) PEST analysis is one the most effective and applied strategic analysis tool that enable companies to scan and analyze the macro environment, in association with political, economical, social as well as technological contexts. The best part of PEST analysis is defined as its ability to conduct environmental scanning, determining key influencing factors as well as to strengthen the decision making as well as strategic management.
Political Context: While reviewing
As Aldi has already established itself as a large discount supermarket chain with over 10,000 stores in 18 different countries including Australia (2001), and holds a large market share in the grocery world due to its business culture and market leading initiatives. This report aims to provide the ALDI board of directors with:
PEST analysis will be able to be utilized to help detect trends in the external environment that will eventually discover their method into the competitive environment. It gives a relation between the general and competitive environments in that weak signals in the general
1.3 Physical Resources & Capabilities The ALDI brothers took over the family business of their parents in 1946. World wide expansion led to enormous growth. This comprises around 9800 stores (1000 to 1500 SQM each). The layout is simple with wide ails designed to refill shelves in the fastest, most convenient way {Brands, D. 2003}. They offer a small assortment of mainly fast-moving items (approximately 700 food – including a slim and organic line- and non food products). Small warehouses are located at the back of each store. Affiliates are equipped with limited technology such as intelligent cash systems high-end product concerning quality and price and bottle deposit machines. ALDI won the 2008 energy management award for great results in terms of cooling systems, illumination etc. Most stores have about 100 parking space and a shopping cart area near the entrance. ALDI has a long history which implies that they have gained great experience over the years. The location and layout of stores are designed to support fast and efficient supply and not especially aimed at customer needs. This is a weakness. Stores advantageously located as there are in convenient reach for consumers. Their product range is adapted to various consumer needs (organic, healthy living). The technological equipments are of high quality enabling fast operations at the checkout (ALDI’s staff are two times faster compared with other similar operations). This is
PEST analysis is used for to understand market growth or decline and to discover the position, potential and direction of a business. It is also defined as business measurement tool. PEST stands for Political,
Aldi brings a positive vibe to their customers for them to know that they are in good hands in the products they purchase. Recommendations Maintain the 'highest quality lower price' strategy as it could be considered as the sustainable competitive advantage for Aldi over other competitors. Even though usage of technology is not in the core values of Aldi it is necessary to make use of the technology, strategizing in order to be more competitive, diverse and to be unique. Even though Aldi remains the top of the mind grocery store in many parts in Australia they should look forward to advertising and publicity in order to attract more customers and remind the existing client tail about the 'low price highest quality strategy.
PEST is an acronym used for companies with in the political, economic, social and technological views. PEST allows companies to view and observe certain areas that might have been overlooked. The company I will be discussing the PEST analysis is Target. Target is a large scale company and is constantly changing in the industry. The political views of Target is that they must have an unbreakable bond with China due to majority of its products coming from that country. They must be aware and stray away from any conflicts because it can create a negative affect in the operation of Target. Also the company is altered by taxation, tariffs, cost, and trade restrictions especially when they're trying to broden outside the United States. The economic
Macro environment is crucial to the development of a company. All the external factors can have huge positive or negative influences on Travis Perkins plc, therefore a better understanding of the environment of the company is of supreme significance (Peng & Nunes, 2007). Among all the analysis tools, PEST analysis is one of the most effective tools to analyze the external environment of a company (Riley, 2012). This part will demonstrate PESTLE analysis of Travis Perkins plc below. The result of PESTLE analysis can be demonstrated in the following table 1.
Argos is part of Home Retail Group and is one of the largest retailers in UK serving customers through hundreds of stores across the country. Argos major core competency for competitive advantage is a successful multi-channel retailing strategy with strong project management office. However, some of the major findings of the study
It gives width and deep view of the whole environment from many different angles that one wants to check and keep a track of while contemplating on a certain idea and plan. All the aspects of this technique are crucial and important for any industry or business. Not only for just understanding the market, this analysis represents one of strategic management that not only defines what a company should do. It may be so, that the importance of each of the factors may be different to different kinds of industries, but it is imperative to any strategy a company wants to develop that they conduct the PESTLE analysis. This analysis also can help companies fix the goals and strategies. Without this analysis, the company may face different types of problem. For example, the company cannot deeper understand to external environment and may cause legal issue, weak strategic planning, economic problem, confuse the position of organization for future trends and
Also known as PEST, from here the analyses of PEST can help the company to see what will they be experiencing and expecting on how they will manage the market performance.
Since Argos displays goods primarily through the form of a catalogue, customers make their selection by looking through the offerings, then they check the availability of the item through the advanced computerized inventory system, pay for the item(s) and then either collect the goods themselves or have them delivered by Argos. The Internet has played an important role in the company’s development. In 1995 the Argos website was launched, and has been continuously developing its online services ever since. Today it is the second most visited website in the UK, with 400M visits per year (8). Since December 1999, Argos customers have been able to use the “Click & Collect” service via the website, or similarly, as of 2008, the “Text & Take Home” mobile service allows ordering via smartphone (9). Theses methods of including the customers in the over-all service helps keep staff levels low (see Exhibit 4) as there are no products actually on display in the stores, which therefore do not require time-consuming maintenance, costly displays, restocking, security etc. Not only that, but because all of the stock is held in stockrooms to which only staff have access, the stores themselves don’t require huge floor space, which saves the company from spending exorbitant sums of cash on large expensive retail properties.
The Internet Software and Services Industry in the Information Technology Sector includes companies developing and marketing internet software and/or providing internet services including online databases and interactive services, web address registration services, database construction, and internet design services. It does not include companies classified in the Internet Retail industry. An analysis of Google and Monster from both a financial stance and from within the Internet software and Services Industry; with use of a balanced scorecard and Porter’s Five and SWOT.
The PEST analysis is more of long-term analysis that can help determine how Political, Economical, Social, and Technological change will affect the performance and activities of a business.
Furthermore, they offer to the customer the experience to buy in a physical store, compared with Amazon that is one of the strongest competitor, there’s no doubt that the internet, and the mobile web in particular, have changed the way people shop, but there is strong evidence that consumers continue to value the experience of
In PEST analysis, we will look into what will be affect by the business environment. It includes political environment, economical environment, social environment and technological environment.