Business Environment of Argos in the Australian Market - QAB020C410H

This report provides a detailed analysis of Argos's potential expansion into the Australian market. It begins with an introduction outlining the scope of international expansion and the report's focus on Argos, a leading UK retail company, and its interest in the Australian market. The report then provides background information on Argos, including its operations, product range, and mission statement, as well as a comparison of the business environments in the UK and Australia. A key component of the report is the PESTEL analysis of the Australian business environment, covering political, economic, social, technological, ecological, and legal factors. Each factor is examined in terms of its current strengths, challenges, future prospects, and potential risks for Argos. The report explores the political stability and democratic structure of Australia, economic indicators such as service sector contributions and foreign investments, social factors including human development and wage growth, technological advancements like broadband services, and ecological considerations such as environmental policies and climate change impacts. The report concludes with a business scenario outlining the opportunities and threats associated with Argos's expansion and considers market attractiveness using Porter's Five Forces. Finally, the report offers recommendations for Argos's market entry strategy into Australia.

Argos as a subsidiary of
Sansburys enter the
Australian Market

Table of Contents.
1 INTRODUCTION.............................................................................................................................3
2 Background of Argos....................................................................................................................3
3 Business environment in Australia analysis..................................................................................4
4 business scenario...........................................................................................................................7
5 CONCLUSION.................................................................................................................................9
7 REFERENCES................................................................................................................................11

1 INTRODUCTION
The planned expansion of activities of business into another countries or on the several regions of
the world is called international expansion. In this report it has been discussed a leading retail
company of UK which is willing to expand its business in Australia. Thus, this report described
about the background of the company Argos, environment of business in UK and Australia,
PESTEL analysis of Argos as well as the various opportunities and threats associated with the
business expansion in Australia for the company Argos (Kauškale and Geipele, 2016).
2 Background of Argos.
The company Argos is one of the largest as well as leading retailing company of United Kingdom
which deals in both food and non-food commodities. This organization of retail business gives it
services in United Kingdom as well as Republic of Ireland. In total Argos has 233 order collection
points as well as 883 physical stores. More over, along with in-stores services Argos is also giving
its services in online market. This online appearance of Argos gives the company a great
opportunity to provide a wide range of products, with an extent of around 60000 ranges of products
from various sectors of industry such as gifts, watches, jewellery, health & beauty, clothing, sports
& leisure, toys, baby & nursery, home & garden as well as technology related products. The mission
statement of Argos company is to serve the customer with the product or service which is best in
value for money, as well as the company also tends to provide the best in class shopping
experiences. This is the unique sales and marketing strategy used by the company in order to obtain
the great revenue in the market place (Sánchez Quintero, 2019).
Background of business environment in UK and Australia
The background of business environment of Australia can describe as Australia is a county which is
having a very strong democracy. But even though having strong democracy, Australia is critically
suffering from the problem of asylum seekers & some issues related to humanitarian. Thus, this
continued to plague Australia.
More over, the contrary is benefited by several investors from the overseas within the years, this
made the country strong in terms of foreign investments. But, the contrary has suffered from the
inefficiencies in the mining sector even though having the good strength in foreign investments. The
Australian currency is equivalent to 0.55 GBP according to current rate of exchange, which tends to
attract various foreign investors to invest in the country.
One of the another factor of concern while considering the background of business environment of
Australia is the labour of the contrary has low growth in wages, even though in the contrary the
country has high values of human development.
The country facilitates its residential with the service of national broadband network. Which

