laura ashley holdings plc article

Essay Topics: Johnson Scholes, SWOT Analysis,
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1) How have adjustments relating to managing and efficiency structural influenced a global company of your choice, over the last 75 years. Relate your findings to growth, distribution, and different external impact on and tactics.

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2) Carry out a SWOT analysis and explain its relevance with regards to your company and/or its sector

Word Rely 1250. Harvard Style Referencing. Bibliography Required.

Global organisation Laura Ashley Holdings Plc has suffered varying fortunes since Bernard and Laura Ashley founded that in the 1950s. It is often involved in the creating, manufacturing, division and providing of garments, equipment, perfume, gift items, fabric, wall coverings, bed linens, lighting, and furniture.

Famous for its flower prints, the chain was highly effective during the early and middle 1980s although things altered in the early 1990s once various management and strength problems and also those concerning growth, circulation, and numerous external impact on such as global recession come up

Laura Ashley herself died in 85. There is a noteworthy difference inside the organisation about and after this yr.

About 1985, it was a simply structured, steadily expanding business operating in a non-complex environment (complexity occurs when there are many complicated environmental influences [Johnson and Scholes, 1989]). In the months and years after, many alterations took place. Laura Ashley went public in flotation, bought other companies associated with areas such as knitwear and perfume, built heavier investments in manufacturing and information technology (IT), moved toward segmentation with Mother and Child retailers, exclusively residence furnishing retailers and product shops (franchise operations). The organisation transferred gradually from vertical incorporation (it had always manufactured and shipped all goods itself) ” The Guardian reported that Laura Ashley was pulling out from production by the end in the year over 10 years ago.

In order to help growth, there were a change from the basic functional organisational structure into a more complex divisional structure (which wasre-organised with every change of leadership). The most known chief professionals of Laura Ashley who had been in place whilst and after problems developed were Jim Maxmin (1991-1994) and Ann Iverson (1995-1997). Each of these people were accountable for major overhauls within the enterprise. Vora (1998) states, “Laura Ashley provides undergone various restructuring approaches and umpteen management upheavals, all with no success, and all of that have decimated shareholder value and abused the brand name name.

While highlighted previously mentioned, the major problems of Laura Ashley started to manifest in the late 1980s and early nineties. The initial fall of profits had been reported back in to January 1989. It is crucial, then, to consider its success just before this ” from its start in the 1950s to 1985. A specific area to the natural way consider is the key success factors of the company for this period i. e. what particularly can its success is related to. Key success factors will be what a great organisation must do well in in an attempt to be successful, end up being an effective rival and fulfill stakeholder requirements (Thompson, 1997). Bearing this in mind, the real key success elements of Laura Ashley about 1985 are identified as good quality production, impressive designs, very good brand administration (the ‘Laura Ashley’ brand was and it is strong), very well placing of stores, creation of good atmospheres in stores, standard design and creative competencies, staff schooling, creation of the vertically bundled structure and operation in a simplistic organisational structure generally speaking.

Also, the Group’s IT capabilities was taken into consideration by the success as it was a source of competitive advantage elizabeth. g. they were an early essayer of electric point of sale (Heath, 1996 since cited by simply Johnson and Scholes, 1999). These elements may also be construed as proper excellence positions (SEP’s), which can be described as the capabilities, which usually allow an organisation to make better than typical results in assessment with competition (PUmpin, 1987).

Thompson (1997) presents a really useful model that can be attractive explaining the achievements of Laura Ashley up to 1985. The EVR congruence unit, by Thompson, considers in the event that an organisation will be managed effectively with regards to strategy. It presents the complementing of an organisation’s resources (for Laura Ashley these would include vegetation, vehicles, THIS systemsand locations) to the crucial success elements dictated by the environment (external factors such as opportunities and threats, stakeholders, competition etc). A determinant in matching these may be the values from the organisation (again, in the case of Laura Ashley, these types of would range from the lifestyle they will promote/project, shop designs and atmospheres, item designs, the manufacturer, staff schooling policy and the ‘family’ culture). If the congruence (fit) between these 3 areas is excellent, then this means that effective administration of resources (Hamel and Prahalad [1993] comment that it can be important for organisations to manage methods well in so that it will achieve objectives), strategy formula and all-round success.

