We will also discuss their culture and where we think Argos will end up n the future, giving our recommendations on how they can succeed. To complete this report, we divided into four parts. In the first part, we carried out an external analysis of Argos. In order for us to fully carry out the analysis, we conducted a PESTLE report, looking at the Political, Economical, Socio Cultural, Technological, Environmental, and Legal factors, which Argos may face.. In order for us to carry out a thorough internal analysis of Argos in the second part, we used Porters five forces model, and the FRI. model.
We also explained Argon’s current strategy and their current culture. With the third part of this report, We carried out a thorough SOOT analysis, joking at the Strengths, Weaknesses, Opportunities, and Threats that Argos will have to be prepared for. The SOOT links up with Internal and External factors. In the fourth and final part we concluded this report, with a brief conclusion on where we think Argos is going in the future and recommendations that we believe Argos should take in order to succeed in the digital-retailer market.
Introduction Argos is part of Home Retail Group, the Auk’s leading home and general merchandise retailer. Argos is one of Ireland’s leading digital retailers, offering more than 33,000 products through http://www. Argos. E, its growing mobile channels, stores, over the telephone and uniquely, through Argos TV. Argos gets over 430 million website visits annually. They serve around 130 million customers a year through its network of 740 stores, within Ireland and LIKE (About Us, 2014).
Argos has continued to grow its multi channel sales penetration, representing a EH. Bon increase from the year before, representing 51 % of total sales. Mobile commerce plays a huge role in Argon’s finances, representing 10% of total sales, up from 6% the year previous, remaining at the forefront technological advancement; developing such things as Apple ND Android APS, and the web platform or mobile devices exploiting this increasingly popular method of shopping.
They have also taken advantage of social networking sites such as Backbone and Twitter, to help promote their brand. Argos offers a delivery and a collection service to its customers, each delivery will be delivered to the customers chosen destination, and the collection of the product can be done from any Argos store chosen by the customer. Home Retail Group’s overall plan is to reinvent Argos as a digital retail leader (Our Strategy, 2014). “Argos is investing 300 million pounds ($485 lion) to reinvent itself from a catalogue-led to a digitally-led business. (Yahoo,2014) Pestle Analysis Political Corruption level This year, Ireland had a rating of 72 according to the corruption index published in the Irish Times. Which is not a critical rate to lead policies in a collective interest. Tax policy (rates and incentives) “The response of the government to the collapse of the housing market was to introduce austerity measures to improve public finances. The fiscal consolidation programmer Ireland has undertaken between 2008 and 201 3 entailed measures equal to almost of GAP (21. % of GNP).
One third Of these measures have been based on increased revenue (Polycyclic). ” With a direct impact on household expenditures, we retain 3 mains measures: The introduction oaf carbon tax in 2010 The top rate of VAT has risen by 2%. Property taxation was reintroduced in 2013. Even with these increases, the Irish tax revenues are still bellow EX. rates. Freedom of press The Press Council of Ireland assures that’s the press control, independent of both government and media, upholding the freedom of the press. Regulation/De-regulation As a EX. member, Ireland tends to liberate exchanges.
If it can be different on specific areas, the retailing market tends to be more De-regulated than regulated. The role of the government is here to assure a fair competition. (COED) Trade control Products may have to comply with performance requirements before they can be sold, or even imported, including (enterprise-Ireland): Labeling as to origin, textile composition and care, composition and quality of food products. Technical standards. Language requirements for labels. Retail unit packs, transit packs and marking on packing cases may also have to comply with specific rules.
