Strategic Management Report: Zara and Premier Investments Analysis

This report offers strategic recommendations for Zara and Premier Investments, focusing on enhancing their competitive advantage in Australia. It analyzes business-level strategies, such as diversification and value pricing for Zara, and better targeting and channel differentiation for Premier Investments. Corporate strategies include online retailing and packaging for Zara, and merger and acquisition along with social media presence for Premier Investments. Innovation strategies involve build bridges and open source for Zara and technological improvement and human sensibility for Premier Investments. The report aims to improve business performance and profitability for both companies, addressing issues like high operational costs and market competition, with detailed recommendations for implementation and performance monitoring.

Strategic management

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Executive summary
The report helps in providing recommendations to Zara and Premier Investments Companies of
Australia for reducing their business risk and improving their competitive advantage in Australia.
The recommendation provided is based on innovation, corporate and business level strategies so
that they can build appropriate solutions for reducing the issues faced by them. Considering the
business strategy, the Zara firm should use diversification of products and value pricing
strategies, whereas the other firm should use better targeting and channel differentiation strategy.
In addition, for the corporate strategy, the Zara firm should follow online retailing and packaging
along with marketing strategies while Premier firm should use merger and acquisition and active
presence in social media strategy. Lastly, for the innovation strategy, the Premier Investment
firm follows technological improvement and human sensibility to develop wide range of
products following current market trends. Besides this, Zara should use build bridges and open
source with co-creation prospect strategies as per their innovation strategy for enhancing their
market share in Australia. All these recommended strategies enables both the selected fashion
retail companies to improve their business performance and business profitability in the selected
country market.

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Table of Contents
Introduction...............................................................................................................................................3
Aim of the report...................................................................................................................................3
Background of Zara Company.............................................................................................................3
Background of Premier Investments Company..................................................................................3
A summary of the paragraph...............................................................................................................4
Business level strategy...............................................................................................................................4
The business level strategy of Zara......................................................................................................5
The business level strategy of Premier Investments............................................................................5
Corporate strategy.....................................................................................................................................6
Corporate strategy of Zara...................................................................................................................6
Corporate strategy of Premier Investments........................................................................................7
Innovation strategy....................................................................................................................................8
Innovation strategy of Zara..................................................................................................................8
Innovation strategy of Premier Investments.......................................................................................9
Conclusion................................................................................................................................................10
References................................................................................................................................................11

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Introduction
Aim of the report
The paper aims to provide recommendation on the business strategy, innovative and corporate
strategy of the two leading fashion companies in Australia. The two companies selected for this
study are Zara and Premier Investments. The main reason for providing the recommendations is
to reduce their problems for higher cost of operations in business as well as the intense
competition rate of the Australian market.
Background of Zara Company
Zara is a Spanish fast-fashion retail chain company that has extended its business in Australia for
enhancing double-digit sales growth. It is considered as the highest and leading international
fashion chains of Australia that sells footwear, clothing and accessories for the people of
Australia. Zara has extended its business in Australia since 2011 and has introduced 18 different
stores at the end of January in 2017. A total number of 1700 employees are currently working in
this firm in Australia that increased the sales rate of Zara by 256.36 million dollars in January
2017 (Heffernan, 2017). Currently, the firm introduced three new stores of which one is located
in the Sydney suburb of Parramatta; others are located in Brisbane and the Gold Coast.
According to the CEO, the firm will increase its staff members by 600 in the upcoming 12
months. It is analyzed that the firm has increased its sale rate every year by 15.5% that increased
the profit at 4.96 million dollars each year. Commitment and quality of fashionable goods
enhanced their growth in this international market.
Background of Premier Investments Company
Premier Investments is an ASX company in Australia that provides clothing goods for the people
of Australia. The company also provide Investments vehicle, but their main income growth is
coming from this retail clothing sector. The CEO and the Chairman of this firm are Mr Mark
Mclnnes and Mr Solomon Lew. In 2018, the firm increased its total revenue by 1.19 billion
dollars and currently 9000 number of employees are working in this company (Premier
Investments, 2019). In Australia, the firm has approximately 600 outlets, and they mainly focus
on the younger age of people, including both men and women. The firm makes fashionable
clothing item so that they can easily attract their chosen consumer base of the Australian market.

