Company Analysis of Argos

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  • Topic: Argos, Retailing, GUS
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Denzel
The company analysis of Argos
Profile
Argos, an extraordinary retailer in the United Kingdom, is operating 750 chain stores(Home Retail Group website,2010). And it is the unique retailer which is affirmed by customer’s feedback, quality of production and convenience as it sells more than 20,000 general commodities via the catalogue(Home Retail Group website,2010). Customers can obtain the Argos catalogues, select the needed items to purchase them from the collect desk in branches or they are delivered to the residents’ home in a few hours. Moreover, it is possible that customers can choose an online or over the phone to complete the purchasing process.

Argos provides services to more than 135 billion purchaser in store and receives 6 million orders in the UK from Internet and telephone(Home Retail Group website,2010). In general, there are approximate 11.3 million residents having current Argos catalogues at home.(Argos website,2010).

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From 2005 to 2008, the sales of Argos increased remarkably from 3652 million to 4321 million pounds. However, between 2008 and 2009, the sales indicated a slight decreasing from 4321 to 4328 million pounds(Home Retail group,2010). During the year, the sales and market share of electronic commodities climbed up, for example, a range of video games, flat panel TV and a range of products related to PC. In addition, the worst performance happened in the furniture and home-ware catalogues.(Home Retail Group website, 2010)

KEY DEVELOPMENT
Argos, which was established by Richard Tompkins in 1973, became a pioneering retailer and had established itself as the major player in British retail market recently(Argos website, 2010). The reason why Richard Tompkins set up the Argos is a new conception that people could purchase items from catalogue. At the begining of set up, Argos recruited 100 persons to work together and made 1 million pounds profit(Argos website,2010). Six years later, Argos was gained by BAT industries for more than 30 million pounds and then it was de-merged from parent company BAT industries in 1980(Argos website,2010) and referring to the development of Argos, during the first seven years, it operated just as other general retailers. Until the 1980, Argos set up its first own band Elizabeth Duke jewellery counter(Argos website,2010). Meanwhile Argos achieved the opening share price of 203.5 pounds when it started to be listed on the London Stock Exchange in 1990(Argos website,2010). At the end of the 1990s, the number of chain stores in UK was 457 and turnover was 2 billion pounds(Argos website,2010).

Since 1998, Argos was acquired by Great Universal Stores plc (GUS), the scale of company had been expanded, because the GUS transfer ownership of 33 index stores to Argos(Home Retail Group website,2010). In 2006, the Home Retail Group plc, comparising Argos, Homebase and Financial sevies, is demerged from GUS and list on the London Stock Exchange. Under the GUS leadership, the sales revenues reached 1 billion pounds in 2008(Home Retail Group website, 2010)

SWOT ANALYSIS

As the leader in UK general merchandise market, at first sight, there are two significant strengths to Argos. First, Argos presents a good record of after sale service and supply chain management. For instance, the majority of things in Argos contain a thirty days money-back guarantee which means within thirty days, customers have the right to get the refund or to return the items which they do not enjoy(Argos,2010). Second, Argos keeps a great reputation and owns loyal customers base. Argos owning a great range of products and more than 20,000 products still keeps low price by decreasing the product cost. And it is the Winner of customers Service Initiative Award(Argos,2010).

There are two apparent weaknesses of Argos. First, although Argos created the unique method to minimize the distances between customers and production, this method has several obvious drawbacks which...
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