To what extent did Laura Ashley’s theory of business under Anne Iversion represent a fit with reality?
Anne Iversion expanded the operations of Laura Ashley to foreign countries. This was indeed a fit with reality bearing in mind that expanding the business portfolio was the most viable way of reaching out a wider market.
We will write a custom Essay on Laura Ashley Company’s Theory of Business specifically for you
301 certified writers online
Since the business was apparently out of touch with latest fashion designs, Anne decided to venture into more appealing fashion deigns. This was yet another fit with reality since the business targeted the young customers in the UK by producing more fashionable products.
She also launched thirty well established flagship stores in the United States. However, there were no adequate products that could fill these stores completely. This was her greatest mistake.
The newly acquired stores were quite large and also demanded additional expenses in terms of leasing cost. Since this strategy failed to work, Laura Ashley accrued heavy losses leading to reduced revenue.
A rescue team was consequently put in place in order to revive the business back to profitability. However, Anne Iversion was sacked on the basis of being unable to drive the business towards profitability.
Comment on whether Laura Ashley’s strategy in the past had been more emergent than deliberate
The strategies adopted by Laura Ashley were more deliberate bearing in mind that the business used to face myriads of operational challenges. All of the strategies adopted by this business portfolio were meant to rescue its operations and also boost its level of generating revenue.
For instance, it was later compelled to turn into home ware products such as furniture after the fashion portfolio proved to be less profitable. On the same note, it had to reduce the production and sell of clothing materials in favor of home ware related products.
Over eighty percent of total sales were generated by home-related products. Sales from clothing and fashion department accounted for about twenty percent.
As it stands now, Laura Ashley has a stable demand for home products. It has transferred its stores that are not performing well from prime locations to off-pitch stores. This is a strategy of saving money especially on overheads incurred as a result of renting costly facilities.
It is also aimed at making Laura Ashley a more competitive store than other players in the market. As can be noted from these approaches, the strategies being adopted by the business are not emergent at all.
Instead, these strategies are deliberately being put in place in order to improve its overall performance.
How is Laura Ashley’s theory of business being continually tested?
The theory of business adopted by Laura Ashley is also tested on a continuous basis by other market players. For example, loyalty among customers towards home-related products has improved for Laura Ashley. These customers are also aware of what Laura Ashley is doing.
There are plans to open additional stores to boost sales. Moreover, there are other 200 franchised stores overseas with an adequate customer base. Most of the sales obtained from overseas stores are mainly drawn from fashion and not home-related products.
These are business theories that are continually being put into test by the management board of the business. Laura Ashley is not quite sure if the foreign stores will continue to be profitable.
Get your first paper with 15% OFF
This is the reason why the management is testing whether by opening additional stores overseas, the market share will be improved.