provides a very high speed broad band services to the people of Australia. Although having such
facilitates of high speed broad bands services but the company lags in expenditure on research and
developments.
Thus, overall the performance of business environment in Australia is strong, but the only threat
posses by this contrary, which could decline business performance in it is the risks of drought.
Which is a very critical issue of concern (Sánchez Quintero, 2019).
The background of business environment of UK can be explained as UK is multi cultural contrary,
the people of the country prefers to give high values to the privacy. Thus, the people from foreign
countries tends to adapt British culture and tries to make valuable connection with the people of
Britain. Business Partners from foreign country finds UK as very polite. As the residents of UK
does not openly criticise or complains openly in public, moreover the people tend to give the most
appropriate and relevant feedback based on their self experience of the product or service used by
them without any hesitation. Thus, this facilitates the business owners in getting lines and honest
reviews from their consumers. It is the fact that every business owner want to listen the clear
message of feedback from their consumers, therefore, UK provides the rooms for no assumptions as
well as no hidden meaning is misinterpreted. This shows the sincerity in the culture of UK which
facilitate in the performance of business in UK.
One of the another factor of business environment of UK is, the people of UK has very high
standards of education, almost majority of public has acquired a degree equal to high school
diploma. This shows the that on the terms of education the performance of business environment in
UK is very strong.
Transportation is the another factor which influences the business environment in UK as UK has a
very integrated transportation system, which is the combination of metro systems, trams, rail
networks along with the facilities of taxies and buses.
3 Business environment in Australia analysis
PESTEL analysis of business environment in Australia
3.1 Political environment
Australia is a democratic country. The country strongly pays focus on the freedom to express,
associate as well as ability for free media. Even being a democratic country, Australian faces the
issue related to humanitarian organization where the basic right essential for human is denied such a
protection to asylum seeker, which could be seen as the future risk to the organization seeking their
expansion in Australia.
Another political factor that may influence the Argos company in its expansion in Australia is when
seeing the relation of Australia with other countries, as Australia has a very good terms of

relationship with most of the countries but the relationship with Australia is still remained the same
as earlier.
For encouraging the foreign investors to invest in the country the present government of Australia
has signed two agreements of partnerships which tell that the trading between China and Japan will
be free.
Thus, for accelerating the economic growth as well as the political relationships with the majorly
empowered nations the country has done the partnership agreements with the other nations in order
to enhance the growth of the country. Thus, for acceleration in GDP the country has become the
biggest exporter to China, which eventually consists of one third of the GDP of the country (Shuan
and et.al, 2017).
3.2 Economic environment
Economic environment in concern to business performances states that the most important
contributors in Australian economy is its service sector, and more particularly the countries
financial services. The people associated with the corporate services are much more than people
associating with mining, fishing, forestry or agricultural. Thus, according to the latest statistics the
contribution of service sector is much higher in the GDP of the country.
One of the benefit of expanding business in Australia is, it is an open county with the high foreign
direct investments among the members of the OECD states. Over the last 25 years the country has
shown the growth in its economy, transparency in its legal system, transparency, stability as well as
in the economic liberation of the country. Thus, due to high level of investments from foreign
countries will tends to increase in creation of jobs for the individuals as well as it will increase the
output of Australians.
The economy of Australia is best suited for business performances as the county has improved
terms of trading policies. More over, the contrary has improved its export, which eventually
benefited the economy of the country. The domestic demands of the public has also been increased
due to growth in employments as well as improvement in the incomes of the individuals of the
country. Additionally, the labour market has also been increased due to contribution of women as
well as older workforces.
Thus, these economic factors facilitate the organisation which tends to do business within
Australian boundaries (Baumgartner and McMahon, 2019).
3.3 Social environment
The social analysation of the country on the terms of business expansion suggests that Australia
performed well in terms of development of human beings. But in contrast the Australian worker
always has fear of threat which is related to poor growth in terms of wages. One of the challenge
faced by the government of Australia on terms of social environment is the low growth in the

