LI & FUNG: GROWTH FOR A SUPPLY CHAIN SPECIALIST- case study solution
LI & FUNG: GROWTH FOR A SUPPLY
1 CASE SYNOPSIS
This case highlights the journey of Hong Kong-based trading
company Li & Fung Group which was a trading company
renowned for skillful management of its supply chain.
With the global economic downturn in 2009 following the
collapse of the American housing and credit markets, and
with the fashion industry expected to be severely affected,
how could Li & Fung continue to grow its business and
achieve the target of doubling its turnover to US$20 billion
for the period 2008-2010?
BRIEF CASE BACKGROUND
Hong Kong-based Li & Fung Group was a trading company
renowned for skillful management of its supply chain with 80
offices in 40 different countries.
The bulk of its business came from the trading of soft goods,
which comprised garments and apparel, with the remainder
consisting of hard goods such as furniture, fireworks and
promotional items. Its major market was the US, followed by
Europe, which contributed about one-quarter of its turnover.
s to Hong
d to garment
3 KEY ISSUE
IN THE ENVIRONMENT UNCERTAINITY
DUE TO GLOBAL ECONOMIC
DOWNTURN OF 2008 HOW COULD LI
& FUNG CONTINUE TO GROW ITS
BUSINESS & ACHIEVE ITS TARGET OF
DOUBLING TURNOVER TO US$20
BILLION FOR PERIOD 2008-2009?
2002 2003 2004 2005 2006 2007 2008
SITUATION ANALYSIS (EXHIBIT 1)
The EPS has declined from US$ 4400 in 2002 to
US $ 8900 in 2008
Hard goods , health and cosmetic products
US Europe Others
VALUE ADDED ACTIVITIES IN SUPPLY CHAIN
CRITICAL SUCCESS FACTORS
Extensive network of
office in about 40
countries, with most
no. of offices in
goods, soft goods ,
health and cosmetics
Services such as
1.More Stress on Europe markets
2.Use of US$ 100 million for acquisition
to be utilized to expand in Asian
countries which were less affected by
2008 down turn.
3.Sticking to diversification into health
4.Leveraging its supplier relationship into
performing sound trade overseas.
5.Avoid cases like KB toys