Li&Fung Case Study Analysis
(Case study 1: Li& Fung)
Extensive network of suppliers (global reach supplier with SCM)
Provision of value added service (customer centric structure)
Entrepreneur corporate culture Low –end with hard goods
Over dependence on US Market
Vast supplier network makes it tough to maintain
Increasing expense from acquisiton Continuing global economy downturn
- Collapse of the American housing
- Credit market yield
1) In light of the American recession, what can Li & Fung do to continue expanding its business and reach its target of US$20 billion for the period 2008-2010?
In light of the American …show more content…
According to “Exhibit 2: Li & Fung Offices Worldwide”, Li & Fung already has offices establish in a number of emerging countries. In the current economic environment, demand is sure to come and has already been coming from these countries which used to be producers. Li & Fung needs to refit its current supply chain so that it is selling even in the countries where it is sourcing. We believe that this will lead to a situation where the supply chain will have to move or at least become more expensive. Li & Fung needs to accept this fact but understand that consumers will tolerate a higher supply chain cost in exchange for the supply of goods they want, when they want them. There is more of a focus on speed and availability.
In conclusion, we believe that Li & Fung is definitely well-positioned and capable to continue expanding its business and reach its target of US$20 billion for the period 2008-2010. By revaluating its past strategy and realigning it to be more effective in the current situation, reducing costs by utilizing systems it already has in place, and by targeting specific markets in such a way that they can experience potentially great reciprocal gains, Li & Fung is sure to have a bright future ahead.
2) Explore the growth opportunities available to Li & Fung.
Li & Fung believes that the emerging markets of Brazil, Russia, India and China(BRIC) are