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Published by:
IBS Center for Management Research (2005)
31 pages
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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 customer needs and preferences. The case examines Li & Fung''s major strategies such as, positioning itself as the supply chain manager, integration of operational strategy with its organisational strategies, customer-centric organisational structure, technology and Internet initiatives, and globalisation 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 students to gain a comprehensive understanding of globalisation - rationale, levels of globalisation, managing global operations, globalisation strategies and challenges. The case is structured to achieve the following teaching objectives: (1) understand how a regional trading company used its core advantage (its vast sourcing knowledge and network) to become a global value chain manager, providing global economies of scale and scope to its customers; (2) study the importance of efficient value chain management for a global company; (3) understand the importance of organisational structure with balanced centralised and decentralised operations for a global company; (4) examine the role of IT and the Internet as major drivers of globalisation; (5) study the importance of acquisitions and alliances in a company''s globalisation strategies; (6) understand how innovation, differentiation and customisation can be used as strategic and competitive advantages by a company, to maintain its leadership in the domestic market, and emerge as a global player; (7) appreciate how visionary leadership and management capability can work as a core advantage for a company to attain success in global markets; (8) study the changes taking place in the retailing and trading industry with respect to customer requirements and examine the need for a customer-centric business model for an export trading company; and (9) gain insights into the dynamics of Hong Kong''s export trade industry. This case is part of the strategy and general management course. It is aimed at MBA/Post Graduate Diploma in Business Administration (PGDBA) level students as well as executive education programmes. This case has a comprehensive teaching note which includes teaching approach, basic issues and immediate issues of the case, discussion and assignment questions, detailed analysis and additional readings and references. This case gained the second runner''s up award in the First John Molson Case Writing Competition conducted by John Molson School of Business, Concordia University, Canada.


Li & Fung; Globalisation; Value chain configuration; Supply chain management; Global supply chain; Internet-enabled supply chain; Knowledge sharing; Customer-centric organisational structure; Global expansion; Hong Kong's export trade industry; External environment
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