Challenges of International Marketing
Exploring Corporate Strategy
CLASSIC CASE STUDIES
Laura Ashley Holdings PLC
John L. Heath
The case describes the growth, development and varied fortunes of a leading clothing, home furnishings and related products group from its origins in the early 1950s until 1995. Over this period the business grew from a homebased husband and wife concern to an international group whose brand name Laura Ashley was recognised around the world and regarded by many as the group’s major asset. The case illustrates how competitive advantage may be eroded as the management problems of coping with organic and acquisitive growth, expanding international operations, and environmental change of various kinds, all increase in complexity. As a result, mismatches arise between the organisation’s strategic capability and its competitive environment that are difficult to correct. l l l
INTRODUCTION
In the spring of 1996 Laura Ashley’s shareholders began to believe, at long last, that better times really were on the way. The group had paid only nominal dividends since 1989 and had survived a cash crisis in 1990 and several years of indifferent performance and recovery attempts since then. Shareholders looked back on the company’s heady successes of the 1980s and wondered what had gone wrong. How was it that the distinctive strengths on which the group’s fortunes had been built were unable to sustain it in the 1990s? Now, however, there were encouraging signs. Since Ann Iverson’s appointment as chief executive in June 1995 the share price had doubled, and when results for the year to January 1996 were released in April it was clear that the turnaround she had instituted was already bearing fruit. The group announced a return to profit and the first dividend payment for six years. Pre-tax profit of £10.3m was the highest since 1989 and a strong turnaround from the £30.6m loss in the previous year.
EARLY HISTORY
In 1953 Bernard and Laura Ashley started printing tea towels and scarves
CLASSIC CASE STUDIES
Laura Ashley Holdings PLC
John L. Heath
The case describes the growth, development and varied fortunes of a leading clothing, home furnishings and related products group from its origins in the early 1950s until 1995. Over this period the business grew from a homebased husband and wife concern to an international group whose brand name Laura Ashley was recognised around the world and regarded by many as the group’s major asset. The case illustrates how competitive advantage may be eroded as the management problems of coping with organic and acquisitive growth, expanding international operations, and environmental change of various kinds, all increase in complexity. As a result, mismatches arise between the organisation’s strategic capability and its competitive environment that are difficult to correct. l l l
INTRODUCTION
In the spring of 1996 Laura Ashley’s shareholders began to believe, at long last, that better times really were on the way. The group had paid only nominal dividends since 1989 and had survived a cash crisis in 1990 and several years of indifferent performance and recovery attempts since then. Shareholders looked back on the company’s heady successes of the 1980s and wondered what had gone wrong. How was it that the distinctive strengths on which the group’s fortunes had been built were unable to sustain it in the 1990s? Now, however, there were encouraging signs. Since Ann Iverson’s appointment as chief executive in June 1995 the share price had doubled, and when results for the year to January 1996 were released in April it was clear that the turnaround she had instituted was already bearing fruit. The group announced a return to profit and the first dividend payment for six years. Pre-tax profit of £10.3m was the highest since 1989 and a strong turnaround from the £30.6m loss in the previous year.
EARLY HISTORY
In 1953 Bernard and Laura Ashley started printing tea towels and scarves