population rates as well as the increase in the average age of the individuals of the population of the
country.
According to the current studies the population of the country has the better living conditions,
which eventually brings the increase in development of humans.
On various indicators, the country has performed well compared to the average of OCED nations,
such as higher income and wealth of the population, higher in jobs & earnings, subjective well-
being, personal security, environmental quality, civil engagements and governances, social
connection, educations & skills, health status, housing as well as work & life balances.
Moreover, according to the latest data of OECD the county has the very good education structure,
which will facilitate the companies in getting local skilled workers very easily.
Thus, this show for Argos to expand its business in Australia, the social points of concern will
facilitate the organisation to do its operations beneficially (Sánchez Quintero, 2019).
3.4 Technological environment
By the end of this decade, the country has the provision of bring a very high speed broadband
service which would aim to provide to internet to Australian businesses, schools and homes through
optical fibre cables, fixed wireless connectivity as well as through the satellite technologies. Till
now Australians faces the problem of low performances in terms of innovation, as the country has
very low number of science professional or graduates. More over, the country also lacks a healthy
collaboration among the firms operating there. The lack of collaboration is the critical topic of
concern as it stuck the progress in innovations by the companies . Thus, there must be some policies
to educate the individual toward sharing knowledge and to collaborate the work whenever possible.
Thus, this is the strength of the county which attracts the foreign investors to invest in the country
as the county is providing the national broadband service. As the company Argos has online
presence too thus, this will facilitate the company on its expansion in Australia, as the country if
providing a very high speed broadband services for the public of the country.
Thus, on the technological aspect of the country for the business progress a company expecting to
establish in Australia would definitely get the success (Gómez Arcila and Buitrago Henao, 2019).
3.5 Ecological environment
The country has proved to be on the correct terms of environmental performance according to the
recent evidences of environmental performance index. Due to the rising pollution in the economy
the country has witnessed the evidence of rising global warming as well as changes in the climate of
the country. Due to such horrible situations the country has faced the risks of conditions of drought.
Form the business prospective the country Australia shows the strong environmental performances
as the country has several strong environment policies which ensure the company willing to extent
in this country has to continuously keeps a check that whether it is harming the environment.

The composition of energy consumptions is been increased in the country by several percentages.
The country is using concepts to make use usage of renewable sources of energy. Therefore, the
government of the country is establishing several schemes which made the usage of renewable
sources of energy mandatory for companies such use of solar plants for electricity generation.
If there will be more people in the economy then there would be more business. And the business
will be increased by encouraging more tourism in the country. Since the country is very much
capable of attracting tourist, this would give additive benefit to the organization to in generating
huge revenue (Groucutt and Hopkins, 2015).
3.6 Legal environment
Australia has a very strong business environment, as it is among the worlds most open economy by
the OECD. The legal aspect of Australia can be demonstrated as according to world bank business
index of 2018 showed that the country was ranked as the 14th country among the 190 countries in
terms of effective business environment.
One of the another factor of legal analysation for business in Australia is the country has very low
levels of corruption, which ultimately facilitate the organization for working successfully but on the
other hand the terms of investor protection in the country is very low which shows that there exists
a fear that the investor of the business fear that it will have the least protections.
The legal analysation of Australia shows that the country has very strong business environment such
the days required in starting a company in Australia in 2.5 while the average of OECD is 8.5, which
is comparability much higher than that of Australia. Moreover, the country was ranked as the fifth
freest country of the world, as well as it posses almost all the measure of economic freedom.
Strong legal right or the strongest among the OECD nations. Thus, in the business scenario this
aspect protects borrower and the lander by laws such as bankruptcy as well as collateral. Thus, this
facilitates lending (Kauškale and Geipele, 2016).
4 business scenario
4.1 Opportunities and threats
The various opportunities and threats are described below
Opportunities
There are various opportunities as well as possible improvements that Argos can practise in order to
increase its productivity. An improved version of stock ordering as well as restocking system can be
implemented by the organization. The organization has the provision of great technology which will
facilitate the assistants of stock room in to automatically guide the assistants in knowing the correct
location where the product is required (Rajagopalan and Kelley, 2017).
More over the company has the opportunity to expand its business towards the gaming sector. As

