Analysis of Argos: Business Environment and Organizational Functions

This report provides a comprehensive analysis of Argos, a UK-based retail company, examining its business environment. It begins by exploring the different types and purposes of organizations, focusing on Argos's structure and functions, including marketing, human resources, finance, operations, and information technology. The report then delves into the macro-environmental factors impacting Argos, utilizing PESTEL analysis to assess political, economic, social, and technological influences. Furthermore, it conducts a SWOT analysis to evaluate Argos's internal strengths and weaknesses, as well as external opportunities and threats. The analysis considers the interrelationship between macro factors and the company's strengths and weaknesses, ultimately aiming to provide insights into Argos's strategic positioning and potential for growth within the competitive retail landscape. The report highlights the importance of adapting to technological advancements and understanding customer needs to achieve profitability.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 and P2 are covered in PPT................................................................................................1
TASK 2 .....................................................................................................................................1
P3 ...........................................................................................................................................1
TASK 3............................................................................................................................................3
P4............................................................................................................................................3
TASK 4............................................................................................................................................4
P5............................................................................................................................................4
P6 ...........................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment involves external and internal factors pose impact negative and
positive effects in business operation of organisation. Business environment provides many
advantages to company such as- it helps in identifying opportunities and threats, give proper
directions for growth of company, initiate continuous learning, helps to analyse competition and
identify company strengths and weaknesses.
Argos is a retail company which was founded in 1972 and is situated in United Kingdom
and Ireland. This company trade through two main sources that is online media and physical
stores. They have products from different brands which include health and beauty products,
skincare and nail products etc.
This assignment will focus on different types and purpose of organisation and
relationship between different functions. Analysis of internal and external factors of macro
environment with the help of PESTEL and SWOT Analysis has been performed in this
assignment.
TASK 1
P1 and P2 are covered in PPT.
TASK 2
P3
Argos is a multinational brand for providing retail service to its customers. It is essential
for company to manage their operating activities to maintain certain ratio of profit and income.
Company has established their business structure in appropriate manner which help in managing
activities that are associated with business. Using this structure company provide effective
services in every division that are associated with its business environment. Below mentioned are
organisational functions of Argos and their influence upon other organisational divisions:
Marketing: One of the most important department of an organisation whose purpose is to
promote product and service is known as marketing. Various activities that are associated with
marketing department is to advertise, promote, position companies product in order to increase
customer base and market segment. It analyses market research based upon demand and supply
from customers and buyers. Marketing function delivers combine result of every other functional
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units. Argos follows its marketing strategy by reaching out to its customers as far as possible.
They distribute brochures, organise campaign, develop promotional activities, advertise their
products to customer of UK. Now, store is available on online platform, it has targeted its
marketing practice by promoting them on social media sites. To attract customers they provide
discounts to frequent visitors. This help in increase of sale and profit by integrating services from
every other departments and presenting them to customers in terms of products and services
associated with them.
Human resources: Under this functions, recruitment and selection of workforce that are
required for an organisation is done. Using this unit, HR of Argos identify need and requirement
of employees in store and conduct interviews accordingly. Apart form appointing employees for
store, they also analyse need workforce in other functional units and fulfil it appropriate
candidate that possess desired skills and capabilities. Main purpose of HR department is to
maintain harmonious relationship between staff and employees in order to accomplish
organisational goals and objectives. Also, HR of Argos conducts training and development
programs in regular intervals to motivate their employees which will maintain their dedication
towards company. This will not only help them to polish their skills but will also develop them in
both professional as well as personal manner.
Finance: Under this function, funding to conduct operation in other units is evaluated.
Generally, activities here are kept confidential and various experts are appointed for performing
evaluation process. In Argos, accounting manager handles all financial decisions such as
taxation, billing, operational cost, return on investments, etc. This department must perform its
operations in effective manner otherwise huge monetary loss can be suffered by company.
Operation: One of the most important and functional unit any organisation is its
operational unit. Argos, has its operational department working as per the needs and demand of
customers. Under this segment, outcomes form other units such as human resource, marketing
and finance play important role and helps by providing information along with competent
workforce that respond as per the needs of customers.
