Global Finance

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Global Value Chain Logistics Case Analysis
Patricia West
GEN 483 – GLOBAL VALUE CHAIN MANAGEMENT
David Fogarty – Faculty
June 9, 2008

Global Value Chain Logistics Case Analysis Laura Ashley, founded in 1953 by Bernard and Laura Ashley when they began printing textiles on the kitchen table of their London attic flat, was a specialty retailer, primarily of upscale women’s fashions, fabrics, and home furnishing products. The company was known for products that typified the tradition of English rural life. LA segmented its market in terms of customer lifestyles. As opposed to many of its competitors who targeted specific demographic or age groups, LA offered styles that would be appropriate for a customer from an early age to an older age. In 1990 LA appeared to be growing with 481 retail stores throughout the world a label that was well known. However, despite the continued success the sales went up, profits were flat, and capital employed rose out of control and Andrew Higginson felt all the problems were internal. The fundamental weaknesses in the LA supply chain were overdependence on in-house manufacturing, significant currency exposure, working capital intensity, excessive short-term dept, and rapid cash outflow. Information technology investments lagged growth and, where systems did exist, they were totally inadequate. In 1990 the LA company made changes to the supply chain using a worldwide network of third party product sources, limiting company-owned factories to 42% of sales by 1990, from 100% in 1986 (Philippe-Pierre Dornier, Ricardo Ernst, Michel Fender, and Panos Kouvelis, (1998). While trying desperately to gain control of the increased sales and lowered profits; LA lost site of the main ingredient to their success the customers, their wishes and lifestyle. In September 1991 Jim Maxim was named CEO he quickly introduced…...

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