Premier Investments: Strategic Analysis and Recommendations Report

This report provides a strategic analysis of Premier Investments, an Australian-based retail company. It begins by outlining the company's competitive advantages, emphasizing its organizational values and successful brands like Smiggle and Peter Alexander. A SWOT analysis is conducted to identify the company's strengths, weaknesses, opportunities, and threats. The report then applies Porter's generic strategies (cost leadership, differentiation, and focus) to recommend future strategic positioning for Premier Investments. Finally, it details potential financial and non-financial measures, such as cash flow, working capital, brand preference, and customer retention, that can be used to evaluate the effectiveness of the recommendations. The report highlights the importance of adapting to the competitive environment and focusing on organizational learning and intellectual capital.

Strategy and Sustainable Accounting
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Table of Contents
Introduction......................................................................................................................................3
Competitive Advantage...................................................................................................................4
Premier Investments SWOT analysis..............................................................................................4
Strengths.......................................................................................................................................4
Weakness.....................................................................................................................................5
Opportunities................................................................................................................................5
Threats..........................................................................................................................................6
Porter’s generic strategies................................................................................................................6
Potential Financial and Non-financial measures.............................................................................8
Financial Performance.................................................................................................................8
Non-Financial Performance.........................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
The culture of conducting the business operations has been drastically changed over the years in
terms of self-managed teams, re-engineering and, IT enabled works and many more. The
organisational objectives in context of all these points are to upsurge the learning among the
employees. Organisations in the current business context are focusing heavily on the learning
methods instead of delivering monotonous training to the employees. This is mainly due to the
fact that organisations have to adapt to numerous learning criterions mainly for the employees in
order to improve the organisation’s lifelong learning. It is very important for businesses
enterprises in the current competitive environment to emphasis on organisations’ intellectual
capital. This term determines the collective resources of the organisation which assist them in
achieving competitive advantages. It also involves the detailed analysis of company’s history,
procedures and customers.
This report will present the future strategic positioning of Premier Investments, which is
an Australian based company. The stated firm operates a range of retail fashion chains all over
Australia, New Zealand, Malaysia and Hong Kong. The report will outline the Premier
Investments’ competitive advantage and will also conduct a SWOT analysis. By using the
Porter’s generic strategies, the report will outline some recommendations regarding the future
strategic positioning of Premier Investments. At last, the report will also present the potential
financial and non-financial measures that will be used to evaluate the recommendations for the
Premier Investments.
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Competitive Advantage
Premier Investments Limited often termed as Premier Investments is an equity investment
company based in Australia. The company operates in mainly two segments such as investments
and retail. The investment segment is managed throughout the company. The main advantage of
Premier Investments is its organisational values. The company aims to aspire to leverage its
expertise and strong capital position in order to own and operate a selection of the retail,
consumer products and wholesale business (Low, 2017). The company also has holding in the
retail conglomerate, the Just Group and also holds more than 25% share in the electrical
consumer products manufacturer Breville group Limited. A competitive advantage is a situation
where an organisation is favourable or in a superior business position. During the year 2014, the
net profit before tax of the company was $106 million which was up of about 10.3% in the
previous financial year.
The continued improvement in the financial and operational performance of the stated
firm has been only through the continuous focus by the Just Group Board and Management on
the successful execution of the Premier Investments Limited transformation programme. The
company has core business priorities of continuous rejuvenation of its core apparel brands (Low,
2017). It also focuses in achieving and maintaining sustainable organisation and its wide cost
efficiencies. Its continued expansion in its online business also ensures that the firm is
internationally competitive. The other main advantage of Premier retail business is the expansion
of its Peter Alexander and Smiggle internationally.
Premier Investments SWOT analysis
Strengths
First, the major strength of the company is its core business transformation. With the business
transformation, there still remains a great deal of the potentiality in the Premier’s investment
portfolio of iconic brands and the Premier retail team are also committed in realising the stated
value for its stakeholders.
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Secondly, the expansion and success of Smiggle is one the strongest point of Premier
Investments Limited. The stated brand is getting continues support and positive response from
the customers. The specific brand is so successful in UK that management of Premier
Investments Limited is trying to enhance the number of stores in the UK from 16 to 25 by 2018.
Thirdly, the expansion of brand Peter Alexander is a great achievement for Premier Investments.
