Argos E-Commerce: Market Analysis and Competitive Advantage Strategies

This report provides a comprehensive analysis of Argos' e-commerce operations, focusing on its market positioning, competitive strengths, and growth strategies. It begins with an introduction that outlines the report's objectives, which include identifying Argos' market position and competitive advantages within the retail industry. The report then provides a company overview, highlighting Argos' presence as a British catalogue company with both physical and online operations. A SWOT analysis is presented to evaluate Argos' strengths, weaknesses, opportunities, and threats. The report also applies Porter's Five Forces model to analyze industry competitiveness, the threat of substitutes, buyer and supplier power, and barriers to entry. Furthermore, a value chain analysis is conducted to assess Argos' primary and support activities, including inbound logistics, operations, marketing, procurement, and technology development. The conclusion summarizes the key findings and emphasizes the importance of brand and product value in the current market. This analysis aims to provide a detailed understanding of Argos' e-commerce strategies and its position within the competitive landscape.

ARGOS E-COMMERCE

TABLE OF CONTENTS
INTRODUCTION..............................................................................................................1
CONCLUSION................................................................................................................. 7
REFERENCES.................................................................................................................8

INTRODUCTION
The report has focus on identifying the way Agros Ltd. has positioned itself in the
market. It also emphasizes on identifying the competitive strength of organisation. Purpose of the
project is to recognise various factors that has allowed company to differentiate itself from other
firms dealing in same industry. It is also concerned with analysing the growth of company in last
few years. The study will include various models such as Pestle and Swot analysis for identifying
the position of Agros limited in market. It will highlight the strategies adopted by an enterprise
for gaining competitive advantages as well.
Company Overview
Agros
Ltd. is recognised as a British catalogue company dealing in retail industry. The organisation is
operating in the UK. Organisation has both physical and online presence which has supported the
firm in reaching at a wide number of customers and providing them goods or services. Agros is
also recognised as high street retailer in the UK. The company offers consumer products. In
April 2016, Argos' parent Home Retail Group agreed to a £1.4 billion takeover by the UK
supermarket chain Sainsbury's. Business entity also has stores located in the international
market. The factors that make organisation different from other companies dealing in same
sector is that Catalogues are complemented by seasonal sales flyers, offering non-catalogue lines
and price reductions on existing deals. Argos company has approximately 28564 talented and
skilled employees who have supported organisation in expanding the business operations. Agros
Ltd has to face competition within companies like Tesco and Sainsbury. Argos company targets
those customers who look for purchasing Items multi-channel - in-store, can be ordered online or
over the telephone (Chaffey, 2015).
Mission of the organisation is to deliver high quality of products or services to customers
at reasonable price. Vision of Argos company is to achieve leading position in the market.
Business operations
Organisation has in store shopping procedure which includes completing a small order
form with catalogue numbers of desired items. Argos provides red pencils in stores for this
purpose (Allen and et.al, 2017).
Home store

The Argos company has introduced branded and attractive stores which have allowed
firm to influence people to buy a particular brand. It has enabled company to increase the sales
and profitability.
Agros compare
Argos company also provides financial services to its clients. Organisation also operates
a financial price comparison website (Wiethaus and Chisholm, 2017).
Agos TV
In 2011, Argos company has introduced sky and other online channel. Company believes
in providing innovative products or services to customers. This factor has supported business
entity in developing and maintaining a healthy relationship with clients.
The organisation has focus on delivering standard quality of products or services to
consumers which has allowed firm to establish a leading position in market. It has also supported
an enterprise in gaining customer loyalty.
Swot Analysis
Strengths
Online presence has supported Argos Ltd in
reaching to a wide range of customers (Lodder
and Murray, 2017).
Argos gain the position of the largest general
product retailer in UK.
Argos Ltd. has its own famous brand.
Team of highly skilled and talented workers.
Weaknesses
The company has to face some controversies
due to ineffective human resource management
policies.
Organisation is operating in extremely tough
competitive market segment.
Low market share and slow growth rate.
Few stores in the global market.
Opportunities
Argos Ltd. has an opportunity to expand its
business operations.
Company has a chance to enter in the new
market.
It can open or establish more stores
internationally.
Threats
Increase in level and intensity of competition
(Xiao, 2017).
Price war in the industry may have an adverse
effect on the firm’s profitability and sales.
Change in macro environmental factors have
direct impact on company’s growth and

