Case Study LA
This also affects the future retail capabilities for Laura Ashley, while adding onto Feeder business with LA.
The BLISS division of Feeder now has an opportunity to utilize Its global assets and potentially open up new future markets. However the steps to achieve these goals have barriers to overcome as well. The major strength is transparency. Making all data available to all parties involved is crucial for success with this alliance. This improves the overall efficiency of the distribution process and saves money in the process.
Inventory carrying costs are significantly lower now that all products can be recorded and seen.
The two companies are also going to integrate their information technology systems. This will also enhance the distribution and logistics for Laura Ashley. There will be significantly less errors and confusion with the same technology. Logistics and distribution were a major problem because each market area would have different systems within the same company.
However, consolidating systems can also be troublesome. Some of these projects can be expensive, counter-productive and overwhelming. The company could have built a common database that combines data from the old system.
More Importantly, there can be a high degree of disruption with the alliance. With already horrible customer service levels, enhanced disruption could be the “last straw” for some customers.
A major disruption would be the opposite of what the alliance is trying to accomplish. Another major flaw is the 24-48 hour delivery of products throughout the world. For some products this is a must, but not for all. This high degree of standards can lead to huge losses with unnecessary expedited deliveries. In my opinion, there should be 24-48 deliveries, but not for all situations.
We can see companies Like Amazon taking huge losses cause of their outlook on transportation. Once you set this standard In place, taking it back will only frustrate the consumer even more. There are two sides to the coin with this alliance. It is based on trust with no secrets and everything open between the two companies.
It is a win/win agreement with the companies working together, but they are both giving up very important intellectual property. However, in this situation the benefits outweigh the costs, and the alliance will lead to more opportunities.
The alliance between Laura Ashley and Feeder benefits both parties, out Laura Sanely a Lot more LA NAS seen an Increase In sales since 1988, Duty not changes in profit. In fact they were at a loss between 1990-1992 (Exhibit 5). However, with lower customer service levels we are seeing sales slowly decline over the last year (1992).
With the overall gain in sales, LA is selling more products, that Feeder can now exclusively transport and warehouse. However, if Feeder can solely focus on transportation and warehousing, LA can focus on their customers and enhancing the customer service levels. This will go hand in hand.
More satisfied customers will buy more LA goods that Feeder and manage and transport. The more customers buy, the more products there are that need to be transported. On the other hand while Feeder manages logistics, LA can focus on their product and recoup their distribution costs from their old inefficient processes.
On average LA is growing at about 62. 5 stores/year (Exhibit 1) and 114,750 square feet/year (Exhibit 2). This means even more warehousing, transportation, and systems that LA does not have or that is inefficient. This is a great opportunity because Feeder has the available resources and this is what they focus on.
By taking a look are the graphs (Exhibit 1 & ) we can see that the business of LA will continue to grow are well. With this partnership, it essentially guarantees the growing business of LA to Feeder BLISS.
The number of retail shops and available space concentrated in the U. K. And United States also contributes a huge factor. There is going to be substantial amounts of product traffic (Exhibit 3) and warehousing (Exhibit 4) between the two market areas. The satellite-processing center for the U.
S. Is also being strategically placed in Memphis where Feeder is headquartered.
This will significantly reduce transportation sots within the alliance and would benefit both parties involved. With the new alliance, Laura Ashley is able to access new systems, with up to date information, new ways of doing business, better performance, and ability to focus on their core competencies. This can also effect the confidence among investors for this firm.
Feeder BLISS also benefits by getting their foot into the door in regards to the clothing business and Europe. This was an area of trouble for BLISS and by utilizing their international capacity; they are able to make a name for themselves in a new expanding market.
The success of the alliance will lead to expansion and more business opportunities for both parties. The failure of this agreement can lead too tarnished reputation for reliability in regards to the business of Feeder. Laura Ashley has less to risk because they already had a terrible logistics system.
They can only benefit from the expertise of Feeder Business Logistics Service. LA is now able to focus their efforts on product line expansions, profitability, and customer service levels. The alliance helped each company gain a competitive advantage in their designated markets.