the company has its least appearance in the sector of games. Thus, the company can open its centre
for gaming like Game stations which would facilitate the company in increasing its sales towards
games. There fore, this will ultimately facilitate the company in increasing its sales and increase in
revenue along with the generation of larger share in the gaming market.
Good relations with the other nations may facilitate the organization for doing its business such as
exporting of products. Moreover, the creation of new enterprises will tends to give job to various
jobless individuals of Australia.
Strong legal rights as well as low tax wedges will create various opportunities for the company in
Australia.
Threats
The various threat associated with expansion in Australia are
The growth in the rate of crime is increasing day by day, which is the biggest threat that the
organization may face in terms of expanding in Australia. More over, protection of minority
investors is to an issue threat for the organization. The company may face the fear of expansion as
Australians has the low spending on level of research and development. Demogrphic challenges is
always an issue of concern which tends to provide treat to company expecting to expand in
Australia. The company may has to face high rates of disparity of income. Lack of collaborations
within the firms as well as low of students opting for science and engineering is one of the threat
which the corporation may face in Australia (MOYA OLIVER, 2018).
According to the current reports of increase in rate of unemployment, increase in budget deficits &
public debts as well as inefficiencies in the mining sector is the economical threat faced by
Australia.
The several political threats that the company Argos may face in Australia is the issues or the future
risks related to asylum seekers as well as humanitarian issues, persistence of political instability as
well as strained relations with the country Indonesia is the threats the business may face while
expected to expand in Australia.
4.2 Market attractiveness porters five force
The porters five forces are
Competitive rivalry
While expansion the company may face the competitive rivalry due to the presence of local
companies.
Bargaining power of the supplier
While hiring the various local service fot the executions of business the company may face a threat
by the bargaining powers of the supplier of the service (Moncal and et.al, 2019).

Bargaining power of the customer
The organization may face the issue of bargaining powers of the customer. As for the expanded
company it is fear of concern what will be the bargaining nature of the consumers of the country.
Threat of new entrants
New entrants threat is always a critical issue which is needed to be considered both for freshly
established businesses and the organizations serving since long time ago. New entrant always tend
to increase the competitions for the previously established businesses.
Threat of substitute products and services.
Most of the time the consumer may get the substitute of the product which might bring the fear of
concern for organization, as their monopoly of selling of product has been broke down.
5 CONCLUSION
This report can be concluded as, Argos company is one of the largest as well as leading retailing
company of United Kingdom which deals in both food and non-food commodities. This
organization of retail business gives it services in United Kingdom as well as Republic of Ireland.
In total Argos has several order collection points as well as various physical stores. More over,
along with in-stores services Argos is also giving its services in online market. This online
appearance of Argos gives the company a great opportunity to provide a wide range of products,
with an extent of around thousands of products from various sectors of industry such as gifts,
watches, jewellery, health & beauty, clothing, sports & leisure, toys, baby & nursery, home &
garden as well as technology related products. The mission statement of Argos company is to serve
the customer with the product or service which is best in value for money, as well as the company
also tends to provide the best in class shopping experiences. This is the unique sales and marketing
strategy used by the company in order to obtain the great revenue in the market place.
Thus, the company is willing to expand its business in Australian market in order to increase its sale
and overall revenue. According to several assumptions as well as analysation, the country Australia
is best suited for the expansion of Argos in the country (Carbonell Guerrero and Rodríguez Pérez,
2018).

7 REFERENCES
Books and journals
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de la Unidad de Negocio de Desarrollo Urbano con el direccionamiento estratégico de
Grupo Argos (Master's thesis, Universidad del Norte).
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sucursal por fuera de el Valle de Aburrá: caso AHINCO SAS (Master's thesis, Universidad
EAFIT).
Groucutt, J. and Hopkins, C., 2015. Marketing. Macmillan International Higher Education.
Kauškale, L. and Geipele, I., 2016. Economic and social sustainability of real estate market and
problems of economic development–a historical overview. Baltic Journal of Real Estate
Economics and Construction Management, 4(1), pp.6-31.
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bone marrow stem cells improve calvarial bone regeneration in rats. Materials Science and
Engineering: C, 105, p.110128.
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ubicado en la Provincia de Sabana Centro y sus alrededores (Bachelor's thesis, Universidad
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Shuan and et.al, 2017. Valorización Cementos Pacasmayo SAA.