Strategic Management Plan for Argos Ltd: BTEC Higher National Diploma

This report presents a strategic management plan for Argos Ltd, a UK-based catalogue retailer, analyzing its internal and external environments to inform strategic decision-making. It employs PESTLE and SWOT analyses to evaluate the organization's resources, capabilities, and macro-environmental factors. Porter's Five Forces model is used to assess the competitive landscape, identifying existing and potential competitive advantages. The report explores various strategic directions, recommending appropriate growth platforms and strategies. It also suggests methods for monitoring the chosen strategies to ensure success. The analysis considers factors such as political and economic conditions, social trends, technological advancements, legal requirements, and environmental concerns. The report also highlights Argos Ltd's strengths, weaknesses, opportunities, and threats within the competitive retail market.

Strategic Management Plan

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Part A: An internal and external analysis that provides a platform for strategic decision-making. 3
1. PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources
and capabilities.............................................................................................................................3
2. Competitive environment analysis using Porter’s Five Forces model.....................................6
3. Identification and justification of the organisation’s existing and/or potential competitive
advantage.....................................................................................................................................7
4. Valid strategies and tactical objectives to achieve overall strategic objectives ......................8
Part B: On the basis of this analysis critically evaluate and justify strategic options for the
organisation: .................................................................................................................................9
1. Critical evaluation of the different types of strategic directions available to the organisation9
2. Justification and recommendation of the most appropriate growth platform/s and strategie 11
3. Evaluate ways and means by which the chosen strategy/ies can be monitored in order to
ensure success............................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Strategic management is the process of planning and analysing all the necessities
of an organization so to meet the aims, goals and objectives (Sullivan, Thomas and Rosano,
2018). The leader sets the vision what the company is need to achieve in the future. The report
will elaborate the strategic management plan of the Argos Ltd which was founded in 1972 by
Richard Tompkins and is named after Greek city of Argos which is a catalogue retailer. This
project will analyse the strength & weakness by conducting SWOT analysis and capabilities &
resources which will be evaluated by the PESTLE analysis. There are various internal and
external factors which affect the strategic decision-making of the organization. Further, the case
study will describe the competitiveness of the given organization by applying the Porter's five
forces model which will assist in identifying the existing and potential competitive advantage of
the Argos Ltd. It will discuss the tactical strategies to achieve the overall objectives. The report
will critically justify the different kind of strategic direction which are being available to the
quoted company. Further, the case study will recommend the most appropriate growth platform
and monitor the ways by which the given company's strategies will aid to ensure success in the
long run of the business.
MAIN BODY
Part A: An internal and external analysis that provides a platform for
strategic decision-making:
1. PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources and
capabilities
PESTLE analysis framework assist to understand the macro-environmental factors which
would assist the organization to improve the strategic management. There are several factors
which affect the company which are:
 Political: This factor plays a significant role in UK as the rules &
regulations, directives, norms, taxation strategies are more flexible for
businesses. To expand a corporate business this place is the most

promising one. The quoted company must be aware of political issue
which could impact the performance of the organization like backing out
of EU (Bentham, 2018). This would have a great emphasis and company
should mould strategies according to the change in the policies of the
government. Corruption within the departments had increased burden on
many organization.
 Economic: The another important factor which affect the strategies of the
Argos Ltd is the fiscal policy or condition of the country in which they are
operating. Despite the breakdown in 2009, UK has recovered from it and
was an economic powerhouse in Europe. Even the Covid-19 pandemic
didn't affect the businesses for longer (Ghadge and et.al., 2020). Despite
loosing jobs, country's per capita income didn't go down and people in the
country are willing to purchase resulting in the growth of the businesses.
 Social: This factor would cover the people living in the society at large.
UK's cost of living index of an individual's has dropped down significantly
which resulted in spending more on other items. While, immigration also
plays an important role increasing the use of different goods. The leader of
Argos Ltd penetrate new products which would result them in high
revenues (Rajendra and et.al., 2020). Habits and spending power of
customers are primarily considered to be the social elements.
 Technological: It is the most affecting factor for every business. UK has
adopted technology a long time ago which resulted in the benefit of
industries. The more the company's incorporate innovative technique, the
more they would witness growth. Argos Ltd has successfully embedded
all its operations via sustainable technology (Wu and Chang, 2020). As the
company is being acquired by Sainsbury's Group, Argos Ltd now get all
the technological advances because of the acquisition.
 Legal: It is one of the significant factor which could create a trouble for
the company by having a legal battle. The quoted company must be
complied with all the regulations which are related to the better
functioning of an organization. The business laws and federal laws with a