It can be argued the fact that success of Laura Ashley up to 1985 can be attributed to greater EVR congruence. That is such things as the quantity of shops and plants, distribution systems, stakeholders, threats (including competition), items, level of up and down integration and so on fit together well in relation to the scale, structure, lifestyle and velocity of regarding the enterprise then. The key success factors are also a sign of this congruence.

So that they can end up being developed to help ensure the two present and future achievement, it is important crucial success elements are recognized and recognized. One particular approach Laura Ashley could do that is through a SWOT analysis. This testimonials an organisation’s internal pros and cons and possibilities and threats in the exterior environment (Cole, 1996). This might be done for a moment in time or as an understanding encompassing the past and present. As made clear, Laura Ashley has confronted much transform during its existence. Opportunities and risks come about because of constant change and the SWOT analysis can help identify these types of and inside strengths and weaknesses relevant when dealing with change (Johnson and Scholes, 1989).

This SWOT analysis can be utilised in relation to analysing the problems faced by Laura Ashley back in the 1980s and throughout the 1990s. They can be tremendously attributed to the weaknesses and threats recognized. For example , changes in the economy had a knock-on influence on the sale of property and therefore on the sale of household fixtures. Also, excessive borrowing, wastage and forced discounting meant that, inspite of sales boosts, shops had been making a loss. The reorganisations 23 years ago, 1991 and twice in 1995 experienced their result too ” they were pricey and featured inefficiency. Chandler (1977) says that constructions are not modified until pressure of ineffectiveness forces the change and this this modify process is generally a painful one particular ” typically carried out by another type of chief executive each time. Upon along with his visit in 1991, Rick Maxmin found that the enterprise lacked a core identification, clear strategies, empowered staff, thorough researching the market, efficient logistics, and many concerns in the US including limited expansion, poor supervision and delivery problems.

He responded with his ‘Simplify, Target and Act’ programme. This kind of included reorganisation, institution of a Global Operations Executive (GOE) and Global Collection Creation (GCD) which usually aided globalisation and advertising, encouragement to empower personnel, an connections with National Express Organization Logistics to improve delivery and distribution devices, sourcing half the organisations manufacturing tothe China (rather than in-house in Britain) and management alternative in the US. Ahead of leaving Laura Ashley in 1994, John Maxmin left a comment that “throughout the entire company, people features embraced the principles of the Easily simplify, Focus and Act plan and set about sorting out the operational complications which have affected Laura Ashley (Maxmin, 1993 as cited by Warnaby, 1994).

Ann Iverson was appointed leader of Laura Ashley in 1995. The girl was to spearhead the rush into the US and revamp the product range (Teather, 1999). Her observations found various challenges ” all of these can again be caused by identified weaknesses. It was discovered that the range of products was as well broad, there is no ‘unified’ look to meet globalisation, the provision chain was inefficient and problems extended in the US. Ann Iverson’s response included strengthening the connections with Federal government Express Business Logistics, opening larger retailers in the US and reviewing marketing and sales. These types of changes had been considered to be very good as Laura Ashley restored dividend repayments in mil novecentos e noventa e seis for the first time for more than two decades. Ann Iverson was dismissed in 97, however , mainly due to carrying on problems in america and the organisation’s image (Keynotes, 1997).

Each of the changes stated came about through the organisation’s particular strengths (as identified) at the moment. For example , whilst such things as restructuring and shop closures had been happening, the strong identity of Laura Ashley and strong consumer loyalty had been greatly trusted. Bowman and Asch (1987) comment that the strengths associated with an organisation really are a if not really the determinant in how it handles weaknesses, chances and dangers.

Opportunities available to the organisation in dealing with the various problems can be referred to as the chances in the SWOT analysis. Opportunities change and differ with time. For example , the alliance with Federal Exhibit Business Logistics resulted from available possibilities at the time. Any opportunity inside the early 1990s would have been a faster move away from vertical incorporation for example.

Laura Ashley started to be totally top to bottom integrated in the early 1970s and continuedto be thus though steadily moved from this in the 1990s ” completely more than a decade ago. Vertical integration can be back e. g. manufacturer purchasing/owning supplier and forwards e. g. producer purchasing/owning store ” Laura Ashley was both backwardly and forwardly vertically built-in ” everything from the supplying of elements and making to division and selling. The main benefits associated with this through the entire organisation’s creation included increased control, higher ability to identify, the opportunity to accomplish economies of scale (higher margins), peace of mind of supply and greater synergy. Despite this, there were several disadvantages especially that it was costly and tremendously increased operational leverage as well as the need to sustain technological transform.

