Write an analysis for the case:
“Fast, Global and Entrepreneurial:
Supply China Management, Hong Kong Style
– An interview with Victor Fung”
Strategic evolution in the new age of global competition
- Outsourcing Deal
- Supply Chain Management
Key success factors of Li & Fung
- Long term relationship with the suppliers
- Dispersed Manufacturing/Borderless conversion strategy
- The concept of “Soft $3”
- Focus on core business and outsourcing the high cost segments
Discuss the strengths/weakness/opportunities and threats
8 given the recent and future economic climate
- SWOT Summaries of Li & Fung
Li & Fung future under HK Government’s strategy to make
10 HK become a regional logistics hub
Strategies to take advantage of the change in China (WTO)
Li & Fung Limited is one of the global leaders in consumer goods design, development, sourcing and distribution. The company, along with its subsidiaries, provides supply chain management services to the retailers and various brands across the globe. It also provides logistics solution. It offers its services through three distinct interconnected business networks – Trading, Logistics and Distribution. The company along with its subsidiaries principally operates through a network of over 15000 suppliers, and over 240 offices and distribution centers in 40 countries across the Americas, Europe, Africa and Asia. The following will analyze the strategic evolution of Li & Fung in the new age of global competition. Also, it will discuss the strengths, weaknesses, opportunities and threats of their strategy given the recent and future economic. Moreover, it will find out the success factors of it. Furthermore, it will assess Li & Fung’s future under the policy of SAR Government’ strategy and the advantage given by the China.
Li & Fung Group is a HK based multinational business groups of listed companies in HK and the HK Hang Seng Index and Morgan Stanley in HK Index. The Group uses the concept of supply chain management to run their three core businesses in export trading, distribution and retail market. It established in 1906 in Guangzhou, China engaged in foreign trade in that year the first Chinese-owned companies, breaking the then foreign firms on China’s foreign trade monopoly. From 1906 to the present, the role of Li & Fung’s business has gone from simple procurement agent to global evolution of supply chain management. In early stage, it is only between customers and suppliers to act as an intermediary role to trade, as proficient in English, it act as a bridge between manufacturers and overseas buyers. But, the profit under simple procurement agent was squeezed between the growing power of the buyers and the factories. Their margins slipped to 3%. Since then, the brothers have lead Li & Fung through a series of transformations. It has made the transition from buying agent to supply chain manager. At present, Li & Fung’s business are well developed as HK’s largest export trading company and an innovator in the development of supply chain management. Also, it has her own retails business on Toys R Us and the Circle K convenience-store chain in HK. From now no, the strategic of acquisition will be one of the important element to help global expansion continually.
1. Strategic evolution in the new age of global competition
Acquisitions: This is a process in which Li & Fung gained new client accounts by buying rival companies. About nine companies were bought in 10 years. They include their closest competitor Inchcape Buying Services, Dodwell (bring access to Indian subcontinent), Swire Group and Camberley (their...
Bibliography: Bloomberg, D.J., et al. (2002) Logistics. New Jersey: Prentice-Hall, Inc.
Christonpher, M. (2005) Logistics and Supply Chain Management. Harlow: Pearson Education Limited.
Binglian Liu, Shao-ju Lee, Zhilun jiao & Ling Wang (2012) Contemporary Logistics in China, World Scientific Publishing Co. Pte. Ltd.
Gourdin, K.N., (2001) Global Logistics Management:a competitive advantage for the new millennium. Blackwell Publishing Ltd.
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