Tariffs Tariffs are regulated by the European Commission and are fixed the importation country’s rates. All tariffs are referenced at made. Europe. Eh. Government involvement in trade unions and agreements If the union Density was only 34% in 2009, Trade Unions are now calling for legislation on collective bargaining to be enacted in advance However, employer groups remain vociferously opposed to mandatory trade union recognition for collective bargaining purposes, fearing it will jeopardize foreign direct investment (FED) from multinationals. Refunded . U) Moreover, Trade Unions are allowed to: Negotiate agreements with employers on pay and conditions Discuss major changes to the workplace such as large scale redundancy Discuss their member’s concerns with employers A company their members in disciplinary and grievance meetings Provide their members with legal and financial advice Provide education facilities and certain consumer benefits such as discounted insurance. Economical Wealthy country $45000 GAP per capita in 2010 Named as best country for business by Forbes magazine.
One of the main criteria enhancing the fact of doing business in Ireland is the low corporate taxes rate, evaluated to 12. 5%. Inflation rate Decrease towards household equipment: -3. 3% Steady consumer prices Annual inflation of 0. 2% (ICP) Unemployment ratio 12. 3% in January 2014 Labor costs 100. 39 Index points by the end of December 2013 Business cycle With the economic recovery, results remain positive despite a weaker economical activity, households increased and ICP as well Positive evolution of sales in the retail industry is observed since November 2013 equal to 1. %, and up to 3% in December 2013. Greater Dublin area represents 75% Of the retail sales Average Irish net incomes ?2707 per month, increase of ?eye since between September 2013 and December 201 3 Low interest rates: benefit for the country’s economy Fiscal Itty It is a threat regarding the government GAP growth because of credits contracted, limited lending to Seems and banks balance sheets Ices Index down to 8. 72 to 4783. 04 by the 1 5th of January 2014. Weather in Ireland Irish weather is humid, windy and rainy.
Last year including January/ February 2014′ storms and floods, have seriously affected and damaged some areas of Ireland. This has been affecting retail sales, especially over the Christmas period. Socio cultural Total population Ireland: 4. Million in 2012 (Google. E, 2014) Health conscious It is rising in the country; the industry forecasts the market to reach million euros by 2016. (pharmaceutically. Com, 201 3) Obesity rate is a growing health concern, equal to 23% in 2010, the average established by the COED being of 17. %. Despite the data’s, 83% of the population is qualified as a good health status. High-level of education Expectancy agreed to the COED in 2010, the country is ranked 18 out of 36 countries examined and beneficial of a 497 index points towards student skills (“average performance of students aged 1 5 according to the PISA”) 87% f the 25-arrears old have a high-school degree. However, failure rates over the third level college education and employment prospects are noticed by the HE (Rightness. Com, 2014).
Ireland most imported products are Electrical machinery and components (16 percent of total imports), fuel (1 5 percent), motor vehicles (10 percent), food (10 percent) and medical and pharmaceutical products (9 percent) 60% of the products are imported from the European Union. The principal partners are: В« United Kingdom (34 percent of total imports), United States (12 percent), Germany (8 percent), Netherlands (5 percent), China (6 percent) and France (4 percent) (Tragicomedies. Com, 2014) Average working hours a year in Ireland: 1543 hours, Time devoted to leisure: 15. 18 hours (COED. Mom, 2013) Retirement age: The average for men and women is reported to be 66 years old (Tragicomedies. Com, 2014) As feet 2. 63% of the population reported attack assaults in 2010 compared to the general countries average of 4% (Coed. Com, 2013) Buying habits 72% of the women are in charge of the grocery shopping Consumers are looking for reasonable quality/price products Spending towards own-brands are increasing Corporate. NCAA. Ii, 2013) Miscellaneous, housing and recreation/education spending are the main Irish spending Household goods sales decreased of 55%and housing goods of 10%.