This tied up capital having long-term affects. It resulted in there was not full attentiveness of essential strengths (design and retail) on which important success elements are dependent (Thompson, 1997). Furthermore, top to bottom integration was inflexible (cheaper manufacturers could not be sourced) and awareness to diminishes in revenue increased. It was the cost aspect that experienced the greatest effect ” particularly in the face of pricey expansion (especially in the US). Warnaby (1994) comments that vertical integration was responsible for financial challenges in the early on 1990s. The expense of up and down integration recently had an impact on the organisation’s ability to successfully grow internationally.

Maybe with the exception of an exceptional product appear and the ownership of a divisional structure, Laura Ashley did not expand internationally applying Treadgold’s keys/strategies ” each was applied/introduced incrementally as concerns arose to highlight the need electronic. g. it was not until 1995 once Ann Iverson felt the need for a single product seem. This is indicative that the company was not specifically capable of embarking on this sort of ambitious worldwide expansion mainly because it did. This can be highlighted by numerous complications faced by organisation electronic. g. poor marketing/marketing strategy, inefficient logistics and insufficient direction and clear technique. Additionally , the paternalistic administration style had not been suited to rapid expansion which coupled with large finance needs from vertical integration, reorganisation and early acquisitions even more indicate poor planning with regards to development

Laura Ashley provides faced a lot of problems through its existence. Problems due to management, efficiency structure, strategies and speedy international development continuously came and gone. In 1998 individual bankruptcy looked impending but an injection of? forty-four million in equity capital by Malaysian businessman Doctor Kay Peng Khoo (giving his MUI property firm 47. five per cent share ownership whilst the Ashley family retained just 9% [Gibbs, 1999]). This individual installed Ng Kwan Cheong as chief executive who built changes such as the disposal in the problematic American franchise (retail operations were sold to a management acquistion team to get $1 at the conclusion of Come july 1st, 1999 [Gibbs, 1999]), targeting of young markets and investment in e-commerce (Abdullah, 2000).

However , all of these alterations looked to obtain no main impact inside the Group’s success with sales steadily reducing from 98. Whether or not Laura Ashley manages to achieve the type of success that enjoyed more than 30 years ago under it is new supervision remains to be seen ” as does their survival. Leader Ng Kwan Cheong refrained from inserting false desires, commenting in March of 2000 ” “We have got a lot of things to complete. All I can say can be we are transferring the right direction and everything is changing (Cheong, 2000 while cited by simply Abdullah, 2000).


Text messages

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Chandler, A. D. (1997). ‘The Noticeable Hand: The Managerial Wave in American Business’. Harvard University Press.

Cole, G. A. (1996). ‘Management Theory and Practice’ (5th Edition). Letts Educational.

Johnson, G. and Scholes, K. (1989). ‘Exploring Corporate Strategy: Text and Cases’. Prentice Lounge.

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Journals and Magazines

Hamel, G. and Prahalad, C. K. (1993). “Strategy since stretch and leverage. Harvard Business Review, 71, March-April, pp75-84.

Keynotes (1997), ‘Keynote Industry Report ” Clothing Retailing’, 1997 Reviews, p23.

Treadgold, A. (1991) ‘Dixons and Laura Ashley: Different Routes to International Growth’. International Journal of Price tag and Distribution Management. Vol. 19(4), pp13-19.

Warnaby, G. (1994). “Laura Ashley ” An International Retail Brand. Management Decision, Volume 32 (3).

Various other

Abdullah, S. A. “Turning about Laura Ashley. (09 December 2000).

Gibbs, G. (1999) “Laura Ashley bids farewell The Guardian Unlimited Organize.,4273,3904775,00.html (18 December 2000).

Teather, D. (1999) “Banks press Laura Ashley to quit US The Guardian Unlimited Organize.,4273,3855892,00.html (18 December 2000).

Vora, T. (1998) “Lessons from Laura Ashley. The Motley Deceive: The Daily Fool, Night Fool ” Tuesday, 03 March 98, (online) (cited 04 January 2001).


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