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LI & FUNG: GROWTH FOR A SUPPLY
CHAIN SPECIALIST
Title
1 CASE SYNOPSIS
2
3
4
5
This case highlights the journey of Hong Kong-based trading
company Li & Fung Group which was a tr...
2 CASE
BACKGROUND
1
3
4
5
BRIEF CASE BACKGROUND
 Hong Kong-based Li & Fung Group was a trading company
renowned for skill...
3 KEY ISSUE
1
2
4
5
IN THE ENVIRONMENT UNCERTAINITY
DUE TO GLOBAL ECONOMIC
DOWNTURN OF 2008 HOW COULD LI
& FUNG CONTINUE T...
4 INFERENCES
1
2
3
5
0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
400000000
450000000
2002 2003 ...
4 INFERENCES
1
2
3
5
SALES
69%
31%
Sales
Soft goods
Hard goods , health and cosmetic products
65%
26%
9%
Sales
US Europe O...
4 INFERENCES
1
2
3
5
VALUE ADDED ACTIVITIES IN SUPPLY CHAIN
Support
Trends
Information
Design
Sourcing
material from
exten...
4 INFERENCES
1
2
3
5
CRITICAL SUCCESS FACTORS
 Extensive network of
suppliers- buying
office in about 40
countries, with ...
5 suggestions
1
2
4
3
1.More Stress on Europe markets
2.Use of US$ 100 million for acquisition
to be utilized to expand in...
THANK YOU!
Anjali Mehta Traya Roy Chowdhury
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LI & FUNG: GROWTH FOR A SUPPLY CHAIN SPECIALIST- case study solution

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LI & FUNG: GROWTH FOR A SUPPLY CHAIN SPECIALIST
This case highlights the journey of Hong Kong-based trading company during global economic downturn of 2009

Published in: Business
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LI & FUNG: GROWTH FOR A SUPPLY CHAIN SPECIALIST- case study solution

  1. 1. LI & FUNG: GROWTH FOR A SUPPLY CHAIN SPECIALIST Title
  2. 2. 1 CASE SYNOPSIS 2 3 4 5 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?
  3. 3. 2 CASE BACKGROUND 1 3 4 5 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. 1906: Establishment 1937:moved headquarter s to Hong Kong 1949:Transforme d to garment trading
  4. 4. 3 KEY ISSUE 1 2 4 5 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$20 BILLION FOR PERIOD 2008-2009?
  5. 5. 4 INFERENCES 1 2 3 5 0 50000000 100000000 150000000 200000000 250000000 300000000 350000000 400000000 450000000 2002 2003 2004 2005 2006 2007 2008 PROFITS(US$) SITUATION ANALYSIS (EXHIBIT 1) The EPS has declined from US$ 4400 in 2002 to US $ 8900 in 2008
  6. 6. 4 INFERENCES 1 2 3 5 SALES 69% 31% Sales Soft goods Hard goods , health and cosmetic products 65% 26% 9% Sales US Europe Others
  7. 7. 4 INFERENCES 1 2 3 5 VALUE ADDED ACTIVITIES IN SUPPLY CHAIN Support Trends Information Design Sourcing material from extensive network Coordination of sourcing activities Material Outsourcing Quality control Prototype testing Manufacturing Consolidation of goods Custom clearence Shipping
  8. 8. 4 INFERENCES 1 2 3 5 CRITICAL SUCCESS FACTORS  Extensive network of suppliers- buying office in about 40 countries, with most no. of offices in European &Mediterranean countries  Acquisition strategy & Venture Capital to expand the market  Customer centric organizational Structure – ensured no bureaucracy  Diversified Products & Services-Hard goods, soft goods , health and cosmetics products, Sourcing  Onshore Business- Services such as design, product development quality control and distribution.
  9. 9. 5 suggestions 1 2 4 3 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 and cosmetics. 4.Leveraging its supplier relationship into performing sound trade overseas. 5.Avoid cases like KB toys
  10. 10. THANK YOU! Anjali Mehta Traya Roy Chowdhury

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