success.
Porters five force Model
The unique idea developed by Agros Ltd that people could purchase goods from his
Green Shield Gift House with cash rather than savings stamps has supported business entity in
achieving success and fostering growth (Lodder and Murray, 2017). Argos is unique amongst
major retailers in the UK because its primary means of displaying goods to customers is via a
catalogue. Organisation offers wide range of consumer laptop, personal computers and other
peripherals. It also offers advice and other services.
Industry competitors
The several factors that are considered in Porters five force model are variable cost,
capacity, pricing, differentiation, organisation behaviour, business growth etc. Tesco, Asda and
Sainsbury are the major competitors of Argos. In retail industry, the rivalry of competitors is
very high. Due to strong rivalry there is slow growth in the demand of product or service in the
industry (Lasisi, McCullen and Turner, 2016). The changes in pricing policies by Argos
competitors have direct effect on firm profitability and sales. Competitors adopt the different
strategies to increase their sales and profit margin which has direct impact on firm business
decisions. As the switching cost is low for customers, they can easily switch to other brand.
Threat of substitute
Argos competitors are Tesco, Asda rivalry between companies should drive profits to
zero. Competitors of Argos are giant and strong they have high potential to introduce substitute
product in order to increase competition in the market. When there is rise in prices of specific
product, it provides consumer a chance to switch to substitute goods. The buyer has to incur one
time switching cost. Threat of the substitute product is very high. It is required by cited venture
to produce unique product. As this will aid firm in reducing the threat of substitute good (Saghiri
and et.al., 2017). It will also support organisation in increasing more number of customers.
Bargaining power of buyer
In retail industry, as there are large of customers in the market, bargaining power of
buyer is weak. But as there are large number of companies and switching cost for customer is
low, therefore the bargaining power of client can be high./If buyer get same product at low price.

Suppliers Power
The bargaining power of supplier is low. As there are many suppliers in the industry,
switching cost for firm is low. As Argos has good brand reputation, supplier in the industry wish
to develop and maintain contractual relationship with such big organisation. In fact, business
entity has high power to conduct negotiation with suppliers and demand for additional discounts
or benefits (Gearin and et.al., 2017).
Barriers to entry
As there are already many big companies who has capture big market share and has built
positive impression on consumers. It will be difficult for new and small companies to establish
position in the industry. Argos have the advantage of economies of scale which implies that the
more scale economies, the less threat of the entry in that if entrant cannot quickly get large
market share.
Bargaining power of competitors
The retail industry is growing at rapid speed, market dominance of the larger players,
with greater store size, increased retailer concentration, and the utilisation of a range of formats,
which are now prominent characteristics of the sector.
By developing the large supply chain network Argos is taking high initiative to interact
directly with consumer. As this strategy is supporting company in identifying the needs of
customers and fulfilling the same (Samoilenko, 2016).
Competitive rivalry
As Argos operating in retail industry which has stiff competition where both new and
existing organisation are trying to blend that creates a more intensified competition. It is required
by manager in cited venture to develop effective marketing strategy. As, this will support
business entity in gaining competitive advantage in market.
Cited venture can reduce the threat of competition by developing new product or by
entering into new market segment. Product differentiation strategy has supported business entity
in differentiating its products from that of competitors.
The other factor that has enabled cited venture to win over its competitors such as
Amazon are quick or same day delivery of product or services. Argos multi-channel business
model is clearly making an impression on customers. It has been identified that Argos Ltd. is the

