Laura Ashley Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Laura Ashley Case Solution

Introduction

The case analysis has been done using an internal and external environmental scan for both the players involved in the strategic alliance. A value chain analysis has been done using the results of the internal and external analysis and then strategies have been suggested for taking the alliance forward.

Environmental Scan: SWOT Analysis

SWOT Analysis for Laura Ashley: As per the SWOT analysis of Laura Ashley (appendix 1) its strengths are its timeless appeal in the clothing business and its differentiated segmentation on the basis of lifestyle rather than on demographics. The company’s typical customer is not fashion forward but looks for quality in fashionable clothing. This means that the company does not have to worry about competing against the typical competitor who needs to remain updated with new fashion trends. This provides an opportunity for easier inventory management as there is lesser threat of obsolete trends.

The typical customer is generous but not extravagant which suggests that Laura Ashley cannot increase its prices beyond a certain limit. This means that the company must be looking towards better cost management in order to achieve higher margins and profitability. This could be perceived as a threat too since the external environment is price elastic.
The company’s strengths further include its high level of in-store personal service and the ability of the staff to develop a personal rapport with clients. This is a weakness in the long run for the business since this would mean losing out this aspect of personalization if the clothing business expands beyond a certain limit.

Weaknesses include cash flow problems, difficulty in managing logistics, high costs of transportation and inefficient working capital management.

There are opportunities in the form of gaining better insight into the traditional customer’s lifestyle. In addition to this, the lack of standardization in range especially with only 5% of the range common to all stores worldwide also provides an opportunity in terms of bringing more uniformity in styles. This could lead to economies of scale and better cost management for raw material purchases leading to higher margins in the long run.

Further weaknesses could be seen in the form of a repetition in product lines in addition to the brand being too dependent on it traditional customer base.

SWOT Analysis for BLS: A SWOT analysis for BLS shows that its strengths include its renowned brand name for logistics and tracking. The company’s effective worldwide distribution is also its major strengths. A strong foothold in the Far East suggests that it is an opportunity for expansion in terms of diversification or forming strategic alliance. This can also be identified as an opportunity for expansion for the newly formed strategic alliance.

BLS also has weaknesses as suggested in the SWOT analysis (appendix 1). The company only has a small proportion of business in Europe and its operations in this region are unprofitable. The operating margin is also going down in Europe which indicates that expanding in Europe using the past strategy has not worked out well for BLS. The company’s reputation for quality services and its ability to offer customized logistics makes it unique.

Threats could exist in the form of individual businesses offering warehousing, management systems or transportation since customers may not be requiring a suite of these three services. Opportunities can be seen for FedEx in its current clientele in the automotive, computers, toys and consumer electronics industry. With the newly formed strategic alliance, BLS’s current clientele could be used to further expand opportunities for Laura Ashley...............

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