A global sum of 1 1 Billion of Euros has been “saved” by Irish consumers in 2013 compared to 2012 but they have to pay B taxes (Independent. Ii, 201 3) Religion in Ireland Roman Catholic: 84. 16%, Church of Ireland: 2. 81 %, no religion: 5. 88% (faithlessly. Co. UK, 2014) Population growth rate 1. 16% in 2013 (CIA. Gob, 2013) Ireland has the highest rate of emigration 89000 people emigrated in 2013 and 55900 (including 1 5700 returning Irish people) immigrated to Ireland, mainly from Western and Eastern Europe, Britain and other countries. That represents an increase, respectively of 2. % and 6% compared to the previous year(Irishmen. Com, 2013). Minorities The most important minorities are coming from Poland (the largest group), France, Kick, Lithuania, Spain and the LIST (Adjourned. Ii, 201 1). Life expectancy 81 years old in average (83 for women, 78 for men) (Tragicomedies. Com, 2014) The balance of the sex Distribution is quiet steady, with an index of 1. 03, 1 meaning there is no difference in between genders (COED. Com, 2013) Highest fertility/birth Rate over Europe: 2. Children per women (Irishmen. Com, 201 3) Household net $SCUDDED per year, ranked 18/36 countries (COED. Mom, 2013) Social inequity in Ireland is steady 1. 02 difference between poor and rich people (COED. Com, 2013) Social Classes: Employers and managers, lower professional and non-manual workers represent the most important social classes in Ireland (as well all others gainfully occupied and unknown) representing, respectively, a growing labor force of approximately 700 000, 590 000 and 950 000 people, in 201 1 (Relatedness’s. Wordless. Com, 201 2) Family size and structure Main family model remains the traditional married couple issued from their first marriage .
One in four children under 21 do not come from this model type. The other main family structures are composed by never married cohabiting couples and lone mothers. All those family structures represent 92% of the population in Ireland agreed to the last census established in 2006 by the SERIES (adjourned. Ii,201 2). Technological Basic infrastructure level If we refer to the Engineers Ireland’s’ report regarding: Energy infrastructures face different problems regarding security of supply especially for gas), competitiveness and carbon emission targets.
Transport system is weak regarding Roads, Rails and Sea Ports Water and flooding are not well managed that leads to problem on Water supply and wastewater, Water quality and, flooding. Waste is still not well integrated in a cycle that considers waste as a source of energy according to EX. objectives. Communications estate can be considered as a brake on the relationship between producer and consumer. This can be explained by EH budget cuts on the Connecting Europe Facilities. Rate of technological change The multiplication and the variety of supports (Computer/Tablet/Smart Phone) lead to a multiplication of the ways of change.
As these markets have a really short life circle, the rate of technological change is accelerated and need a constant adaptation of channels. Spending on research & development The three main areas regarding innovation on the market retail are those about processes, marketing and organization. If they are not always expensive in term of research, these areas have a huge impact on the Structure. Technology incentives According to IDA Ireland, Irish legislation leads different Technology incentives as: A 25% R&D tax credit – designed to encourage companies to undertake new or additional R&D activity in Ireland.
Lifestyle information in the IDA Tax Brochure 20130 Irish legislation provides Macs with incentives to generate qualifying patents -? up to ?5 million of Ann al qualifying income can be exempt from Irish tax. A maximum corporate tax rate of 12. 5% on all corporate trading profits generated by RD&I activities. Technology level in your industry Stock management is the core competence of any retailer. As this sector is well developed in Ireland, technology regarding stock management is accurate. However, as a new way of centralization, new channels of distribution can be upgraded.
Access to newest technology The access to newest technology is eased by the fact that Ireland is a really attractive area for headquarters of innovative companies seeking a good place to establish their presence in Europe. Ecological Attitudes toward “green” or ecological products Irish consumers are confused for 48% of them towards the green products and their labels. For this reason, in 201 3, the minister Phil Hogan announced the introduction of a single green market, with a Unix label form agreed to an European law initiative, enabling consumers to recognize the label in every country member of Europe (Independent. E, 201 3) gal Environmental Law Ireland has a well-developed system of environmental legislation, much of which is based on EX. directives, which alms to prevent and remedy to environment damages. The key pieces of environmental legislation regarding the retail market can be: Environmental Protection Agency Act (1992). Protection of the Environment Act (2003). Environmental (Miscellaneous Provisions) Act (2011 Waste Management Acts (1 996 to 2011). Air pollution Acts (1 987 and 2011). European Communities (Environmental Liability) Regulations (2008 – 201 1) (Environmental Liability Regulations).
