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Executive Summary
Li & Fung is a long-standing Hong Kong based company that that has evolved from an export trading company to a coordinator of value-added services across the entire supply chain in a global, open manufacturing environment. They assess the clients’ product and delivery needs and orchestrate supply, manufacture and delivery in a very tailored and specialized way (Claremont Conversation Online, 2008). In the prevailing business environment, it has not been cost effective to trade with SMEs since production orders were below the factory minimums. Through the implementation of an internet portal, they have secured their position with the SME market while maintaining economies of scale.
Description of the Case
The Li and Fung case analyzes the challenges, solutions, and potential issues associated with implementing the internet into their fundamental business strategy. This analysis starts by chronicling the history of the company from its inception in 1906. The study of Li and Fung’s background provides a clear understanding of the evolutionary processes that helped forge the fundamental structure and framework that defines the company’s culture. The transition from a small family-run export trading company to a global production machine with forty-eight offices in thirty-two countries exemplifies a business model that anticipates change, encourages diversity, and fosters communication.
The extension of the holistic supply-chain management model has allowed Li and Fung to incorporate value-added services throughout their entire production process. The “total value-added package model” creates a borderle ...