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A summary of the paragraph
The content of the paper is divided into five different sections that provide recommendations
based on the several strategies in an organized manner. Paragraph wise summary will help the
reader to understand the main content of the report.
Paragraph 1: Introduction
In this paragraph, the whole skeletal structure of the report will be described briefly. In addition,
the aims and background of the companies that have been selected for this study will also be
further briefly discussed in this part.
Paragraph 2: Business level strategy
In this paragraph, the recommended business-level strategy of both Zara and Premier
Investments companies are provided. The strategy is provided based on their business structure
and the operations that have followed for surviving in Australia.
Paragraph 3: Corporate Strategy
With the help of this paragraph, the corporate strategy that should be advantageous for both
Premier Investments and Zara Companies has been recommended. The strategies help the
companies to increase their competitive advantage in Australia.
Paragraph 4: Innovation Strategy
In this paragraph, the innovation strategy that should be applied by both the selected companies
has been discussed. The innovation strategy will be recommended in such a manner that it easily
decreases its cross-border business issues and increases its market share and consumer base in
the selected Australian market.
Paragraph 5: Conclusion
It is the concluding paragraph that provides overall thoughts of the researchers in relation to the
strategy that has been recommended to the selected fashion retail companies of Australia.
Business level strategy
The business level strategy is used for achieving the strategic competitiveness of the business so
that the companies can enhance their above-average returns (Alexander, Nobbs & Varley, 2018).

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Therefore appropriate business level strategy should be recommended for these fashion
companies so that they can satisfy their consumer desires and increase their value in the business.
The business level strategy of Zara
The business level strategies that have been recommended for Zara fashion retail firm are as
follows:
Diversification of products
Zara is a leading international fashion brand, and thus, diversification of products is one of the
beneficial business-level strategies of this company. The fashion brand has enough capabilities,
resources and core competencies that help them to diversify their product range as per the market
trend easily (Grimmer, Miles, Byrom & Grimmer, 2017). It is recommended that the firm should
follow value-creating diversification strategy where they focus on the sales volume of the
business and block their competitors through multi-point analysis. In order to make
diversification of its products, the firm has to add more designs on their fashionable goods so
that it can easily attract their targeted consumer base of Australia. By introducing more designs,
they can improve their sales growth, which overall enhances their business profit in this country
market.
Value pricing strategy
Another business-level strategy that should be recommended for Zara is the value pricing
strategy. By following this strategy, the firm should make a balance between the quality and cost
of their fashionable clothing products. It is seen that the firm manufacture high prices apparel for
their consumer and due to this reason most of the people cannot afford it. Thus it is
recommended that using this strategy; the company should sell their clothing goods at a
reasonable price so that every people can afford it (Chan, Ngai & Moon, 2017). Hence with the
help of this strategy, the firm increases its consumer number as well as improve its value in a
business that overall help them to enhance the performance of the brand in Australia.
The business level strategy of Premier Investments
The business level strategies that have been recommended for Premier Investments fashion retail
firm are as follows:

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Better targeting strategy by selecting De-Virtualize audience
After reviewing the company background, it is analyzed that the company focused on a younger
group of people in Australia as their targeted customer. Thus it is recommended that the firm
should increase the range of targeting consumer and manufacture clothing goods for all age
group people. For doing this, it is essential for the organization to invest a high amount of money
on their promotions. In order to make a better targeting approach, the company should properly
research the market for collecting appropriate detail regarding the needs of several age group
people (D’Alessandro, Miles & Bossomaier, 2019). This recommended strategy not only helps
the firm to enhance the production rate but also it enhances the customer numbers and people get
more attracted to the firm.
Channel differentiation
Channel differentiation is another business-level strategy that is recommended for this Premier
Investments firm. According to this strategy, the firm should make new designs of its distribution
channel that must be attracted by their newly targeted consumers. When a consumer orders a
fashion product, then they must take the responsibility to deliver it within time, and this can only
be possible when they make some differentiation in the channelling aspect (Bailey, 2019). In
order to make channel differentiation, the firm should make broad categorization of their
retailers, wholesalers and users. Proper categorization helps them to easily deliver the clothing
goods to their consumer as per the mentioned timeframe. Hence with the help of this strategy, the
firm increases the value and trust of their customer that help them to improve their business
performance level in Australia.
Corporate strategy
Corporate strategy is useful for gaining competitive advantage by any business, and it can be
achieved by managing and selecting a mixture of competing aspects in terms of several good
presence in the markets (Barraket, Furneaux, Barth & Mason, 2016). Thus by using these
strategies, both the fashion companies can achieve their goals and maintain their competitive
advantage with that of the similar companies in Australia.

