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Home retail Group has been focusing on some strategies such as Multi-channel expertise and leadership. The group has a strong capacity of organizational and infrastructural changes to reduce costs and improve the flexibility of the company. They have managed to make rapid advances in their technology; they have become leaders in online sales, move through mobile devices, or for pick up in a local store or home delivery. Another strategy focused is the expansion of product ranges and related services. The last step they have made is the recent acquisition of the Habitat brand in the UK. Finally, they have managed to continue to ensure customers excellent value and satisfaction. Its three-fold strategy have boosted the sales as high as £4.3 billion and serving more than 130 million customers a year.

In the Retailing sector after being well-established in the local market, they must focus on a global-scale effort. Their strategy is concern; it is wise, maybe essential to think “international”. There are some push and pull factors that has driven this company to internationalize.

Market Screening

Argos unique multi-channel retailer recognized for choice, value and convenience. They sell general merchandise and products for the home from over 700 stores throughout the UK and Republic of Ireland, online and over the telephone. In the last financial year, their sales were £4.3 billion and they employ some 33,000 people across the business.

They serve over 130 million customers a year through their stores and take 26% of sales through the internet channel alone. Four million customer orders either online or over the phone. On average, 18 million UK households, or around two thirds of the population, have their Argos catalogue at home at any time. The company is primarily focus on UK, although now is opening through online sales also in Spain.

Currently, Argos is one of UK’s leading merchandise retailers competing against big giants such as IKEA, Zara Home, and BHM (British Home Stores).

They have some distinct advantages in comparison to other home retail company competitors. They are stores that offer a wide range of products at a very reasonable price. Stores are located in the city centre within very easy access, and as they sell home staff their delivery service is very well organized. They have created a three-step system of buying. Starting with a catalogue, customers select their desired products and check availability, if it was not in stock products you can order it. Next step will be payment process, finally within 5 minutes at maximum you will pick your buy already packaged. This system provides multiple advantages to customers such as time, money as the products sold are quite cheap and reduces cost to the company as they don’t have to have big stores with all the staff at disposal. This allows companies to be located in the city centre, and make easy the access to customers.

After some research I have come up with three potential markets for internationalizing Argos. France, Italy or Spain would be the best choice. We have used screening filters to identify the best area to internationalize.

This paper examines the various issues which Argos must take under consideration while planning to launch its very first retail outlet in France.

GENERAL CHARACTERISTICS

Geographic Location

The Location of the market is a very critical factor to consider. Spain, France and Italy are three countries of relatively geographic proximity making easy the exportation of products to the stores located in the cities.

Language

The language is a key point in internationalizing and the three potential markets have different languages although English as common denominator, facilitating communication. Brand name don’t have to be changed as in those countries there is already a huge presence of Anglo-Saxon or foreign in general brands with very recognizable names within the population such as Ralph Lauren, MC- Donald’s, Decathlon, Sturbucks, etc. all this brands are present and are very popular in Italy, France and Spain.

Political Factors

All the potential Markets are in the European Union and European community or Common Market. In general terms, the governments, laws and regulations with some exceptions follow similar patterns. There are not radical points affecting our retail store in any of the selected markets.

Demography

Population as a percentage of EU-27 population by country and period, 2010. Units percentage.

Dependency Ratio, 2010.

Trends analyzed show similarities within countries selected. The percentage of active population is relatively equivalent to UK so customer focus is favourable in France Italy and Spain.

Economy

Nowadays, as we are submerged in a world economic crisis we must highlight and take into account this point into consideration.

