Laura Ashley and Federal Express Strategic Alliance Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

There are few risks related to the strategic alliance between Laura Ashley and Federal Express.As the failure of strategic alliance would result in negative consequences for both companies. The strategic alliance risks for the Laura Ashley include continuous ineffectivenessor worst of the distribution system and its entire operations infrastructure will be badly affected by the failure of strategic alliance(Chart 1) Whereas, one of the risks that the strategic alliance contain for the Federal Express isit affects the value of its reputation of reliability. In addition to this, if the strategic alliance fails then it would be a tremendous setback for the BLS division in the long term (Chart 2).

The partnership between Laura Ashley and Federal Expressis based upon the loose structure that will permit it to evolve in the right directions. Moreover, the reason to keep the structure of the strategic alliance loose was to keep the focus of both companies on the strategic nature of their alliance partnership. Furthermore, there is no penalty for failure to perform was included in the structure of the partnership. Also, the partnership structure is based on the philosophy of “Agree to agree” in order to avoid the problems thatwould arise while doing business. The outcomes of doing business together are not defined visiblyas well as there are no performance based incentives.

The loose nature of the partnership has both advantages and disadvantages. The loose structure motivates win –win environment and empowerment in doing the business. In addition to this, another benefit of loose structure is that it has flexibility and adaptability. Whilethe loose structure of strategic alliance lacks specific direction as well as it also lacks plan of contingency. The more structured approach should be taken by Laura Ashley and Federal Express for their strategic alliance as the loose nature of the partnership isnot appropriate.

For the partnership, both the companies should need to be focused on the length of the contract as thereis no end point mentionedfor the strategic alliance. They also need to include the incentive and penalty programs in order to enhance the motivation throughout the LA Distribution LTD. On the basis of financial arrangement of the strategic alliance, Laura Ashley would pay the direct costs that Business Logistic Service (BLS) incurred in order to manage the LA’s global logistic requirement. Also, LA would pay BLS for freight and for a management fee. These financial arrangements of partnership make sense as it involves simplicity.

The success of the strategic alliance mainly dependsupon the stability and decision making skills of the leadership. The leader must obtain the new ways in order to inspire and motivate people throughout the company towards higher performance. The leadership must have problem solving and decision making skills in order to implement strategic alliance successfully. Additionally, the leaders also need to have effective communications and conflict resolution skills that help in doing the business jointly. The leadership in the strategic alliance also requires to utilize the resources and assets of both the companies in an efficient way that add more value to the strategic alliance (Chart 3).

The extensive and real benefits from the strategic alliance increase the likelihood that the partnership will succeed over the long term. Additionally, strategic alliance also provides both the companies with the chances to increase the growth and profitability of their business in the long run by gaining the competitive advantage (Chart 1 &2). The joint planning of business and sharing of right information is essential in order to make it successful for both the companies.Futhermore, creation of new management system for new company, the integration of existing system along with the ongoing assessment of the partnership is also required to make the strategic alliance successful. The building trust among both the companies as well as their focus on the areas of mutual interest are also important factorsthat will make the partnership successful in the long term.

There were various organizational as well as human resource policy improvements that would enhance LA’s performance .The complete program was made under the strategic alliance for the induction and training of the employees can play an important part in the enhancement of Laura Ashley performance as training would help all the employees to increase their capabilities, learning and skills. In addition to this, the implementation of Service Quality indicators would also help the Laura Ashley to improve its performance in term of profitability and productivity as it allows to measure the progress of company’s business activities and operations. Likewise, the restructuring of Laura Ashley and creation of an integrated system are some other features that are most important to the performance enhancement...................

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In an effort to improve its global distribution system and, consequently, improve customer service in its stores around the world, Laura Ashley entered into an innovative strategic alliance with Federal Express Business Services Logistics. Under the terms loosely structured partnership, Federal Express essentially takes over the warehouse and distribution activities previously handled by Laura Ashley. The Alliance is an innovative thanks largely informal structure based more on trust and mutual benefit, than the complex rules and measures. "Hide
by Gary W. Loveman, Robert T. Anthony Source: HBS Premier Case Collection 14 pages. Publication Date: 08 Oct 1992. Prod. #: 693050-PDF-ENG