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Corporate strategy of Zara
The corporate strategies that have been recommended for Zara fashion retail firm are as follows:
Online retailing
Online retailing prospects is one of the recommended corporate-level strategies that can help the
Zara firm to increase their competitive advantage in the fashion retail industry. According to this
strategy, the organization needs to add several numbers of online retailing options, which thus
enhances them to grab their consumer attraction towards their brand. In addition, following this
strategy, the firm can increase their business abilities and opportunities to explore the outlet to
the most number of people in Australia (Vracheva, Judge & Madden, 2016). Hence it is seen that
this recommended strategy enable the firm to maintain its competitive advantage with that of the
other similar firms in the market.
Packaging and marketing
Another corporate-level strategy that should be recommended to this Zara retailing firm is that
they should improve their packaging and marketing prospects. In today's environment, most of
the consumers are offended due to the rough packaging of clothing products (Sezer et al., 2016).
Due to this reason, it is essential for the company to improve its packaging aspects so that it can
satisfy their consumer base of Australia. In addition, they should change their marketing
prospects by arranging a campaign where they should easily promote their products and gain
consumer attraction towards them. Hence by using this strategy, the firm can improve its
competitive advantage in the market.
Corporate strategy of Premier Investments
The corporate strategies that have been recommended for Premier Investments fashion retail firm
are as follows:
Merger and acquisition
The merger and acquisition is the recommended corporate strategy that should be useful for the
fashion and retail company to improve its competitive advantage in Australia. If the firm makes a
partnership with several retail brands, then they can easily improve their marketing strategy as
well as enhance their productivity of clothing products (Razalan, Bickle, Park & Brosdahl,

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2017). The merger and acquisition strategy is beneficial for the firm as it helps them to improve
their strategic business plan so that they can enhance the overall market share of the company.
Due to this reason, it is recommended for this firm.
Active presence in social media
Another recommendation to this firm that based on corporate strategy is that the business should
increase its active presence in social media. In the current trend, social media is the playground
where every organization can showcase their products without facing any issue (Warren &
Gibson, 2017). Thus active presence in social media allows them to understand their consumer
needs, and they get feedback on their clothing goods range. Hence it is also a beneficial strategy
that can improve the competitive advantage of Premier Investments firm in this Australian
market.
Innovation strategy
An innovation strategy is used for increasing profits and market share of the business (Warren &
Gibson, 2017). It is considered as an effective strategy which is useful for fulfilling the desires
and demands of consumers.
Innovation strategy of Zara
The innovation strategies that have been recommended for Zara fashion retail firm are as
follows:
Build bridges
One of the innovation strategies should be the firm should build bridges among the several
fashion products that they manufacture in Australia. It is recommended that for building bridges,
the firm should introduce the clothing that based on several geographies, cultures and inclination
(Campopiano, Rinaldi, Sciascia & De Massis, 2019). By innovating the product range as per the
culture and geographical aspect, they can easily innovate their fashionable apparel and grab their
consumer attention. The recommended strategy also helps the firm to bridge the gaps between
the several culture people, and it overall increases their belief over the brand.
Open source with co-creation prospect

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Open source with co-creation prospect is another recommended innovation strategy that should
be useful for this Zara Company. With the help of this strategy, they can make disruptive
innovation by using their open source innovator prospects. By using this strategy, they innovate
their fashionable goods according to the market desires and easily satisfy their targeted
consumers (Macchion et al., 2017). It helps them to increase their market growth and share in
this Australian market.
Innovation strategy of Premier Investments
The innovation strategies that have been recommended for Premier Investments fashion retail
firm are as follows:
Technological improvement and human sensibility
It is recommended that the Premier Investments Company should improve their technological
aspects in such a manner that it helps them to fulfil each and every desire of their targeted
customer. By this procedure, they innovate their old fashionable apparel and make them as
trendy clothes that can attract the people to purchase it without any second thoughts (Bahng,
Yang & Reilly, 2016). With the help of this strategy, the firm also innovates a new way of using
the technology as per the human sensibility aspect. Hence it overall enhances the profitability of
the firm as well as it influences them to increase their market share in Australia.
Range of products following current market trends
Another recommendation based on the innovation strategy is that the Premier Investments
Company should increase its product range by targeting all groups of the consumer, including
children, younger and adult people. It is seen that the firm currently targeted men and women of
the younger generation but to increase the market share it is necessary for the firm to target all
generation people and make clothing products for them (Lin, 2018). Thus with the help of this
strategy, they can innovate their product range and manufacture several types of fashionable
apparel for their new targeted people of Australia.

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Conclusion
After reviewing the company background of the selected fashion retail organization of Australia,
it is analyzed that both the firms faced challenges in sustaining their competitive advantage and
increasing their business growth in this country. Following this, the paper has provided some
recommendations based on corporate, business and innovative strategies for both these fashion
retail companies. The business, corporate and innovation strategies are suggested in such a
manner that it helps the firm to overall increase their competitive advantage as well as business
growth in this country. It is analyzed that if the companies follows all the recommended
strategies, then it can easily improve their business performance, status and profitability rate of
their organizations in the current location where they generally operate. Hence it is seen that all
the recommended strategies are beneficial for both Premier Investments and Zara firm for
surviving fretfully in Australia.

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