first organisation who has introduced mobile commerce and has generated the highest revenue
from the same. The business entity dedication towards its channel has enabled organisation to
align digital as well as physical world. It has designed unique applications in order to allow
consumer or buyer to switch from one device to other (Bălan, 2014).
The cited venture uses updated as well as geo- technology in order to reach wide range of
customer.
Value Chain Analysis
A value chain is defined as chain or series of operations that is performed by organisation
in order to deliver valuable and quality services or products to consumers. The objective of
Argos is to deliver maximum value to customer at minimum cost to customers.
The primary activities of company includes inbound logistics, operations and outbound
logistics, marketing as well as sales. Support activities are business infrastructure, human
resource, management, technology development and Procurement (PARKER and et.al., 2015).
Inbound logistics
Argos has good relationship with supplier which has supported business entity in
maintaining the quality of product or services. The cited venture has adopted back ward vertical
integration strategy. According to this plan, company has replaced its existing supplier. This step
has been taken by cited venture for two reason that is for minimising the cost of production and
for quality assurance.
Marketing strategies
For the marketing and management of strategies analysis of value chain used as a tool to
find and analyse the internal firms as the activities are most valuable. Holistic marketing are
opted by most of the companies and organisations in today. As, the role of marketing gets
commenced from the beginning till the end of the product life. It involves the vendors, suppliers,
distributors, as well as ATL and BTL activities. This activities build awareness and confidence
till the end of the product. Also, this create a large difference for overall value of the product
(McKechnie and Nath, 2016).
Procurement
There is not much difference between inbound logistics and procurement. Comparison to
inbound it deals with the transportation process whereas, complete procedures of bringing raw

materials are known for procurement. Also, they manage the process of inbound logistics and
while negotiating the vendors.
Technology development
Development of technological factors and advancement enhance and boost the life of the
products and services. Also, with the help of understanding procurement behind the perishable
goods and services can be well determined and easily known about the procedures. As the
perishable goods have to reach with in completion of day. Hence, the advancement in technology
helps in terms of reaching the goods and services whether it is perishable or not.
Operations
The determination of speed and quality is taken for concern while converting the raw
material into finished products. Increase in the speed will definitely increase in the quality of
output (Nurmela, 2016). The quality is determined as the important factor, as organisation cannot
be able to succeed if the speed is not raised and supply doesn't meet the terms of demand. Also,
supply is determined by output.
Human resource management
The important factor or role is played by department of human resource management, by
selecting and recruiting the right people at the right place and at right time. As the job is quite
tough hence, there is raised in competition all over world. The effective organisation has to
concentrate on marketing, procurement, transportation, accounts and finance and many more
departments with the help of human resources as they recruit effective and skilled employees and
the need of trainings and conduct are performed by this department.
CONCLUSION
More concentration is paid by consumers in recent days are on brands and the products
that are concerned with brand. With the best price for the best brands are expected by consumers
to get the products. By maintaining the margin for the product the porter's generic value chain
has been detailed in this report. The meaning of value chain can be defined as the process of
activities that are taken place in the organisation for meeting the successfully rendering of
valuable product in the market. With the help of SWOT analysis the business operations and
comparison of Argos and Tesco are detailed in this report.

REFERENCES
Books and Journals
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Bălan, C., 2014. Dave CHAFFEY, Digital Business and E-commerce Management: Strategy,
Implementation and Practice. Management & Marketing. 9(3). p.379.
Chaffey, D., 2015. Digital business and E-commerce management. Pearson Education Limited.
Gearin, P .J., and et.al., 2017. Migration patterns of adult male California sea lions (Zalophus
californianus). US Department of Commerce, National Oceanic and Atmospheric
Administration, National Marine Fisheries Service, Alaska Fisheries Science Center.
Lasisi, S., McCullen, P. and Turner, K., 2016. The value of'same day'logistics in e-tailing: A
review of consumer preferences.
Lodder, A. R. and Murray, A. D. eds., 2017. EU regulation of e-commerce: a commentary.
Edward Elgar Publishing.
Lodder, A. R. and Murray, A. D., 2017. The European Union and E-Commerce.
McKechnie, S. and Nath, P., 2016. Effects of new-to-market e-store features on first time
browsers. International Journal of Human-Computer Studies. 90. pp.14-26.
Nurmela, T., 2016. A Comparison of B2C E-Commerce in Finland, Germany and United
Kingdom.
PARKER, D. M., and et.al., 2015. Conservation considerations revealed by the movements of
post-nesting green turtles from the Republic of the Marshall Islands. Micronesica. 3.
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Saghiri, S., and et.al., 2017. Toward a three-dimensional framework for omni-channel. Journal
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Samoilenko, A., 2016. E-commerce in Russia: Challenges and Opportunities: Russian e-
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Wiethaus, L. and Chisholm, S., 2017. The Commission's e-commerce sector inquiry–Time to
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Online

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