Marketing
or negotiating? That is the question posed by some readers who were intrigued
with the issue of bidding from Sainsbury to Argos. Is it marketing—or is it
another business agenda?
Is Sainsbury competing?
Today’s
generation is already highlighted by unique and fast technology. Many people
rely on the internet, delete files without breaking a sweat, and find better ideas
in just one click. Online functionality is now considered essential, which is
the reason Sainsbury got the idea of doing business with Argon. Rivalry is
always present when we talk about business, and competition is generally
accepted as a necessary condition for the coordination of disparate
individuals’ interests via the market process. It is a condition where “buyers
tend to compete with other buyers and sellers tend to compete with other
sellers.”
"The stakes are now being raised on same-day
deliveries for groceries," Sainsbury's Chief Executive Mike Coupe told
Reuters on Dec. 3 when discussing the impact Amazon was having on the U.K.
grocery market, where it is not yet a big player.
"You could argue that they're already
having an impact in the way that people are thinking," he said, noting
that Sainsbury was looking at same-day grocery deliveries. Sainsbury is a good
competitor and has performed a better job, unlike rivals Tesco (TSCO.L), Asda
(WMT.W), and Morrisons (MRW.L)
Analysts
have realized that the deal could speed up Sainsbury’s deliveries and widen its
range with electronics. They planned to shut down some Argos stores, sell their
own products to others, and open an accommodation.
Amazon being competitive
Within
competitive markets,markets are often defined by their sub-sectors, such as the
“short-term” or “long-term” market, the “seasonal” or “summer” market, or the
“broad” or “remainder” market. The competitive process in a market economy
exerts a sort of pressure that tends to move resources to where they are most
needed and can be used most
efficiently for the economy as a whole.
Amazon offers delivery within one hour for
members of its Prime subscription service in a limited number of city-center
postcodes or in a two-hour same-day window. Experts predict retailers will only
be able to keep up with Amazon if they can strike a balanced with higher-priced
goods.
Sainsbury is prepared for grocery competition
from U.S. online giant Amazon (AMZN.O). Amazon is the largest internet-based
retailer in the United States and also sells certain low-end products. They also
offer international shipping for some of its products to a limited number of other
countries.
Home
Retail Group, Argos, and Home-Base
"There would be synergies from optimizing
the combined group's property portfolio, but that might not be entirely
straightforward with Home Retail's lease liabilities," said one major
institutional shareholder in both companies.
Home Retail Group’s retail businesses bring
outstanding value and convenience to customers’ everyday lives whether shopping
at home or on the move. Argos has an outstanding offer of convenience, choice
and value to meet customer needs, selling products through its 840 stores, its website,
and mobile apps. Home-Base is a leading home and garden improvement retailer,
offering a growing range of products in a differentiated store environment.
"We believe there is significant
intrinsic value in the business," said Cantor Fitzgerald analyst Freddie
George, who rates Home Retail a "buy" with a target price of 195
pence.