The brand commenced in 2014 with a strong vision for growing the brand across Australia and
New Zealand.
Fourthly, investment in the world-class internet and mobile sites allows the stated organisation to
reach huge number of customers. Premier investments have focused its investments in the key
areas that enhance the sales growth which includes the online stock availability, site
optimisation, and customer service and delivery arrangements.
Weakness
Firstly, the weak performance of the brands of the premier Investments such as Just Jays, Just
Jeans, Dotti, Portmans and Jacqui E. The poor performance of these brands is a major weakness
for the Premier Investments Limited.
Secondly, Premier Investments has negligible presence as compared to its competitors such as
Woolworths (Chang, 2015).
Thirdly, premier Investments have failed to sustain the competitive advantage due to failure of
some of its brands.
Fourthly, the entering into the online market resulted in competition of having low prices and
more experience.
Opportunities
Firstly, as stated by the Solomon Lew, the management of Premier Investments Limited has
great opportunity in increasing the global presence of the company’s iconic brand, Smiggle.
Secondly, it has announced to open 50 new stores across Hong Kong and Malaysia in the next
five years.
Thirdly, the firm has opportunity of growing rates and profitability (Chang, 2015).
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Threats
Firstly, rising cost of the raw materials for both clothing and children items has impacted the
company’s overall profit margins (Mitchell, 2016).
Secondly, the weak performance of the brands of the premier Investments such as Just Jays, Just
Jeans, Dotti, Portmans and Jacqui E. The poor performance of these brands is a major weakness
for the Premier Investments Limited. Having such weak brands will create negative impacts on
the brand portfolio.
Thirdly, maintaining a low cost operations and low prices in the economic recession scenario is a
great threat for the company.
Fourthly, the increased competition from the other retail stores and companies
Porter’s generic strategies
The relative position of an enterprise describes its profitability whether it is above or below
average. The fundamental basis of the above average profitability in the long run is the
sustainable competitive advantage. Mainly, there are two ways an organisation can possess
competitive advantage, mainly by low cost or by differentiation (De Kluyver & Pearce, 2009).
These two basic types of competitive advantage collaborate with the scope of activities for which
an organisation seeks to achieve them. A firm in order to achieve these leads to three generic
strategies in order to achieve above average performance in an industry. These generic strategies
are cost leadership, differentiation and focus. The focus strategy has two variants, namely, cost
focus and differentiation focus.
1. Cost leadership: In cost leadership, an organisation develops itself to become the low
cost producer in its particular industry. The sources of cost advantage vary and depend
upon the structure of the industry. In generally involves the economies of scale,
technology and preferential access to the raw materials and the other factors (Lindgren,
2012). According to this strategy, a low cost manufacturing organisation could find and
exploit the overall sources of the cost advantage. If an organisation could achieve and
sustain the overall cost leadership, then it will be able to perform above average in the
particular industry.
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Premier Investments Limited could drop the prices of its global kids retail store
chain Smiggle, as it has been a main contributor in the company’s revenue (Polo &
Weber, 2010). In order to gain the advantage of cost leadership, it is also important that
the stated organisation could sustain all its sources of cost advantage.
2. Differentiation: It differentiation strategy, every organisation aims to be unique in its
industry along with having some dimensions that are valued by purchasers. A
differentiation strategy demands for the development or creation of a product or service
that could offer unique attributes or are better from the products and services in the
competition. It is about making the product or service more and more attractive than the
competitors (Polo & Weber, 2010). In order to have success in differentiation strategy, it
is evident that an organisation must hold good research team, development and
innovation team and also possess the ability to deliver high quality products and service.
For Premier Investments Limited, in order to pursue for a differentiation strategy,
it is important that the stated firm agile in its new product development process. It is
important for the Premier Investments top have highly skilled and creative product
development team which can maintain the corporate reputation for the quality and
innovation.
3. Focus Strategy: The focus strategy of Porters competitive strategies concentrates on a
narrow segment and within that segment attempts are made to gain a competitive
advantage or differentiation. Organisations that utilise the focus strategies emphasis
mainly on a particular niche markets (Umurzakov, 2017). By understanding the dynamics
of that market segment and by understanding the unique needs of the consumers within it,
and by developing a low-cost or well-specified product or service, an organisation could
execute the focus strategy. Organisations that serve customers of a specific market
segment, tends to build a strong brand loyalty amongst the customers.
