(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 Emerging Market
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
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 recession and taking into consideration Li & Fung’s hugely successful implementation and utilization of its supply chain management system, there are a 3 main ways Li & Fung can continue to expand its business and reach its target of US$20 billion. Our key recommendation here is for Li & Fung to revaluate its past strategy and realign it more effective in the current situation, reduce 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.
The first step that Li & Fung should take in order to continue expanding its business and reach its target requires us to look back at factors that have successfully contributed to the current formation of Li & Fung, namely through acquisitions. Throughout its history, Li & Fung has actively pursued and relied on acquisition to grow its business by expanding its supplier network and customer base. While this was a great strategy in the past, continued implementation in this economic climate is risky and could impart devastating results. Thus, Li & Fung should discontinue the acquisition strategy for now and implement a more natural or traditional...
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