Argos Competitive Strategy
5th March 2012
Argos History
Founded in 1973 by Richard Thomkins, Argos is the largest general-goods retailer in the United Kingdom and Ireland with over 751 stores (1). It was then acquired by GUS plc in 1998 and subsequently became part of Home Retail Group, which was demerged from its parent company, GUS plc, with effect from 10 October 2006 (2).
A non-specialized store, Argos carries over 35,000 different household goods such as furniture, toys & games, electronics, jewelry, sports, leisure equipment and PCs. Currently it is the leading UK retailer of toys, small electronics and jewellery (3), and has a significant market share in ‘Do It Yourself’ (DIY) and sports equipment (Exhibit 1). Nowadays, the company boasts over 33,000 employees, serving more than 130million customers each year. As of 2011, took in £4.2bn (€5.03bn) in annual revenues (4) - approximately 7.5% of the £56bn industry.
Argos’ mission statement is “We provide our customers with the best value for money through the most convenient shopping experience” (5). The company is based on a simple idea: provide the comfort and convenience of home selection, purchasing and delivery with the closeness of high street stores. In 2004, over 98% off the population of the UK live with in 10 miles (16k) of an Argos store. Since then an additional 201 stores have been opened, totaling 751.
Industry Overview
“The current UK retail market is dominated by a comparatively small number of large retailers (6).” For these retailers, including Argos, to be part of this industry they need to find it attractive or to have a competitive advantage that allows them to survive and out perform their competitors. Exhibit 2 shows an overview of the attractiveness of the retail industry in UK. Porter’s model of the five competitive forces help in analyzing the industry’s “attractiveness”. In order to narrow down the analysis, we focus only on the UK market.
We can deduce from the exhibit that the retail industry
Argos History
Founded in 1973 by Richard Thomkins, Argos is the largest general-goods retailer in the United Kingdom and Ireland with over 751 stores (1). It was then acquired by GUS plc in 1998 and subsequently became part of Home Retail Group, which was demerged from its parent company, GUS plc, with effect from 10 October 2006 (2).
A non-specialized store, Argos carries over 35,000 different household goods such as furniture, toys & games, electronics, jewelry, sports, leisure equipment and PCs. Currently it is the leading UK retailer of toys, small electronics and jewellery (3), and has a significant market share in ‘Do It Yourself’ (DIY) and sports equipment (Exhibit 1). Nowadays, the company boasts over 33,000 employees, serving more than 130million customers each year. As of 2011, took in £4.2bn (€5.03bn) in annual revenues (4) - approximately 7.5% of the £56bn industry.
Argos’ mission statement is “We provide our customers with the best value for money through the most convenient shopping experience” (5). The company is based on a simple idea: provide the comfort and convenience of home selection, purchasing and delivery with the closeness of high street stores. In 2004, over 98% off the population of the UK live with in 10 miles (16k) of an Argos store. Since then an additional 201 stores have been opened, totaling 751.
Industry Overview
“The current UK retail market is dominated by a comparatively small number of large retailers (6).” For these retailers, including Argos, to be part of this industry they need to find it attractive or to have a competitive advantage that allows them to survive and out perform their competitors. Exhibit 2 shows an overview of the attractiveness of the retail industry in UK. Porter’s model of the five competitive forces help in analyzing the industry’s “attractiveness”. In order to narrow down the analysis, we focus only on the UK market.
We can deduce from the exhibit that the retail industry