Brexit policy should be kept in mind while framing strategies (Clements
and et.al., 2021). Recent change in the labour code would affect the
organizational culture which more likely to frame policies in the favour of
employees.
 Environmental: Ecology is an integral part of our society. The
environment has a great influence on the company's sale as consumer are
more attracted to those business who are providing services or goods
keeping in mind preventing the environment (Hilton, 2018). The quoted
company should bring more policies to reduce the carbon emission and
climate change issues.
To understand the internal and external factors which impact the strategic management of
the given organization SWOT analysis model must be conducted to know the strengths &
weaknesses which address the internal factors and threats & opportunities which are the macro
challenges facing.
 Strengths: The quoted organization's biggest strength is the largest retailer in UK with
more than 800 offline stores as well as offering online services. It has a huge working
force which aids the company to reach around 18 million households in UK (Ibrahim and
Wang, 2019). In 2016, the company was acquired by Sainsbury's group and now is a
subsidiary of it which would provide more resources to expand more.
 Weaknesses: Competitive market is one of the weakness which bifurcate the market
share into different competitors. They were involved in various controversies such as
weekend working, pricing in Ireland and recent loss of legal battle (Ibrahim and Wang,
2019). The company has focused on traditional business practice and not open for
globalization resulting in lesser presence around the world.
 Threats: One of the biggest threat is the price war with the other retail businesses as they
also have better international brand image which provide them an edge over Argos Ltd.
The changing regulations and policies of the government has a bad impact. One of the
example was exiting the EU resulting in a drastic change (Hilton, 2018).
 Opportunities: The quoted company is now a part of Sainsbury's retail chain which
provide an opportunity to expand its online selling and by also reaching out international

market (Shahzadi, 2020). Becoming a part of Sainsbury's group expand the chance to
become market leader in homewares with the help of 2000 stores.
2. Competitive environment analysis using Porter’s Five Forces model
Porter's five force model identify and analyse the five competitive forces which would
help to shape the industry structure by changing the strategies to be competitive in the market
(Caballero-Morales, 2021). It would determine the competition in an industry which could
pinpoint the areas which required improvement to enhance the profitability. The forces are:
 Threat to market entry: The degree of threat is low in respect to the market entry
because Argos Ltd is the second largest retailer in the UK and for any aspiring retailer it
is difficult to enter into the industry. The quoted company in this regard is well positioned
to survive the competitive retailer due to the strong customer base.
 Power of suppliers: The degree of risk from the power of suppliers could be measured
from moderate to high due to the existence of many retail companies prevailing in the
market. Suppliers instigate the market completely by comparing the prices of different
retailers. However, Argos Ltd utilize its deep reservoirs to balance the suppliers in the
strong fragile market of retail.
 Threat of substitutes: This is the biggest threat while considering the substitute goods
and services from other retailers. Tesco and Asda retailers have the same pricing of the
products as well as offering great discounts than the Argos Ltd. Therefore, the degree of
risk is higher in case of substitutes.
 Power of buyers: The degree of risk is higher is regard to power of buyers because the
consumer is the king of the market and with the changing innovation & development
from the competitors end to better provide the experience to customers (Kim and Chun,
2018). The variety of option available to the buyers from different retailers created a
tough competition among the companies. For this Argos Ltd has launched various
products which are unique in nature such as Visiq, Aquarius, Pro Action etc.
 Rivalry: This is one of the biggest risk factor considering the competition as there are
number of retail companies which are operating and trying to expand its market in the
UK in near future. They are investing in new strategies and innovative technology
development for better online product platform. Therefore, the degree of threat while
considering the rivalry point is intensive as various methods are being used like

promotions, low prices, offers which could directly affect the profitability of the
companies.
3. Identification and justification of the organisation’s existing and/or potential competitive
advantage
There are following existing competitive advantage of the Argos Ltd which are:
 Better in-store experience: The paramount revenue of the quoted
company has been generated from the offline stores due to its large
number of outlets across UK. To offer seamless experience to the
customers Argos Ltd shifted from the traditional methods such as famous
laminated catalogues, queuing to pay, employees & warehouse staff old
style working to be exchanged or launched tablet devices, digital kiosk
machines to pay, portable devices which aids in better information
regarding the stock (Oripovich, 2022).
 Speed and convenience: The another existing benefit is by offering the
customers most convenient and fastest way. The quoted company allow
the click & collect with the additional feature of fast track resulting on the
same day delivery of the product. This attracts the customer by reducing
the time to wait.
 Appealing e-commerce site design: This is another advantage as many
users are dependent on the online shopping which the quoted company
considered and amend changes regarding that (Peng and et.al., 2020).
With the help of creative and alluring interface of the website and unique
features like stock visibility which provide information about the in-store
availability of the product. There are other key features which positively
impact the purchasing of the product.
 Emphasis on mobile app: Argos Ltd has designed a user-friendly site
which better align the physical and digital worlds. The mobile app connect
the two dots so the customers can easily switch to other devices with ease.

