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Li & Fung Case

Essay by   •  March 3, 2012  •  Essay  •  287 Words (2 Pages)  •  1,691 Views

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A. What is business model of Li & Fung?

Li & Fung don't have their own factories, but have efficient systems and infrastructures in trading, logistics, and distribution. Li & Fung make quit higher profits than other companies in fashion industry by using specialized systems and broadening business area by M&A.

B. Why did not outsource the information system? Was it efficient?

One of the core strategies of Li & Fung is M&A of competitors to broaden their business area, and several M&A is still going on, which makes Li & Fung bigger and bigger. Thus, developing and improving management information system is required for making efficient business and increasing profit. The profits and success of Li & Fung is determined by minimizing unnecessary processes and times by using globalized information systems. This is reason why Li & Fung has many software engineers and strong IT infrastructure, but not own factories, which is similar level with Apple, Google, Samsung, or Yahoo. Thus, Li & Fung must have its own system development teams and has to keep their focus on developing efficient information system.

C. Are Li&Fung offline and able to coexist?

Revenue and position in market of Li & Fung could become smaller by because it was proven that is successful model and could reduce the cost compared to offline business. However, there is limitation in online-based massive trading because most buyers want to see and check the products directly in offline, not by online webpages, and because of possible security problems. Thus, Li & Fung should target conventional clients for massive trading, but should target small clients, which could make coexistence and success of both Li & Fung and



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