Local Government (Water Pollution) Acts (1977 – 1990). Water Services Acts (2007 – 2012). (logbook . Ii) Education Law In response to the low level of people (15-29 year-olds) in “Education” (or in “Education and Work”) compare to the COED average, Ireland leads two policies: The Education and Training Boards Bill: Which aims to better integrate skills and training in order to develop skills for employed and unemployed individuals, assist students’ transition into the workplace. The Springboard programmer: Which funds free part-time courses in higher education of unemployed individuals in areas with labor market skills shortages.
Anti-trust law The Irish Competition Authority has responsibility for enforcing Irish competition law and European competition law. It aims to prevent unfair trading practices. Discrimination law Discrimination in the area of employment is prohibited by the Employment Equality Acts 1998 and 2004. The Acts cover all aspects of work including recruitment and promotion, the right to equal pay, conditions of employment, training or experience. (Justice. Ii) Copyright, patents / Intellectual property law The Copyright and Related Rights Act, 2000 came into effect on and from 1 January 2001.
To put in place a modern, effective, technology-neutral of statutory protection for copyright including provision for civil remedies and criminal penalties. To transpose into Irish law a number of EX. directives in the filed of copyright Consumer protection and e-commerce The Regulations took effect on 1 July 201 1 in Ireland The Irish Data Protection Commissioners guidance on the Regulations states that “clear and comprehensive” information should be “prominently splayed”, “clearly accessible” and “as user friendly as possible”.
It also necessitates that there be clear communication to the user as to what she/he was being asked to consent to and furthermore, a means Of giving or refusing consent to any information being stored or retrieved. Employment law Protection of Employment (Temporary Agency Work) Act 2012: This Act provides that since 16 May 2012 all temporary agency workers must have equal treatment as if they had been directly recruited by the hirer in respect of the duration of working time, rest periods, night work, annual leave and public holidays and pay.
Health and safety law Common law Health and Welfare at Work Act, 2005, Providing safe systems of work, Providing a safe place of work plant and machinery that is safe and fit for purpose Training & supervision A duty of care in the selection of fellow employees. Data protection law Data Protection Acts 2003. The Acts state that information about you must be accurate, only made available to those that should have it and only used for specified purposes. You have the right to access personal information relating to you and have any errors corrected or, in some cases, have the information erase. Internal Analysis
The Current Strategy of Argos and its incidence on the company In 201 2 Argos decided to launch a five-year transformation plan designated to address its competitive challenges, exploit market place opportunities and restore it to sustainable growth: Reposition Argon’s channels for a digital future. Argos’ objective is to develop its online, mobile and tablet channel. The aim is that will become the primary channel in a near future for interacting and communicating with costumers. The Stores and catalogues will be adapted in order to support digital Offer. They have 737 stores in UK and Ireland, offering over 29. 0 Products, available on both the catalogue and Internet In order to follow Argos’ strategy we came up with a few recommendations. We noticed that Internet and mobile channel would be the key future of the distribution channel. 51 % of sales are multinational 2. Ban. Their website and app got 635 million visits during the year 2013. We suggest that Argos should try Improve as much as possible in theses facilities for the costumer, to increase sales and at the same better advertising for the brand. Delivery Department is gong to be really important as well, the fact is people ill buy more through their mobile or pad.
Our idea is that Argon’s should start negotiating with a company like LIPS to see what they propose, in order to improve the rapidity of delivery. To be known as the leader of multinational distribution in our time, would benefit Argos greatly. Provide more product choice/ Develop a customer offer that has universal appeal There is not a lot of companies such as non-food product, which can compete with Argos, on its range of product.