4. Valid strategies and tactical objectives to achieve overall strategic objectives
The main objective of Argo is to enhance their customer experience and to be the best
retail company in the market. However, in order to achieve this task, it is important for
organization to adopt for strategic tactics. The one of the most common strategy which can be
opt by Argos is growth strategy as it will contribute in increasing overall market share of
organization. Along with this, for growing the market size it can penetrate in international area
and collaborate with local store as it will help in increase the market size. Moreover, for
increasing the market growth the company can also opt for product differentiation such as there
should be various type of items so that customer can be attracted as well as increase the overall
sales of company (Tien, Phu and Chi, 2019). Although when organization offer variety of
product then it will contribute in reducing high competition as well as increase the revenue of
firm. In addition to this, growth strategy allows small business to grow into bigger company and
gain better competitive advantage through size, money and greater influence. Thus, it will help
company to survive the unpredictable change in organization and it allow in acquiring assets,
attract customer as well as drives business performance and profit.
Moreover, Argo can adopt for corporate level strategy as it is use to gain competitive
advantage through selecting best management style and combination of various industries or
product. It is normally expected to help company earn average profits and creates value for the
shareholders. Along with this, Argo can expand the business to increase profit and overall
growth as well as to maintain operations and functional unit to enhance stability (Moktadir,
Kumar Ali and et.al., 2020). Although Argo is facing high competition in the market area so it
can change cost leadership style such as it can lower down the price according to market trend.
This approach is very difficult to maintain due to changing market condition and businesses need
to re-evaluate costs at each step of business planning.
In addition to this, in order to attract customer Agro can make use of CSR policy and contributes
in development of society. The organization should make products user friendly so to capture
market share in effective manner (Fraser , 2019). Moreover, when company make use of CSR it
will make the product different from competitors. The organization need to make a proper
business plan so that it can compare past and current strategy as well as see the effectiveness of
the tactic. Along with this, it will be useful strategy to employ as it contributes in rapid
expansion of company as well as to determine future strategy. When an organization is facing

challenges circumstances part of strategic planning and it can be used to sell part of business as
well as to identify where the business face risk. The goal of this strategy is to get the
organization back in shape and ready to proceed with stability and growth. A key part of the
corporate strategic planning phase is to identify the corporate strategy components. The vision
and mission of the company should be clear as it helps in guiding firm for achieving task. The
allocation of resources also need to be handle properly in order to accomplish these goals. It
outlines the way in which company achieve strategic goal.
In addition to this, Argos can make use of international strategy as first approach most
businesses take with global expansion such as importing and exporting goods through
maintaining head offices in home country. Although Argo is growing so it need to invest in their
target markets. There is various model use by company such as transitional strategy as it will
help in coordinating with local store in international market (González- Rodríguez, Jiménez and
et.al.,2018). This type of organizational structure means that there is one brand and operation
centre takes decision regarding supply chain and management. Along with this, another tactic
like multi domestic can be used when company has different sales, product and marketing
strategies. So Argo can open their small brand on local state and make product according to taste
and preferences of customer. These type of strategy is used by Johansson and Johansson and it
helps in covering large area of markets
Part B: On the basis of this analysis critically evaluate and justify strategic
options for the organisation:
1. Critical evaluation of the different types of strategic directions available to the organisation
Strategy can be define as plan that helps the company in accomplish organizational goals in
limited frame of time. Along with in order to survive in international and local market it is
important for company to make use of right strategy (Rehman and Anwar, 2019). Argo has
been one of the biggest brand that deals in retail sector so it need to have good marketing
techniques in order to sustain in the competition. Moreover customer loyalty is very crucial and
competing on price will help to retain consumer and having good brand image helps in earning
good profit. Strategic direction refers to ideas or actions that allow greater consistency inn
strategy over time and it mainly contributes in accomplishing goals of its organizational
strategy. Furthermore, it also helps in uniting company strategies and provide greater stability