Information technology: With advancement in technology, there comes new functional
unit in organisation which is information technology. Use of IT has not only minimized manual
work but also helped by providing reliable information that result in effective decision-making.
Argos uses RFID in all of their tags used on products to provide their customers with fast and
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error-free service. Also, company has started accepting plastic money which in turn resulted in
hassle free purchasing. Use of IT in Argos, has provided company with managing abilities to
handle large segment of customers in reasonable time period. By introducing online stores again
use of IT is proven as a boon for company. It has not only increased customer base but has also
increased target market area.
Above mentioned functions shows how they are relatable to various other functional units
in company. It has been observed that using these functions company reaches to its corporate
objective by using strategic action plan. While processing, each functional unit again create their
own functional strategic action plan which is completed in desired time frame. These actions are
governed by head of every department and they evaluate them as per guidelines. This approach
helps company to achieve their business objective by integrating every functional unit for one
purpose.
TASK 3
P4
There are some factors which impacts production of organisation. It may be positive or
negative for the company. Macro environment include those external factors which affects
business operation, decision making, working, strategies of organisation. Some externals factors
are economic, social, legal, cultural, political, economical, environmental.
Argos use PEST Analysis in order to identify and measure the impact caused by macro
environment on their business operation. Following is the negative and positive effect of external
environment:
 Political factors impact great impact on business operations carried out by Argos. As they
are operating in many countries and they have to deal with different political situation. If
they have to be successful in different countries, they have to know about different
policies and legislations which can prevent them from possible political risks. Various
factors they can be analysed before entering in new political zone and they can be
political instability, level of corruption, intellectual property protection, trade regulations,
tax rates, etc.
Positive impact: Proper knowledge of political environment of different countries can
result in carrying out the business operation effectively and ensures stability of company.
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Negative impact: Instability in political environment and less knowledge about political
condition of country can lead to improper management of business operation and loss to
company.
 Economic factors: There are large number of economic factors that can influence
business operation of company and they are inflation rate, interest rate, foreign exchange
rate, economic cycle, etc. Argos have to be careful while operating in different country
and should research about the economic condition of that particular country to ensure
greater stability of company.
Positive impact: Knowledge of economic conditions leads to better stability of company
and also maximise the profitability. It provides the information related to tax and interest rates
and according to that they can set their prices of product to maximise their profits.
Negative impact: It is very essential to know about economic factors as lack of
information can lead to huge loss to company. Argos includes huge transaction in different
currencies and should know the value of foreign currency rate to avoid any loss.
 Social factor: It includes the way of society's culture that impact the operation of
organisation. Shared beliefs and attitudes of the population play important role in how
marketers of Argos will understand the customers of a given markets.
Positive impact: By knowing demands and needs of people, it become easier for company
to produce products or services according to that. With this, they come to know how many
customers are satisfied with their products.
Negative impact: If Argos fails to identify demands and needs of its customers, then they
will not be able to manufacture goods that can satisfy the needs of its customers and ultimately
lead to great loss for company.
 Technological factor: There are different advancement and modifications in technology
which should be implemented within organisation so as to remain ahead of competitors.
Managers of company should be updated with the news related to changes in technology
and should try to establish within organisation as soon as possible.
Positive impact: With recent technologies and machineries, Argos is capable to
manufacture unique and different products. This will attract customers and will also increase
profitability of the company.
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Negative impact: With outdated technologies and machineries, company will not be able
to compete with competitors and won't be able to manufacture goods and services that are
actually required by consumers.
TASK 4
P5
Internal and external factors are necessary to evaluate by company to
decide their strategies and operations. Managers of company should involve
internal and external factors because they are critical part of planning.
Through this analysis, company can identify their strengths and weakness
and act accordingly to eliminate all weaknesses.
Internal analysis helps in evaluating company's specific features such
as its strengths, weaknesses, core competencies, its capabilities, relations
of employees and employers and resource availability. It ensures whether
company is working in desired manner or not, whether it is able to
accomplish company's vision and missions. If company is not able to work
properly in some area, then proper steps should be taken to improve those
areas.
External analysis helps in identifying company's threats and
opportunities which impact its marketing strategies, production, sales,
profits, market position, brand image etc. For encountering possible
threats, company can design encounter plan to effectively tackle that
situations.