It is essential for premier Investments limited to choose whether it wants to
implement the cost focus or the differentiation focus in order to develop a successful
focus strategy. If Premier Investments are able to get success in the focus strategy, then it
will be able to create a broad range of product developments strengths but for a relatively
narrow market segment, which the company understands very well.
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It is not necessary that these generic strategies are compatible with one another. If Premier
Investments Limited wants to achieve an advantage on all the fonts, then it may be possible that
company gets no advantage at all. If premier Investments differentiate itself by delivering a very
high range of quality products, then it will risk the quality of becoming a cost leader. According
to Michal Porter, a business enterprise must not focus on all the three generic strategies. To be
successful over a long period of term, it is important that Premier Investments Limited must
select any one of the three generic strategies.
Potential Financial and Non-financial measures
Financial Performance
Measuring the business financial performance is a crucial part in running and growing a
business. Many organisations fail due to the poor financial management or planning. The success
of a business could depend on the development and implementation of solid financial and
management systems. It is important that organisations update its original business plans to get
the desired growth. Measuring the financial performance can help Premier Investments in
reassessing its business goals and plan effectively for improving its business. Some of the steps
to measure the financial performance are:
Cash flow: This is the balance of all money that flows in and out of a business. It will be
important for premier Investments to ensure that its cash flows are regularly reviewed and
updated.
Working Capital: the requirements of Premier Investments have changed. Thus, it will be now
important for Premier Investments to assess how the changes are compared to the industry
standards.
Growth: premier Investments limited will require adapting its financing situations in order to
meet the organisational objectives (Batholomeusz, 2017).
Non-Financial Performance
Brand Preference: This measurement will help the premier Investments to understand its
current position in the market and also for its products and services in relation to its competitors.
The main goal for the organisation would be to learn how it is offering products to its customers.
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Customer Retention: it is evident that every customer-oriented organisation focuses in meeting
the customer satisfaction, but it is important to understand how to meet the customer satisfaction.
It is important for the Premier Investments to retain its existing customers.
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Conclusion
It has been found in the report that Premier Investments Limited could drop the prices of its
global kids retail store chain Smiggle, as it has been a main contributor in the company’s
revenue. In order to gain the advantage of cost leadership, it is also important that the stated
organisation could sustain all its sources of cost advantage.
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References
Batholomeusz, S. (2017, March 21). Solomon Lew’s Premier Investments swims against the
retail tide. The Australian. Retrieved from http://www.theaustralian.com.au
Chang, O. (2015, October 10). Smiggle is going global. Business Insider Australia. Retrieved
from https://www.businessinsider.com.au/
De Kluyver, C., & Pearce, J. (2009). Strategy. Upper Saddle River, N.J.: Pearson/Prentice Hall.
Lindgren, P. (2012). Business Model Innovation Leadership: How Do SME’s Strategically Lead
Business Model Innovation?. International Journal Of Business And Management, 7(14).
http://dx.doi.org/10.5539/ijbm.v7n14p53
Low, C. (2017, March 22). Premier pegs Smiggle’s next international territory. The Sydney
Morning Herald. Retrieved from http://www.smh.com.au
Mitchell, S. (2016a, September 22). Premier Investments cracks $1b sales as profits survey 18
pc. Australian Financial Review. Retrieved from https://www.afr.com.au
Mitchell, S. (2016b, March 30). Solomon Lew first Australian inducted into World Retail
Congress Hall of Fame. The Sydney Morning Herald. Retrieved from
http://www.smh.com.au
Polo, E., & Weber, W. (2010). Competitive Generic Strategies Evolution and the Importance of
Michael E. Porter. Revista De Gestão, 17(1), 99-117. http://dx.doi.org/10.5700/rege389
Umurzakov, S. (2017). Business Process Management in Financial and Non-Financial
Institutions: Payment Process Modelling in Financial Flows
Management. INTERNATIONAL JOURNAL OF MANAGEMENT SCIENCE AND
BUSINESS ADMINISTRATION, 3(5), 50-5. http://dx.doi.org/10.18775/ijmsba.1849-
5664-5419.2014.35.1006
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