into the future and helps in analyzing resources and identifying how an company needs to be
operated so to find success.
There are various types of strategic direction that will help Argo to achieve their desired goals
effectively are mentioned below:
Mission: It established by company and it explain the purpose of operating in the market area as
well as it guided for meeting its goals. The mission of Argo is to be one of the best retail
company that customer trust and place where people love to work. The organization is putting
their customer first and trying to build infrastructure of store so that employees can work
properly as well as consumer can make use of different marketing channels to offer best
possible shopping experience. Thus, having mission allow Argos to work on the right
direction and allows for greater long term strategic direction that focuses on quality rather than
saving costs.
Along with this, another strategic direction is culture and it refers to employee attitudes
and behaviors within an company. Argo can expand their company in international market area
as it will help in hiring individual from different cultural background which will contribute in
increasing market share as well as enhancing employee engagement. Positive working
environment within company motivates workers to work hard and that lead in increasing the
productivity of organization in effective way (Silva and Nunes, 2022). Moreover, it has been
found that if Argo will have customer services then it can easily improve their experience and
solve their issues.
Values refer to a company fundamental beliefs that refer principles that are wrong and
right . It helps in guiding organization and motivate employee to work hard toward
accomplishing common goals. Argo usually follow business ethics like transparency of
communication, respect and integrity with customers and employees. Moreover, a strategic
direction that companies values help it move towards the achievement of its goal.
Grand strategy refers to long term strategy that include every approach and tool as well as
make better sense while implementing tactics. Argo can make use of growth strategy such as
expanding the business in international market as well as collaborating with local retail store as
it will help in increasing the market share and to enhance revenue (Barbosa, de Oliveira, and
et.al., 2018). Market penetration will allow Agro to reduce the high competition impact
through increasing the sales of existing products or services. It is one of the best way to attract

large customer from the competitors and it can be achieved through increase in promotion and
distribution or modest product refinements.
Another grand strategy that can be used by company is to launch new products or services in
new market areas as it will contribute in enhancing productivity of firm. Along with this,
customers are also attracted as the products are completely new in unknown market.
2. Justification and recommendation of the most appropriate growth platform/s and strategies
Ansoff Matrix
It has been consist of four factors that define the growth area for the company. Market Penetration: It is known a strategy that has been used by organization in order to
increase their market share in the current industry. Along with this, Argos can make use
of sales driven method for entering into new market area such as directly dealing with
customer, improving the supplier channels as well as keep their customer satisfied. This
strategy will allow organization to have sustainable growth in revenue. Market development: The organization has to make use of new markets channels for
entering into international markets or domestic area to increase their sale. Along with this
it will help in attracting large customer. Product development: For this strategy company has to make use of new features of the
current product and launch in existing market.
 Diversification: It is used when both the market and product has been new to the
company.
Thus, it is to best suggested for the company to adopt for market development strategy and it can
make use of digital channels for creating awareness.
There is various growth platform that has been available to Argos such as digital marketing
which is one of the most common trend that has been used by many firm. Along with this, it
helps in increasing the market share through raising brand awareness in the competitive market
area. Moreover, Argo can make use of SMM in which various social sites can be used by them in
order to share the details regarding the products and services offer by them (Kristinae, Wardana
Giantari and et.al., 2020). In addition to this, sites like Facebook and Instagram can be used by
the company in order to attract customer. In addition to this, there are various features of such
tools like setting the target customer range as well as live features through which organization

can interact with consumer and identify their taste and preferences. Along with this, social media
tools allow in knowing about the current market trend and shift in customer taste and preference.
All such information allow company to make the product according to consumer that result in
increasing overall sales. Moreover, social media is one of the most growing platform in business
and its use has been increased at time of pandemic.
The major advantage of this platform is that it helps in increasing brand awareness in the
market area and it is very cost effective method to be used to increase business visibility.
Although implementing this strategy will contribute in recognition the brand name of firm to
large customer. Each content that has been share or introduce to new network with audience and
helps to know about the tactics that is being used by competitors (Agustia, Muhammad and
Permatasari, 2020). Thus, sampling having social media page will benefit brand and with regular
use it can generate large consumer for organization. The another benefit of using social media as
growth platform is better satisfaction of customer as it networking and better communication
platform. In addition to this, creating a voice for organization through platforms helps in
increasing growth of firm. The customer appreciates when company ate feedback from them and
resolve their issues. It has been found that when company interact with customer on one to one
basis then it leads in increasing their loyalty and loyal customer that improve the brand image of
the firm. It is basically an opportunity for company to interact with customer and identify
whether audience are facing issues in services so SMM allows to address the matter quickly.
This method is very cost effective in nature and greater return on investment has been
recorded while making use of it. One of the most valuable benefit of social media is that it helps
in getting marketplace insight and which is one of the better ways to know about consumer.
Although by monitoring the activities there taste and opinions can be find out and it can act as
positively for generating company revenue (Bai, Cordeiro and Sarkis, 2020). Thus, it can be
states that SMM is a research tool that will contribute in gaining information that will aid
industry and lead large following. With the help of additional tool, the company can analyse
demographics of customer which will contribute in segmenting the content and identify which
type of content generate the most impressions. Moreover, these tools give company an ability to
measure conversion based on post on different social sites that lead in finding perfect
combination for increasing profit. Thus, by positing well written content on social sites will help