Analyzing the Efficiency and Competiveness of Operational Structures & Information System in Argos - Essay Example

?Argos Home Retail Group Argos is a part of Home Retail Group which is a leader in the home and general merchandise market. Their retail brands include – Argos, Homebase and Habitat. These are currently some of the biggest brands in the United Kingdom. Apart from these, Home Retail Group also has their own brands in different categories such as consumer electronics, toys and furniture. Their brands include Bush and Alba in their consumer electronics division, Chad Valley in toys and Schreiber and Hygena in stylish, affordable furniture. Some of their other brands are Colour and go Create. (homeretailgroup.com) They were also the ones that urged to the government to take serious measures to ensure that the income of middle and lower earners be boosted. (telegraph.co.uk) From an initial view itself, Home Retail Group seems to be one that not only cares about themselves and their employees, but also about the society they are taking from. Let us read further to understand how this group is helping one and all. Argos Argos is one of the largest brands that Home Retail Group boasts of. Argos is a unique multi-channel retailer that has made a special place with the consumers because of their varied choice, strong values and convenience. Apart from having over 700 stores across the UK and the Republic of Ireland, they also sell products online, over the telephone, via a tele-partner – Vodafone, a special mobile website and so on. With their 33,000 employees, they are one of the biggest organizations and consumers seem to love them. Their website was the most visited high-street website in UK in 2008. (argos.co.uk) What probably separates Argos from competitors is the commitment they show in their work. They indulge in what they call ‘Responsible Retailing’, better known as Corporate Responsibility to the layman. By taking various measures, they do much more for the economy and the environment than many other organizations in their category. They play a great role in preserving the environment by dealing with issues such as waste management and energy consumption. They take steps to ensure that the consumer also is being environmentally-friendly. To do this, they ensure that they provide the consumer with information about their sources of timber, and so on. They also play a very important role in supporting the ecology, by giving back to the community that they are a part of. They believe in recycling and ensure that it is a strictly-followed policy in all of their stores. Another important thing that they have done is: taken measures to ensure that people with disabilities can have an easy shopping experience in their stores. (argos.co.uk) From all this we can see how much Argos is a part of the community. They are not only taking from the community, but are doing the best they can to ensure that whatever they take, they return more to the community. By being supportive of the ecology, they are also showing that they are not a corporation that just cares about profit, they care about the planet and the people on it! Operations Management Operations Management is a function that basically is responsible for managing the operating core of an organization. This includes various activities such as ‘creation, production, distribution and delivery of the organization’s goods and services’ (iiml.ac.in). This means that Operations Management revolves around all the activities that are involved in the daily functioning of an organization. Let us take a retail chain for instance. Here, Operations Management would revolve around the designing, production, distribution and delivery of the products to the different stores, or even directly to the consumers if need be. Operations Management is very essential for any organization, as it gives direction and a structured plan to follow. Without it, we’d probably be lost. (mitsloan.mit.edu). One can only imagine the amount if chaos an organization, especially a retail store, could be in, without a properly designed Operation Management system. Take for instance just the one function of stocking the right amount of products. If one were not aware of how many products need to be stocked in a particular store, or how many products are remaining at the end of a week or sale period, there would be a random number of goods being sent there. This could lead to a disastrous situation – too many of certain products and not enough of certain other. So what is one supposed to do? The answer lies in following a well-designed and structured Operation Management plan. Operation Management in Argos: Initially, Argos followed a very lean operating model. Their stores were small and they stocked way too many items in all the stores. This meant that there wasn’t much space to stock the goods and therefore, sometimes there was only one piece of a particular item. Also, it took a while for the next set to get there, meaning that the consumers had to wait for a while. This does not go down well with the consumers who nowadays can easily find a substitute for the products that they want. Also, the systems that were being used to manage the supply chain was quite outdated, meaning it got confusing and was very slow. The Solution: Argos approached Oracle and Accenture to solve this problem. They helped Argos to develop advanced replenishment capabilities that would ensure that availability of products was increased. And they did. Today, Argos is lot faster and more efficient. And the replenishment of the stock is more or less in line with the demand. So, not all consumers have to wait for long periods of time to get their purchases. (accenture.com). This shows us how a well-planned and executed Operation Management plan can take the problem an organization is facing and turn it around. If it wasn’t for this exact function, today, Argos might not have been as successful with their customers. Information System Information System is ‘an integrated set of components for collecting, storing, and processing data and for delivering information, knowledge, and digital products’. (britannica.com). This basically means that the