Laura Ashley and Federal Express Strategic Alliance

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MGT504 INDIVIDUAL CASE SUMMERARY #1: LAURA ASHLEY AND FEDERAL EXPRESS STRATEGIC ALLIANCE 1. Please briefly summarize highlight and key issues of the case. Laura Ashley is a British fashion and lifestyle retail company, the principal activities of the groups are the design, manufacture, sourcing, distribution and sale of garments, accessories and home furnishings; operating companies are situated in the UK, Ireland and Continental Europe. In 1991, James Maxmin became the CEO of Laura Ashley. He led a series of changes, for example, he entered into a strategic alliance with FedEx, forming a sort of proto-federation, aimed at improving distribution for close to 500 Laura Ashley stores. The alliance was established as a 10-year partnership, but it was relatively open-ended, premised on trust. The objective was to be able to supply 99 percent of Laura Ashley's merchandise to customers anywhere in the world within 48 hours. The alliance replaced a legacy system that would route a T-shirt manufactured in Hong Kong to a warehouse in Newton, Wales, before sending it to a retail store in Japan. Also, he led Laura Ashley to its first gross profits since 1989, and in fiscal 1993, gross profits were expected to reach 12 million pounds during 1992. But in early April 1994, the launch of a children's range and a furniture range helped deflect the looming crisis by 1997, after a torrid few years and numerous chief executives, the company was in serious financial difficulties. The Laura Ashley brand was represented in the USA largely through licensing agreements, but all of its stores there have now closed and the business as a whole was separately owned from that of its parent company in the UK. In this case, it was mainly discuss Laura Ashley’s strategic alliance with Federal Express. The managers participated in its development on both sides wondered, what its eventual

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