LAURA ASHLEY & FEDERAL EXPRESS STRATEGIC ALLIANCE Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

LAURA ASHLEY & FEDERAL EXPRESS STRATEGIC ALLIANCE Case Solution

Problem Diagnosis

This case focuses on the strategic alliance which had been formed between Laura Ashley and Federal Express Business Logistics Services. This was a very crucial move for both the companies as this would make it possible for both the companies to approach new avenues. The case study shows that the most persisting problem faced by Laura Ashley had been with its ill equipped distribution system. This was the main reason due to which this major step had been taken within the pipeline of the company.
This global distribution system would ultimately enhance the customer service of the company. Moreover,the distribution system and the warehouse would be basically handled by Federal Express Business Logistic Services under the terms of this loosely structured partnership. The structure of this strategic alliance is largely informal as it is path breaking. This strategic alliance is based more on mutual benefit and trust rather than complicated measures and rules.

The main purpose of this strategic alliance was not to address the underlying weakness of Laura Ashley only but also of Federal Express Business Logistic Services. This case analysis examines the issues surrounding both the organizations, the details of the financial agreement, the advantages associated with the financial agreement, its risks and provides useful insights on why strategic alliance was chosen as the ultimate option for addressing the strategic issues of both the companies.

Analysis

A range of areas have been examined, assessed and analyzed but first of all the strategic issues faced by both the organizations have been examined as follows:

Strategic Issues faced by both Organizations

Before the strategic alliance was made in the year 1992, Laura Ashley’s profitability was strongly suffered and the profit margins of Laura Ashley had remained flat as shown in the exhibits attached. This showed that the management and the operations of the company were undergoing a number of internal issues which would have an impact on the future sustainability of the company. This all was despite the fact that the sales of the company had increased sharply from 1986 to 1990. These internal issues were therefore, having negative impacts on the earnings and the productivity of the company.

The thing which had caused concerns was that Laura Ashley had grown too rapidly and many new stores had been opened throughout North America and Europe. As a result of this rapid expansion, the ability of the management to control and manage their distribution systems and supply chain systems had been reduced. Therefore, at that point whatever the efforts were made by the management of the company to restore its profitability back on the past track, the actual impact on the profitability was minimal. As a result of this, the management of the company had to seek out a company which was a leader in the global distribution system and global supply chain management.

On the other hand, in the case of Federal Express, a new division had been started by the management of the company in 1987 with the name Business Logistics Services. This was basically a new entity at that time and it helped the other companies to basically outsource the management needs of their global supply chains. However, the problem in this case was that there were not many opportunities, which had approached the company and there were not many businesses seeking for this as hoped by the company...............

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