components that are involved in gathering, storing and processing data from customers in order to ensure that they receive their products on time is called a firm’s Information System. Firms depend on Information Systems so that they can carry out their daily operations and manage their customers and suppliers. Information Systems may be used to process the finances of the organization, to manage the human resources, to reach out to prospective customers online, and so on. Thus, we can say that in today’s technologically-advanced world, Information System can be very useful to an organization. To the extent that an organization that doesn’t have an Information System in place would be considered out of date and obsolete and consumers would not trust to deal with them. Take for instance the database of customers. Every store today must have a database of their customers. This not only helps them to conduct loyalty programs, but also helps them to discover their customer – their demography and psychograph, so that they may be able to develop strategies to reach out to them in a better manner. Information systems can also help to maintain the data just to keep in touch with the customer and keep in touch with them. It is also a far more reliable method of maintaining data rather than manually maintaining records as manual records may get misplaced or destroyed a lot more easily. This is also a good idea to show the consumer that you are keeping up with technology and taking the effort to reach out to the consumer via new avenues, thus underlining the hard work and effort you put in as an organization that wants to keep in touch with the consumer and make them feel special. The Argos Information System: Argos has from the beginning taken great efforts to ensure that they hold their place in the market. Initially, customers could purchase their products at stores or by ordering through catalogues. But since 1995, Argos introduced their website www.argos.co.uk to ensure that the customers had a quicker way to browse and purchase products with the advent of technology. Today, customers can even browse their website on their mobile phones and make purchases. This shows that Argos has moved ahead with time and technology and this will ensure they keep their spot in the market. Even as early as 1970, Argos was using the latest technology to monitor not only their in-store stock levels, but also consumer trends, get feedback and so on, to ensure they had the upper hand. (europa.eu) Argos is working extremely hard to ensure that their website is user-friendly and simple so that anyone from their gamut of customers may be able to use their new methods of purchase easily. Whether the website, the mobile version of the website or the Vodafone version, everything is so simple and user-friendly that people find it extremely simple to use. Also, Argos continuously works on fixing any issues or bugs that are causing trouble. From all this we can observe that Argos is in fact extremely customer-friendly and is doing all that they can to ensure the comfort of their customers and be beneficial to the customers and themselves in the long run. Issues For all of Argos’ success, they too have certain issues with their Operation Management and Information System. Following is an outline of these. Operation Management Issues: The biggest problem Argos faces is its sheer size of business. No matter what they do, they have to ensure that they do it across all the business, ensuring uniformity. So, when they decide to apply a certain procedure in the system of one store, they have to apply it across all stores. It won’t help if they apply a certain procedure in only one store. Argos has various means by which consumers can purchase their products. This means that these must always be a sync with the website and the catalogues and the mobile version in terms of the products available, when they will be introduced and so on. Maintaining this might be a problem, but then technology today is at its prime. So, it is possible for Argos to have a brilliant information system in place that will solve all their operation problems. Information System Issues: One factor that might be a major issue with the information system for Argos is its sheer size. The information system of Argos is being used to collect, store and process data from consumers across various platforms such as the internet, mobile devices, and so on. Uniformity must be maintained across all platforms so that the consumer is not faced with any sort of confusion. To ensure this, Argos really must take effort to have a common information system across all its branches and stores, not only to maintain uniformity for the sake of the consumers but also to make it all simpler for them to maintain and take data from. Another problem that they might have with the Information System is the various branches it has entered. Argos’ information system today is being used for various practices and to reach out to a large number of people via the internet, on their mobile phones, via a tele-service provider, and so on. This could create a major problem for them if it is not maintained properly. The system could crash and be a huge problem. It is also being used to monitor consumer insights and manage the human resources of the organization and its finances. This vastness of operation might cause problems if it is not constantly updated and maintained. The solution to this problem is to be wary. The people at Argos need to be aware of the fact that such a massive information system comes with certain risks and they need to be prepared in case something happens, such as if the entire system crashes. Porter’s Five Forces Analysis: Let us apply Porter’s Five Forces Analysis to Argos. Threat of entrants: Even though Argos is well established, there is always the danger of a new entrant in the market. One that understands the consumer better, and gives them what they want at better value for money. Especially since today’s consumer knows what he wants and is willing to experiment in order to get there. Today’s consumer is also willing to spend money in order to try out something new, if it will get him the satisfaction. Threat of substitutes: