Laura Ashley Holdings Plc Essay

1) How have reassigns relating to heed and agreemental structural affected a global organisation of your choice, over the lead 75 years. Relate your findings to growth, distribution, and various external influences and strategies.2) Undertake a bone analysis and explain its relevance in relation to your follow and/or its sectorWord Count 1250. Harvard Style Referencing. Bibliography Required.Global organisation Laura Ashley Holdings Plc has suffered differing fortunes since Bernard and Laura Ashley founded it in the 1950s. It has been involved in the designing, manufacturing, distribution and selling of garments, accessories, perfume, gift items, fabric, w every(prenominal) coverings, bedding, lighting, and furniture. nonable for its floral prints, the chain was exaltedly succeederful during the earlyish and mid mid-eighties but things falsifyd in the early mid-nineties when various circumspection and structural problems as come up as those relating to growth, distrib ution, and various external influences such as global recession sur go ab surfaceLaura Ashley herself died in 1985. There is a notable disagreement in the organisation up to and by and by this year. Up to 1985, it was a app arently social structured, steadily leading organisation operating in a non-complex environment (complexity arises when on that point are numerous complicated environmental influences Johnson and Scholes, 1989). In the months and years after, more changes besidesk place. Laura Ashley went public in flotation, acquired other companies involved in areas such as knitwear and perfume, made heavier investments in manufacturing and information technology (IT), moved towards segmentation with make and Child shops, exclusively home furnishing shops and unit shops (franchise operations). The organisation moved in stages away from vertical desegregation (it had always manufactured and delivered all goods itself) The defender inform that Laura Ashley was wit hdrawing from manufacturing by the end of the year in 1998.In exhibition to facilitate growth, there was a shift from the simple functional organisational structure to a more complex divisional structure (which wasre-organised with every change of leadership). The most notable chief executive directors of Laura Ashley who were in place whilst and after problems true were Jim Maxmin (1991-1994) and Ann Iverson (1995-1997). Each of these multitude were responsible for major overhauls deep down the organisation. Vora (1998) states, Laura Ashley has undergone various restructuring strategies and umpteen management upheavals, all to no avail, and all of which have decimated shareholder pass judgment and abused the brand name.As high uplighted above, the major problems of Laura Ashley began to manifest in the late 1980s and early 1990s. The first fall of profits were reported in the year to January 1989. It is important, and then, to look at its mastery before this from its begi nnings in the 1950s to 1985. One area to naturally consider is the key victor factors of the organisation for this period i.e. what specifically provide its success is attributed to. Key success factors are what an organisation must do well in put together to be successful, be an effective competitor and satisfy stakeholder requirements (Thompson, 1997). Bearing this in mind, the key success factors of Laura Ashley up to 1985 are set as high quality crossroadion, innovative designs, good brand management (the Laura Ashley name was and is strong), well placing of stores, creation of good atmospheres in stores, general design and creative competencies, cater training, creation of a vertically integrated structure and operation within a simplistic organisational structure in general.Also, the Groups IT capabilities factored into the success as it was a source of competitive advantage e.g. they were an early adopter of electronic point of sale (Heath, 1996 as cited by Johnson and Scholes, 1999). These factors whitethorn also be interpreted as strategic excellence positions (SEPs), which laughingstock be described as the capabilities, which allow an organisation to produce better than reasonable solvents in comparison with competitors (PUmpin, 1987).Thompson (1997) presents a oddly useful model that can be helpful in explaining the success of Laura Ashley up to 1985. The EVR congruence model, by Thompson, considers if an organisation is being managed effectively with regards to strategy. It represents the matching of an organisations resources (for Laura Ashley these would accommodate plants, vehicles, IT systemsand locations) to the key success factors dictated by the environment (external factors such as opportunities and threats, stakeholders, competition etc). A determinant in matching these is the values of the organisation (again, in the case of Laura Ashley, these would include the lifestyle they promote/project, shop designs and atmospheres, pr oduct designs, the brand, staff training policy and the family culture). If the congruence (fit) between these three areas is great, then this indicates effective management of resources (Hamel and Prahalad 1993 comment that it is important for organisations to manage resources well in order to attain objectives), strategy formulation and all-round success.It can be argued that the success of Laura Ashley up to 1985 can be attributed to greater EVR congruence. That is such things as the number of shops and plants, distribution systems, stakeholders, threats (including competition), products, level of vertical integrating and so on fit together well in relation to the size, structure, culture and rush of growth of the organisation then. The