Proper analysis of both factors can be represented by SWOT method.
This analysis of Argos company includes:
STRENGTHS WEAKNESS
 Largest retailer in UK.
 Over 800 stores in different countries.
 Collection of well known brands such
 Limited market share.
 Extremely tough to operate in
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as Elizabeth Duke, Bush, Chad Valley
etc.
 Strong Brand image.
 Huge working force of employees.
 Give strong competition to other
retailers.
 Business is cost effective.
 Have efficient cost control measures.
competitive market segment.
 Few controversies related to Sunday
working and price issues in Ireland and
others pose great impact on brand
image.
 Presence of brand in less globally
compared to other retail chains.
 Highly dependent on the UK market.
 Increase in employee turnover due to
unsatisfied wages.
 Target customer market is not clear.
OPPORTUNITIES THREAT
 Expand their business chain in other
growing economies.
 High percentage of sale comes from
online market, proper utilization can
increase in the sales.
 Improvement in products of their own
brand.
 Identifying new sources of competitive
advantage with the help of
technological advancements.
 Expansion of other international brands
would lead in increase in competition.
 Price wars with other retailers.
 Decline of catalogue showroom
business model.
 Quality of services is declined due to
cost leadership.
 Alterations in rules and policies of
government in retail industry.
 Major competitor are Tesco and
Sainsburys
With the help of above SWOT Analysis, Argos can strengthen their
weak areas and expand their business where they are getting good
responses. They can also formulate effective decisions to counter all threats
coming to them and utilizes various opportunities to increase their market
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share. Managers should be capable enough to identify their key strengths
and opportunities and should work hard to improve their functioning.
P6
Macro and micro environment influences business operation of Argos.
The company's management compares with different factors of macro
environment like economic, legal, technological, political, environmental,
social and cultural factors then managers formulate best strategies to
enhance their profitability. Ang uncertain change can impact decision
making and strategies of company. Interrelationship between macro factors
and company's strengths and weaknesses are described below:
Technological factors: There are regular advancement in
technologies occurring in market. If Argos have the capacity to update to
new technologies, then they should upgrade their technology to keep up
with other competitors. For up gradation, Argos should have strong
financial support.
Environmental factors: Every business uses various resources to
manufacture their products. So, it is important for company to focus on
environmental issues and designs their operations in such a way that it
cause minimum affects to the environment. Argos should follow all
guidelines related to environmental factors so that they can protect their
nature.
Social and cultural: A company is all rounder when it has talented
staff, efficient leaders and managers, strong financial resources, availability
of resources, etc. and Argos is one of that kind. They are successful in
satisfying their consumers all round the world and as well as needs and
requirements of employees also.
Political and legal factors: These factors include legal and political
rules, regulation and policies which is necessary for Argos to follow to
prevent any possible threat. These regulations ensure smooth functioning of
organisation and face legal challenges with the help of talented staff.
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Economic factors: This factor has significant effect on functioning of
business. These factors mainly incudes tax rates, exchange rates, inflation,
GDP, sales etc. If Argos wants to expand their business in other countries
then these factors may cause some problem to company because different
country have different economic strategies and organisation should be able
to face those challenges with proper strategies.
All strengths and weakness and macro environment factors are inter-
related to each other. Argos management should be efficient in identifying
their key strengths and weaknesses to improve their strategies. If company
fails to identify those factors then it will become difficult to handle threats
and risks coming from external environment. This will ultimately cause loss
in market which the company has to bear. They should analyse that whether
their products and services are able to satisfy consumer requirements.
Managers should identify new areas fro expanding their retail business so
that more consumers get connected to company.
CONCLUSION
The above assignment concludes that to have a successful business operation, it is
important to have skilled and talented staff which should be proficient in handling all challenges
faced by the company. Managers should design effective plans that can achieve mission and
vision of company as soon as possible. It is responsibility of leaders to maintain discipline within
organisation and follow standard operating procedures for better results. Every department of
company are inter related to each other and they all works together to achieve targets of
company. Manager should identify their strengths, weakness, opportunities and threats of
company and formulate effective plans to enhance its business operation. Its there responsibility
to remain up to date with all market situations and implement changes in the company.
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