Case Study Analysis-Li and Fung

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CONTENTS:

1.Executive Summary ………………………………………………3 2.Introduction………………………………………………………..4 3.Challenges & Strength……………………………………………5-6 4.Competitor’s Analysis…………………………………………….7-8 5.Information System….…………………………………………….9 6.Threats & Limitations……………………………………………..10 7.Options…………………………………………………………….11 8.Recommendations…………………………………………………12

EXECUTIVE SUMMARY:

For past 96 years Li & Fung has been an export trading company with its branches spread across the globe. The company plans to enter into a new venture of online business. Entering into online business the company faces challenges to retain its existing customers and to capture new markets of SME (Small and Medium Enterprises). The company strength lies in its year old experience and its consistency shown in their financial stability over the years. With changing standards in technology the company needs to overcome the limitations in their IT System. Overall the company is recommended to enhance their DBMS and also to use strong and reliable security measures to keep their network safe

INTRODUCTION:

Li & Fung, a China based Company, was established in the year 1906 by Fung Pak-Liu and his partner Li To-Ming as an export trading company. After a decade the company expanded its business and went into warehousing and manufacturing of handicrafts. Post World War II, the company found a permanent base in Hong Kong and also extended its range of products. The Directors of the company now are William (MBA graduate from Harvard Business School) and Victor (PhD in Economics from Harvard University). Their potential entry into the company transformed it from a family owned business to a professionally well organized and managed company with proper planning, budgeting and futuristic vision. They skillfully transformed their private run business into public limited company and by 1973 it was listed on Hong Kong Stock Exchange. And by the year 2000, Li & Fung had many of its branches all over the world. An export trading company with 48 offices in 32 countries, with its customer base from the Mediterranean to the America including South Africa, South Asia, Europe, North Asia and Southeast Asia. The company offered a large variety of hard and soft goods. The Hard goods included fashion accessories, toys, sporting goods etc and Soft goods were mainly apparel, woven and knit garments for everyone. Hard goods had better profitability margin of 10% - 30%, whereas soft good gave about 6%-8% on every sale. By the end of year 2000, the Companies assets were worth about $2 billion and with 3,600 employees worldwide providing value added services to its customers. The issues that Li & Fung needs to focus are the connectivity with its manufacturers, updating their Database and swiftly managing the internet without affecting their offline business. This Report emphasizes on various challenges this company may come across, which may hamper their growth rate in the near future.

CHALLENGES

Challenges faced by Li and Fung are to retain both its online and offline clienteles after investing $200 billion in implementing a new information system. The other issue to focus on is its connectivity with their manufacturers. With the Company current growth it needs to rethink about its current database.

STRENGTH

A company needs to be strong enough to compete and prevail, in this frequently changing world where there is always a danger of competitors looking to outperform you in every aspect of the business. The stability Li & Fung has in this market, has taken them to a pinnacle where they are way ahead in the league with their closest competitor. The companies’ core strengths are:

William and Victor both being graduates from Harvard University. Victor with his deep thinking abilities was more of a visionary, whereas William on the other hand was more practical and was always keen on companies’ financial progress. The blend of these abilities of...
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