Li and Fung’s Core Strengths
One of the core strengths of Li and Fung was acquisitions as they saw it as a means to sustain growth momentum. Most of the time they tried to “fill in the mosaic” by acquiring competitors in areas where they lacked positioning, expertise or talent. They just did not acquired companies they made them integrated with the old ones to make When they acquire companies Li & Fung’s strategy is to integrate incoming staff and streamline operations seamlessly within 100 days.
Li & Fung works to a Three Year Plan that addresses strategies across the board and in recent years has set and met the goal of doubling its size with each plan.
Li & Fung has achieved its milestones a lot faster, while keeping costs down by investing in new technology and software solutions. The company has set up the infrastructure for web conferencing between all of its offices. The company has improved IT software’s, particularly those relative to infrastructure that will offer improved collaboration, such as VOIP phones, WebEx, SharePoint for internal and customer collaboration, videoconferencing and EDI. This has allowed them to cut costs and increase productivity. Also Li & Fung centralized back-office systems contributed to improve the efficiency of acquisition.
Li & Fung’s as a middleman provided a wide array of services that spanned the whole supply chain. In addition, they supplied both hard goods and soft goods from suppliers to different countries and territories. Acted as the middlemen, the company could reduce matching and credit risks.
How do these core strengths make Li and Fung an attractive option for its customer?
How do Li and Fung make the supply chain more responsive (i.e., fast and flexible?
Do you think that other companies can replicate Li & Fung’s business
model? Why or why not? Be brief.