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Laura Ashley - Turnaround


Laura Ashley might have responded differently using three-stage process for recovery.

Stage 1

This stage was to restructure leadership and organizational culture.  Since management issue was one of the major problems, it was possible that the company had to replace top managers in order to bring into new talents.  The new top manager was important in terms of supplying a new vision and symbolizing that things needed to change.  This might involve a cultural or structural change to aid repositioning of the company.  For example, the culture might be focused on design, innovation, and continuous learning, which was to be more responsive to external changes.  Structural change might involve a leaner and flatter structure to support the new culture.  

Stage 2

This stage involved cost reduction, asset redeployment and selective product/market strategy.

Cost reduction included better expense control rather than cutting costs.  Expenses should be reduced for expansions and investments.  Operations processes should be reviewed to improve the flow to reduce backlog and inferiors to avoid rework and inventories.  Stock control was essential to reduce lead times, eliminate buffer stock and dispose of slow-selling lines.  Structural change might also involve layoffs to achieve a better but leaner workforce.

Asset redeployment involved the closure or divestment of businesses that were not core to the Laura Ashley brand such as the leather goods, possibly the manufacturing plants, as well as retails that were not profitable.

Selective product/market strategy would be defensive due to the business failure and the company might need time to recover and turnaround under the economic downturn.  It might consider decreasing marketing effort and divest products that were incompatible to their core competences.

Stage 3

This stage involved repositioning the company for future business directions.  The company might adopt defensive strategy.  First, it needed to divest unrelated products and focused back to its core competences such as fabric printing and home furnishing.  It had to deliver the repositioning message to the mind of its target consumers.  Then, it might choose market penetration to gain market share through the aid of promotion strategies.


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