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Premier Investments: An Overview

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.

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.     

SWOT Analysis of Premier Investments

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.   

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.   

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.  

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).  

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.

Porter's Generic Strategies for Premier Investments

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

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.

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.

Measuring the Financial Performance of Premier Investments

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.

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.        

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).

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.

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.

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.

References

Batholomeusz, S. (2017, March 21). Solomon Lew’s Premier Investments swims against the retail tide. The Australian. Retrieved from https://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). https://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 https://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 https://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. https://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. https://dx.doi.org/10.18775/ijmsba.1849-5664-5419.2014.35.1006

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