Unemplyment rate

http://upload.wikimedia.org/wikipedia/en/thumb/c/c3/Flag_of_France.svg/22px-Flag_of_France.svg.pngFrance

10.2

http://upload.wikimedia.org/wikipedia/en/thumb/0/03/Flag_of_Italy.svg/22px-Flag_of_Italy.svg.pngItaly

10.2

http://upload.wikimedia.org/wikipedia/en/thumb/9/9a/Flag_of_Spain.svg/22px-Flag_of_Spain.svg.pngSpain

25.1

http://upload.wikimedia.org/wikipedia/en/thumb/a/ae/Flag_of_the_United_Kingdom.svg/22px-Flag_of_the_United_Kingdom.svg.pngUnited Kingdom

7.9

TABLE OF ADJUSTED GROSS AND NET DISPOSIBLE INCOME OF HOUSEHOLDS PER CAPITA, 2010. [PURCHASING POWER STANDARDS]

Industrial Structure, Technology, social organization, Religion, Education.

SPECIFIC CHARACTERISTICS

Cultural, Lifestyles, Personality, Attitudes, tastes or predispositions.

The third step that must be realized in order to meet with the perfect target market would be the screening of the market.

There are many factors in the macro-environment that will affect the decisions of the managers of any organization.

Political factors

The political system in France is being carried out by the Parliament and the Prime Minister; the degree of intervention in the economy is irrelevance compared to the local one. French political system encourages capitalism and offers certain stabilibity compared to other European countries. Although political decisions can impact on many vital areas for business, nowadays there are not relevant regulations affecting the implementation of the Argos store in the main cities of France. Moreover market regulations and current legislation favor Argos’ business as France is a member of the European community and has good relation with the UK. However some changes must be applied within taxation policy, EU enlargement, the euro, international trade…

Economic factors

France is considered a first- advanced market open to international and European partners. During this recession, France and many other countries including the UK are suffering decreases in the consumption and investment while savings are increasing. Nevertheless the conditions of consumers are changeable and many of the products offered by Argos are low-priced products accessible to a wide range of customers.

Social factors

UK society and French society are known to be very different although being European countries but they are both very multicultural countries, with people from all over the world working and living there. French main population in between 15 and 64, it is a young population with a median age of 39 years old. Argos is a new way of shopping at a very good price and it is focus to people aiming new technologies, quick and easy shopping methods.

Population

Total: 64,768,389.52

Note: 62,814,233 in metropolitan

Age structure

0-14 years: 18.6% (male 6,129,729/female 5,838,925)

15-64 years: 65% (male 20,963,124/female 20,929,280)

65 years and over: 16.4% (male 4,403,248/female 6,155,767) (2010 est.)

Median age

Total: 39.44 years

Male: 38.2 years

Female: 41.2 years (2010 est.)

Sex ratio

At birth: 1.051 male(s)/female

Under 15 years: 1.05 male(s)/female

15-64 years: 1 male(s)/female

65 years and over: 0.72 male(s)/female

Total population: 0.96 male(s)/female (2010 est.)

Technological factors

Argos has follow new technologies creating new processes.. Online shopping, bar coding and computer aided design are all improvements to the way Argos do business as a result of better technology. Technology has reduced costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products. And Argos has managed to reach all this.

Environmental factors

Due to the proximity of this to markets, we have very similar aspects in both countries.

Legal factors

In recent years in the UK there have been many significant legal changes that have affected firms’ behavior. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are some examples of what UK did. So if when entering France we need to adjust some legal changes it might not affect that much the firm’s costs consumer laws, competition laws, employment laws,

We should also consider

Local factors such as planning permission and local economic growth rates.

National factors such as UK laws on retailer opening hours and trade descriptions legislation and UK interest rates.

Global factors such as the opening up of new markets making trade easier. It might also change the labor force within the UK and recruitment opportunities.

3. Market Forces

With Accenture’s help, Argos implemented a supply chain management replenishment capability-based on advanced Oracle Retail technologies-without disrupting business operations or customer service.

Overview

When Argos decided it needed to develop an end-to-end supply chain solution that would deliver more responsive service to its smaller stores, it turned to Accenture.

Accenture’s ongoing High Performance Business research reveals that high performers understand the importance of operating their supply chains at peak efficiency-continually tuning supply to demand so that customers are neither over-serviced nor under-serviced, and that cost efficiency is not achieved at the expense of meeting customer expec