Li & Fung: Internet Issues

1. What has been the historic strength and strategy of Li & Fung?

The historic strengths are 1) the company’s brand and reputation. The company has over 100 years of history of being a trading and manufacturing company with major clients such as The Limited, American Eagle, Reebok, Abercrombie & Fitch, Levi-Strauss and other reputable brands in the United States and Europe. 2) The global sourcing network (with information technology) and its efficient supply chain management strategy. The company has 48 offices in 32 countries enable the company to execute its supply chain management strategy, providing value-added services through its “borderless-manufacturing” (For example, to manufacture a jacket, the zipper might be made in Japan, the shell from Korea, design from the USA and assemble in China). The company’s supply chain also enables the company source for the high volume, time-sensitive and relatively low manufacturing cost for its clients. (However, the company does not own those manufacturing company, almost all of them are outsourced as it required less capital). The company’s also employed acquisition strategy to expand and acquire technology for the company. This approach also expands the company’s product range and client base. In addition, the company also develops a “Three-year plan” once every three years to set goal and direction for the company according to the real world situation. This approach facilitates the growth of the company.

2. What capabilities of Li & Fong does StudioDirect.com leverage? What are the risks of their strategy?

StudioDirect.com (a.k.a. lifong.com) was established to offer a wide range of customization options to its clients over the internet in real-time to foster communication and interaction between the company and its clients. Clients now can order