Report on Li-Fung -Global Value Chain Configarator

Case study analysis

Report on

Li & Fung-The Global Value Configurator

Abstract

The case examines the evolution of Hong Kong based Li & Fung Limited from a traditional trading company into a global consumer goods export trading giant and a manager of customers' supply chains. It discusses in detail the company's efforts to constantly evolve its business model in response to the changes in the external environment and the customer needs and preferences. The case examines Li & Fung's major strategies viz. positioning itself as supply chain manager, integration of operational strategy with its organizational strategies, customer-centric organizational structure, technology and Internet initiatives, and globalization efforts, which contributed to the company's emergence as one of the world's leading consumer goods trading companies. Finally, the case explores the challenges facing Li & Fung in 2004 and discusses its future prospects in the light of these challenges. The key focus of the case is on enabling the students to gain a comprehensive understanding of globalization - rationale, levels of globalization, managing global operations, globalization strategies and challenges.

History

The case deals with a company named Li & Fung limited, a Hong Kong based consumer goods giant. The company specialises in exporting finished goods and uses many of the opportunities in like low labor cost in china and less rigid export quota, to earn its revenues. After getting license from the Chinese Govt , the company is authorized to export good directly to customers worldwide and imports raw materials to china for manufacturing. With less trading restriction in china, the company hopes to enhance its competiveness and share in the global market.

China became the world’s largest exporter of textile and clothing with USA as its major exporting hub and with this, companies like Li &fung prospered by becoming an intermediate. In the later stages the...