Laura Ashley and Federal Express Strategic Alliance Essay

Laura Ashley is a global clothing and furnishings retailer establish in the United Kingdom. They have grown at a real fast rate from operating 231 retail stores in 1986 to 481 stores in 1990. Unfortunately, its profit were not increasing as expected due to the inefficiency of its logistics management. There was an all all over dependence on in-house manufacturing, SBUs operated as stand-alone businesses with independent inventory and systems which convey duplicated systems that are not integrated, and dysfunctional scattering operations such as outdated inventory ordering methods and inefficient movement of goods along the allow chain. Based on these enigmas, Jim Maxmin decided to form an hamper with Federal bear witness BLS, to let them handle the logistics of LAs business since that is what BLS does best, while at the same time also benefiting Federal Express.The contract between LA and BSI for the strategic alliance was not your typical contract with specific rules, pric e, penalties, etc. The alliance was a win-win business partnership, with no defined end denominate and lasting at least for 10 years. The contract had a precise relatively loose structure, and it was based on trust and focuses on areas of vulgar interest. There were no specifics on defining issues since it may conflict with the plebeian interest that this alliance is based on. Both sides have agreed to be transparent and share information with each new(prenominal), and have mechanisms built in to deal with matters that could not be agreed upon.When it comes to forming a strategic alliance, this phase of contract is good because it is based on a high direct of trust and the focus of mutual interests, to help each other make water competitive advantage in the foodstuff. Trust is very important in every relationship, even in business. Also, having a loose structure makes more sense in a fast changing environment because specifics changes over time. In other words, the contr act was very simple. And by having it to be open-ended, consequence there is no defined end to this partnership. Therefore, if this partnership is successful, they volition be suitable to continue being an alliance and benefit from it. The only problem with this type of contract is that it leave be more difficult to survey anyconflicts that may arise between the two companies in the future.From LAs point of view, I believe this alliance pull up stakes be very sound to them. Currently they are very inefficient with the distri neverthelession area of the business, which is costing them a lot more money. It will be difficult and will take a long time for LA to try and reengineer its processes and form a distribution system that will work. So instead of trying to invest all that time and money into reorganizing and exploitation a working system, forming an alliance with FedEx and having them take over that function will be better since FedEx is known for its logistics expertise . Also, they have one of the best introduce systems in place, and that can definitely benefit LA. By integrating LAs current systems to FedExs systems, it will allow LA to find out to FedExs efficient tracking system, and eliminate the duplicate and independent systems that LA currently have with the SBUs, all in a much shorter time. With the tender infrastructure, information is transparent and flows throughout the supply chain, and everyone will be able to see it.Also, FedExs dependable delivery services will get goods to destinations quickly and efficiently, reducing lead time (products shipped anywhere in 24hrs-48hrs), fare costs, and inventory costs. All this will improve LAs node service, better informed front-line employees due to the transparency, reduce costs, improve efficiency in its operations, rebuild its reputation and relationships with its customers, and be more competitive globally. The only downside of this for LA is that they will lose complete control of th e distribution part of the business, but at the rate LA is growing with the increasing inefficiency that its facing, that is a small price to pay because LAs current distribution operations needs help.As for FedEx BLS, I believe this alliance is beneficial overall, but it is much more risky for them than it is for LA. For FedEx, it allows them to expand and utilize its capabilities on a global basis. This type of alliance was one of the first, and if successful, FedEx BLS can snip a new trend and have a tremendous future. It will improve its current performance in Europe and gain market share due to the increased reputation that this will bring. Also, this could mean alliances with other companies and industries in thefuture.FedEx will be able to use the success with LA to form alliances with other companies, which will allow them to gain competitiveness and business. plain if other carriers try to do this in the future, it will be more difficult for those other carriers because b usinesses will know FedEx BLS are experienced and dependable, and will more likely go to them. But on the other hand, if this alliance was to fail, it would ruin FedExs reputation for reliability, which is the most important factor for FedEx in its industry. Also, it would cause FedEx to rethink the strategic-alliances idea, possibly damaging BLSs potential future.