Investing in Laura Ashley was a viable opportunity for MUI because the company was associated with several strengths in the business. First, it was apparent that the company had a leadership function that was equipped with the necessary talents to identify the pressures in the market that were causing the low sales in the global markets. Secondly, the company had already established a loyal market share in the British market, and it was only looking to identify the specific preferences of the consumers in North America. However, one of the primary weaknesses of the company is that it had not conducted sufficient research on the requirements of a successful entry into the North American market as evidenced by the development of small stores that did not attract high sales, as well as the inefficient distribution channels.
specifically for you
for only $16.05 $11/page
The company had the opportunity to establish a stronger hold on the North American market by targeting the most lucrative market segments, which would include the youth. One of the major threats that the company faced was the lack of adequate information about the North American market, which would potentially lead to the application of volatile investments.
Porter’s 5 Forces
The case highlights the fact that the company needed to enhance its bargaining power against the suppliers to establish a more financially sustainable supply chain management system. The buyers in the textile industry had a very high power to drive the trends and the purchasing behaviors of the society depending on their view on the prices. The competition in the business was also extremely high, but the company had a loyal market share. The threats of substitution were low because the designs were unique; however, some of the products were outdated; thus, they attracted a lower customer base. The threat of new entrants in the market was always high because the textile industry has always been very competitive. Laura Ashley faced a tough financial growth pattern following the interplay of the issues of competitiveness and embracing a growth pattern that did not consider the threats and external pressures in business.
Essentially, it is clear that the lack of market analysis led to the company overproducing various designs and failing to deliver products that appealed to the changing trends in dressing. The company had to look into establishing a research entity or to develop a technological platform that would highlight the required designs. This would have made it easier for the company to determine the amount of products to produce to meet the demand without incurring any losses. Additionally, the company needed a better supply chain that would lower the cost of production and delivery, as well as limit the time overruns in the delivery process.
The political environment in the North American market was conducive for the company because it could easily establish stores for the business and partner with various entities to increase sales. However, the economic environment was also quite lucrative, especially because of the large population, which translated to a big number of consumers. However, the social environment was quite volatile because the market was associated with the presence of trends of consumption and preferences for designs. The company had an opportunity to harness the development of various technological platforms for marketing in the British and North American market. The environmental and legal aspects were also quite conducive for business, but the company had to develop a manufacturing plan that was sustainable to appeal to the target market.