Free Custom «Laura Ashley Holdings» Essay Paper

Laura Ashley Holdings plc (Laura) is a UK based company principally engaged in the business of fashion and home furnishings. The company focuses on the design, manufacture, distribution and sale of clothing, accessories and home furnishings. The company operates 231 stores in the UK under four principal formats, namely, mixed product stores, home stores, home concession stores and clearance outlets (Abdullah, 2000). In addition, the company also engages in mail order and e-commerce activities in the UK. Further, Laura operates 230 franchised stores across 26 countries worldwide. Recently, the company opened 6 new stores while closed three stores. The company is headquartered in Fulham, London, and the UK.

FACTORS CONTRIBUTING TO LAURA SUCCESS

Finally in 1991, an American manager, Jim Maxmin, was brought to the position. Maxmin, who later stated starkly that the company had been 'heinously mismanaged,' embarked on a program of cutbacks, reorganization, and realignment. Believing that Laura Ashley's real strength lay in its quality as a brand, rather than its status as a retailer, Maxmin sought to concentrate on the company's strengths--creating popular designs in clothing and furnishings--and to extricate it from those activities in which its record was less favorable (Baharuddin& Fazilah1999). To this end, he contracted out most manufacturing and distribution operations. The latter was achieved via an alliance with Federal Express, in a move to reduce expensive inventories and improve stock movement (a perennial problem area for Laura Ashley, which had on one occasion shipped its winter stock to the United States two months late.) Staffing levels were cut and managers were encouraged to take a more hands-on approach to retailing operations. They were required, for instance, to periodically visit shop floors and endure stints on the customer complaint line. Maxmin's strategies were successful, and Laura Ashley worked its way back to a slight profit in 1992--93 after several years of losses. Recovery continued steadily, though it was slowed by lingering difficulties in the American market.

 

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LAURA ASHLEY STRATEGIC PROBLEMS

In 1990, the company had plummeted sharply into the red and was at serious risk of a takeover bid. What had gone wrong? Part of the trouble arose from the general economic situation--many British companies suffered in the economic recession of the late 1980s. The company's performance in the North American market was particularly troubled, bedeviled as it was by an unnecessarily complicated, top-heavy structure, excessive overhead and inventory costs, and an inadequate allocation and distribution system that was exacerbated by deficient communications methods( Gilchrist 1995). By July 1997, however, shares of the company were at their lowest in more than six years and Iverson's design director also had resigned. The company hired outside consultants to help it 'rediscover its distinctiveness' in August, while analysts were beginning to attribute the failure of Iverson's strategy to bad recruitment, bad merchandising, and over-aggressive expansion

SOLUTIONS TO THE PROBLEMS

The new Laura Ashley, Inc., headquartered in Boston, began remodeling almost immediately to turn its large stores into intimate boutiques. As part of its strategy, the company began to beef up its brand-licensing program in home furnishings and planned to increase this category of products from 45 to 60 percent (Daily Telegraph 1994).Ng Kwan Cheong then led the company to restructure its product and price range and to carry out a study on customer expectations. Examining the company's supply chain, he expanded its number of suppliers. Looking at advertising, he branched out from promotional to brand advertising. By the end of 1999, Laura Ashley had posted a solid rise in sales and gross margins over the Christmas period. In 2000, the group expanded its home furnishings units in many of its stores and began plans to open additional stores in France and Germany and to develop an online shopping facility (Price &Christopher1997)

CONCLUSION

In an effort to improve its global distribution system and thus enhance customer service in its shops around the world, Laura Ashley entered into a path-breaking strategic alliance with Federal Express Business Logistics Services. Under the terms of a loosely structured partnership, Federal Express essentially takes over the warehouse and distribution activities formerly handled by Laura Ashley. The alliance is path breaking due to its largely informal structure, based more on trust and mutual benefit than on complicated rules and measures.

PERSONAL REFLECTION

The assignment gave the author the opportunity to explore  the business environment and gather information on how to acquire the SWOT analysis so that your business  acquire full potential in this competitive business world. Overall the author had affirmed a basic knowledge of strategic management.