Laura Ashley and Federal Express Strategic Alliance Case Study
Laura Ashley and Federal Express Strategic Alliance
Laura Ashley is a global clothing and furnishings retailer based in the United Kingdom. They have grown at a very fast rate from operating 231 retail stores in 1986 to 481 stores in 1990. Unfortunately, its profits were not increasing as expected due to the inefficiency of its logistics management. There was an over dependence on in-house manufacturing, SBUs operated as stand-alone businesses with independent inventory and systems which means duplicated systems that are not integrated, and dysfunctional distribution operations such as outdated inventory ordering methods and inefficient movement of goods along the supply chain. Based on these problems, Jim Maxmin decided to form an alliance with Federal Express BLS, to let them handle the logistics of LA's business since that is what BLS does best, while at the same time also benefiting Federal Express.
The contract between LA and BSI for the strategic alliance was not your typical contract with specific rules, price, penalties, etc. The alliance was a "win-win business partnership," with no defined end point and lasting at least for 10 years. The contract had a very relatively loose structure, and it was based on trust and focuses on areas of mutual interest. There were no specifics on defining issues since it may conflict with the mutual interest that this alliance is based on. Both sides have agreed to be transparent and share information with each other, and have mechanisms built in to deal with matters that could not be agreed upon.
When it comes to forming a strategic alliance, this kind of contract is good because it is based on a high level of trust and the focus of mutual interests, to help each other gain competitive advantage in the market. Trust is very important in every relationship, even...
More Management
essays:
B to B and B to C Supply Chain Study
... use strategic alliances, partnerships, and long-term contracts to create relationships with other companies in the supply chains for the products that they manufacture or sell. When companies integrate their supply management and logistics activities ...
Case study description and analysis of Johnson Johnson's production and distribution of products
... in supply chain management. Efficient Consumer Response (ECR)It is a strategy where partners in a supply chain synchronise the product flow through the distribution pipeline from point of manufacture to point of final sale. ECR is primarily related to strategic ...
Devising of Optimization Models and Modelling Systems for Supply Chain Planning and Management
... Production-Distribution Systems: Models and Methods," Operations Research 36, no. 2, 1988, 216-228 Frayer, D.J. and R.M. Monczka, "Enhanced Strategic Competitiveness Through Global Supply Chain Management," Annual Conference Proceedings of the Council of Logistics Management, Oak ...
Value Chain and Supply Chain Analysis
... operations and suppliers in various countries, they need to expand their management to the global level and ensure their global supply chains and global values chains are set to run effectively and efficiently. A global value chain refers to the distribution ...
Case study--culture clash in corning and vitro joint venture
... local manager, and manager from the other part just take the responsibility of supervision and report the current operating situation to parent company. 5. In the early days of the alliance, executives ...
The Paradox of Cooperation and Competition in Strategic Alliances: Towards a Multi-paradigm Approach.
... regarding strategic alliances; an emphasis on more lasting relationships where benefits and ...
IBM & EMSs Partnerships: An Operations Management Case Study.
... s supply chain and allow it to focus on research, design, new technologies, and engineering (Zarley, 2003; Spooner, 2003). Advantage II: Reducing and Controlling Operating Costs ...
Case Study - Mama Products (customer service strategy, relationship between internal customers and supply chain management, JIT and TQM)
... reduced inventory, improved quality, reduced lead times, enhanced flexibility, minimum waste, and timely response to customer needs. JIT is considered to be a key component in the supply chain since a supply chain is a system of suppliers, manufacturers, distributors, retailers ...