key success factors are also significative of this congruence.So that they can be developed to help ensure two present and future success, it is important key success factors are value and understood. One particular way Laura Ashley could do this is through a thrum analysis. This reviews an organisations internal strengths and weaknesses and opportunities and threats in the external environment (Cole, 1996). This may be done for a particular moment in clock or as an overview encompassing the past and present. As made open(a), Laura Ashley has faced much change during its existence. Opportunities and threats come ab discover as a result of constant change and the uprise analysis can help to make these and internal strengths and weaknesses relevant when dealings with change (Johnson and Scholes, 1989).This SWOT analysis can be used in relation to analysing the problems faced by Laura Ashley in the late 1980s and end-to-end the 1990s. They can be greatly attributed to the weaknesses and threats identified. For example, fluctuations in the economy had a knock-on effect on the sale of property and thus on the sale of household furnishings. Also, high borrowing, wastage and forced discounting meant that, despite sal es increases, shops were making a loss. The reorganisations in 1988, 1991 and twice in 1995 had their effect too they were costly and highlighted inefficiency. Chandler (1977) states that structures are not adapted until pressure of inefficiency forces the change and that this change process is usually a painful one often carried out by a different chief executive separately time. Upon and after his appointment in 1991, Jim Maxmin found that the organisation lacked a core identity, clear strategies, empowered staff, thorough market research, efficient logistics, and many problems in the US such as limited growth, suffering management and legal transfer problems.He responded with his Simplify, Focus and Act programme. This included reorganisation, institution of a Global trading operations Executive (GOE) and Global Collection Development (GCD) which aided globalisation and marketing, hike to empower staff, an alliance with Federal educe line of credit Logistics to improve delivery and distribution systems, sourcing half of the organisations manufacturing tothe Far East (rather than in-house in Britain) and management reliever in the US. Before leaving Laura Ashley in 1994, Jim Maxmin commented that throughout the entire organisation, people has embraced the principles of the Simplify, Focus and Act programme and set about sorting out the useable problems which have plagued Laura Ashley (Maxmin, 1993 as cited by Warnaby, 1994).Ann Iverson was appointed chief executive of Laura Ashley in 1995. She was to spearhead the rush into the US and revamp the product start out (Teather, 1999). Her observations found various problems all of which can again be attributed to identified weaknesses. It was found that the product range was too broad, there was no co-ordinated look to match globalisation, the supply chain was inefficient and problems continued in the US. Ann Iversons response included strengthening the alliance with Federal Express railway line L ogistics, opening larger stores in the US and reviewing marketing and sales. These changes were considered to be good as Laura Ashley restored dividend payments in 1996 for the first time since 1989. Ann Iverson was dismissed in 1997, however, mainly due to continuing problems in the US and the organisations image (Keynotes, 1997).Each of the changes mentioned came about from the organisations particular strengths (as identified) at the time. For example, whilst such things as restructuring and shop closures were happening, the strong name of Laura Ashley and strong client loyalty were greatly relied upon. Bowman and Asch (1987) comment that the strengths of an organisation are a if not the determinant in how it handles weaknesses, opportunities and threats.Opportunities open to the organisation in dealing with its various problems can be identified as the opportunities in the SWOT analysis. Opportunities change and differ over time. For example, the alliance with Federal Express Bu siness Logistics resulted from available opportunities at the time. A possible opportunity in the early 1990s would have been a speedier move away from vertical desegregation for example.Laura Ashley became totally vertically integrated in the 1970s and continuedto be so though gradually moved away from this in the 1990s completely in 1998. Vertical integration can be backwards e.g. manufacturer purchasing/owning supplier and forwards e.g. manufacturer purchasing/owning retailer Laura Ashley was both backwardly and forwardly vertically integrated everything from the supplying of materials and manufacturing to distribution and retail. The main benefits of this throughout the organisations development included greater control, greater mightiness to differentiate, the opportunity to achieve economies of scale (higher margins), assurance of supply and greater synergy. disrespect this, there were numerous disadvantages oddly that it was costly and greatly increased operational lev erage as well as the deal to keep up with technological change.This tied up capital having long-term affects. It meant that there was not full concentration of key strengths (design and retail) on which key success factors are dependent (Thompson, 1997). Furthermore, vertical integration was inflexible (cheaper manufacturers could not be sourced) and aesthesia to decreases in sales increased. It was the cost aspect that had the greatest impact particularly in the face of costly expansion (especially in the US). Warnaby (1994) comments that vertical integration was responsible for financial problems in the early 1990s. The costs of vertical integration had an impact on the organisations ability to successfully expand internationally.Perhaps with the exception of a distinctive product look and the acceptance of a divisional structure, Laura Ashley did not expand internationally applying Treadgolds keys/strategies each was applied/introduced incrementally as problems arose to high light the need e.g. it was not until 1995 when Ann Iverson felt the need for a unified product look. This is indicative that the organisation was not particularly capable of embarking on such ambitious international expansion as it did. This is highlighted by the numerous problems faced by the organisation e.g. poor marketing/marketing strategy, inefficient logistics and lack of direction and clear strategy. Additionally, the paternalistic management style was not suited to rapid expansion and this coupled with high finance demands from vertical integration, reorganisation and early acquisitions further indicate poor planning in terms of developmentLaura Ashley has faced so many problems throughout its existence. Problems owing to management, organisational structure, logistics and rapid international expansion continuously came and went. In 1998 bankruptcy looked imminent but an injection of ?44 million in e submity capital by Malaysian businessman Dr Kay Peng Khoo (giving his MUI property company 47.5% share ownership whilst the Ashley family retained just 9% Gibbs, 1999). He installed Ng Kwan Cheong as chief executive who made changes including the disposal of the problematic atomic number 7 American franchise (retail operations were sold to a management buyout police squad for $1 at the end of July, 1999 Gibbs, 1999), targeting of younger markets and investment in e-commerce (Abdullah, 2000).However, all of these changes looked to have no major impact in the Groups success with sales steadily decreasing from 1998. Whether or not Laura Ashley manages to achieve the sort of success it enjoyed in the early 1980s under its newfound management remains to be seen as does its survival. Chief Executive Ng Kwan Cheong refrained from placing false hopes, commenting in March of 2000 We have a lot of things to do. completely I can say is we are moving in the beneficial direction and things are changing (Cheong, 2000 as cited by Abdullah, 2000).REFERENCESTexts B owman, C. and Asch, C. (1987). Strategic oversight. Macmillan Education. Chandler, A.D. (1997). The Visible Hand The setrial Revolution in American Business. Harvard University Press. Cole, G.A. (1996). concern opening and Practice (5th Edition). Letts Educational. Johnson, G. and Scholes, K. (1989). Exploring embodied schema Text and Cases. scholar Hall. Johnson, G. and Scholes, K. (1999). Exploring Corporate outline Text and Cases (5th Edition). Prentice Hall. PUmpin, C. (1987). The Essence of Corporate Strategy. Gower. Thompson, J.L. (1997). Strategic Management Awareness and Change. International Thomson Business Press. diarys and Publications Hamel, G. and Prahalad, C.K. (1993). Strategy as stretch and leverage. Harvard Business Review, 71, March-April, pp75-84. Keynotes (1997), Keynote Market make known Clothing Retailing, 1997 Reports, p23. Treadgold, A. (1991) Dixons and Laura Ashley Different Routes to International Growth. International Journal of Retail and Distri bution Management. Vol. 19(4), pp13-19. Warnaby, G. (1994). Laura Ashley An International Retail Brand. Management Decision, bulk 32 (3).Other Abdullah, S.A. Turning around Laura Ashley. http//adtimes.nstp.com.my/archive/mar3.htm (09 celestial latitude 2000). Gibbs, G. (1999) Laura Ashley bids leave The Guardian Unlimited Archive. http//www.guardianunlimited.co.uk/Archive/Article/0,4273,3904775,00.html (18 December 2000). Teather, D. (1999) Banks push Laura Ashley to quit US The Guardian Unlimited Archive.http//www.guardianunlimited.co.uk/Archive/Article/0,4273,3855892,00.html (18 December 2000). Vora, K. (1998) Lessons from Laura Ashley. The mixed bag Fool The Daily Fool, Evening Fool Tuesday, 03 March 1998, (online) (cited 04 January 2001). http//www.fool.co.uk/DailyFool/1998/DailyFool980303.htm .BIBLIOGRAPHYTexts Cole, G.A. (1997). Strategic Management (2nd Edition). Continuum. De Wit, B. and Meyer, R. (1994) Strategy Process, Content, Context An International Perspective. W est Publishing. Hatch, M.J. (1997). Organization Theory. Oxford. Palmer, A. and Hartley, B. (1996). The Business and Marketing Environment (2nd Edition). McGraw-Hill. Palmer, A. (2000). Principles of Marketing. Oxford. Porter, M.E. (1980) Competitive Strategy Techniques for Analysing Industries and disputation. The Free Press. Porter, M.E. (1985) Competitive Advantage Creating and Sustaining Superior Performance. The Free Press. Wild, R. (1994) How to Manage (2nd Edition). BCA.Other Framed-Art Wholesale. Laura Ashley The History http//www.framedartwholesale.com/aboutLA.htm (20 December 2000). Herzog, J. (1997) Laura Ashley closure a strategic purpose. Daily Yale News Online Friday, 12 September 1997, (online) (cited 20 December 2000). http//www.yale.edu/ydn/ study/9.12.97/I-1lauraashley.html . Hoovers Online. Laura Ashley Holdings Plc Company Capsule Companies and Industries http//www.hoovers.co.uk/uk?capsule/5/0,3042,90245,00.html?referer= (20 December 2000). Wetfeet. Laura A shley Holdings Plc Company Profiles. http//www.wetfeet.com/asp/companyprofiles.asp (18 December 2000). Wright Investors Service. Research Report Laura Ashley Holdings Plc Corporate Information http//profiles.wisi.com/profiles/scripts/corpinfo2.asp?cusip=C826EG930 (18 December 2000).