Nothing is invaluable today. Everything has a substitute. The consumer has the purchasing power and is the biggest danger to products because the consumer can always find a substitute for any product. Even though consumers are fussy about the brands they use and the attributes that they want from a brand, they can always look for a substitute product that will give them the same benefit. The only thing Argos can do to prevent this from happening is to ensure that their products and service is so impeccable that the consumers refuse substitutes and demand only Argos products. Power of Suppliers: Suppliers have almost as much of an impact on the business. That’s where the raw materials come from. Therefore, it is essential for the organization to keep their suppliers also happy. If anything were to make them unhappy and they refused to supply products or began supplying inferior quality products, it would lead to grave problems for Argos. To prevent such a situation, Argos must take special care of their suppliers and ensure nothing turns them against the store. Power of buyers: The buyers are the ultimate decision makers that decide the state of any organization. Consumers’ purchasing power is what makes or breaks a brand, with regard to the demand for their products and the ability of the consumers to purchase the product. If they are not satisfied with the product or are in any way not capable of purchasing then that’s a big problem for Argos. As long as Argos has managed to keep their product standards high, not much can affect them, apart from the buying power of the consumers going down, and that isn’t really something they can control. Competitive Rivalry: Competition is prevalent in every market. This happens whether the products are bad or great. There is always someone who is trying to be better. Competition in a market is healthy. It ensures that everyone is trying their best. There is nothing wrong with competition as long as it is healthy. Once companies start to try and sabotage one another and their reputation in the market, that’s when it all goes wrong. These were the elements of Porter’s five forces. As it is evident, an organization of Argos’ magnitude has nothing to worry about as long as their work is honest and they put in their best. Nothing will come in the way of an organization that is doing the best they can not only for their consumers but for the society as well. Recommendations and Conclusions: Argos today is very vast enterprise. They are also extremely technologically advanced and up-to-date with the various technological aspects that can be attached to their enterprise. This includes using a very advanced information system to manage the daily operations and keep in touch with the consumers. They may have a few issues but the bottom line is that they are doing all that is in their power to ensure that their consumers have easy access to them and their product portfolio. The consumers today can reach them and not only browse the various products they have to offer but can also purchase these products via various platforms including physically walking into a store, purchasing via a catalogue, the company website, the mobile version of the company website as well as a tie up with tele-service provider Vodafone wherein customers get easy access to their store. This is a vast enterprise. A varied means to reach the products and Argos has achieved one thing – direct access into the consumer’s home, mind and pocket. Argos might have a few issues, but there is nothing that they haven’t faced or overcome. One can see how far they’ve come since they were the winners of the Supply Chain Transformation Award in 2008 which was given by Retail Week. (tdg.eu.com) Keeping up with technological advancements is a great strength and Argos has been doing so since as early as 1970! Their Operations Management and Information System is brilliantly designed to make optimal use of technology and sensibility. With the way they have been showing the way to consumers, there is no doubt that they will be the first choice for consumers for a long time to come. There is also the magnitude of things they are doing to return to the community. Consumers today appreciate organizations that have this kind of policy. And considering the environmental conditions of today, what they are doing is not only noble but is also essential for a better tomorrow. More organizations should take example from the work that Argos put in so that we can have a better tomorrow. Argos is going full steam ahead. There is no proof to show that they are sluggish or lazy and with the attitude that they have, they are only on the route to grow bigger and stronger. REFERENCE: homeretailgroup.com, Our Brands, date of access: April 8, 2012 http://www.homeretailgroup.com/about-us/our-brands/ argos.co.uk, “About Argos”, date of access: April 8, 2012 http://www.argos.co.uk/static/StaticDisplay/includeName/AboutArgos.htm#about iiml.ac.in, “Operations Management”, date of access: April 8, 2012 http://www.iiml.ac.in/faculty_staff_operations_management.html accenture.com, “Argos: Supply Chain Management and Application Management Outsourcing” date of access: April 8, 2012 http://www.accenture.com/us-en/pages/success-argos-supply-chain-management-application-management-outsourcing-summary.aspx britannica.com, “Information System”, date of access: April 8, 2012 http://www.britannica.com/EBchecked/topic/287895/information-system europa.eu, “Case Study: Argos UK”, date of access: April 8, 2012 http://ec.europa.eu/enterprise/archives/e-business-watch/studies/case_studies/documents/Case%20Studies%202004/CS_SR05_Retail_1-Argos.pdf tdg.eu.com, “Argos: An agile and flexible supply chain for Argos”, date of access: April 8, 2012 http://www.tdg.eu.com/documents/Argos.pdf mitsloan.mit.edu, “Operations Management”, date of access: April 8, 2012 http://mitsloan.mit.edu/omg/om-definition.php telegraph.co.uk, “Home Retail urges help for middle classes as sales drop sharply at Homebase and Argos”, date of access: April 8, 2012 http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9145210/Home-Retail-urges-help-for-middle-classes-as-sales-drop-sharply-at-Homebase-and-Argos.html Read More