Thursday, December 20, 2012

Li Fung

Li & Fung (A): Internet Issues What has been the historic strength and strategy of Li and Fung? 100 years of history Publicly traded family company Both William & overlord educated at HBS Victor earned Ph.D. & taught there for 4 years 1972 Returned to Hong Kong to modernize company management Hong Kong Based Trading Company by 2000 69% sales USA 27% sales Europe Major retailers (the Limited, Gymboree, American Eagle, etc) Global sourcing network Holistic Supply Chain Management 48 offices in 32 countries Value-added services through entire supply nonplus up b bon tonless-manufacturing next slide Outsource manufacturing which requires less capital Entrepreneurial structure teams of crossroad specialists in 90 separate, individual companies Meritocracy compensation performance based What capabilities of Li and Fung does Studio-Direct.com leverage? IT in 2000 10 secure customer Extranet sites (launched 1997) Customized to inevitably of key customers Online product development, order tracking Customers could change order as it progressed 60 IT staff in Hong Kong development outsourced Outsourced Intranet/Extranet Preferred press/deep connections to customers But saw how internet could transform industry studiodirect.
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com (gone by 2007) 80 staff Based in San Francisco Target: Retailers downstairs $100 M (20,000) Wholesalers under $50 M (2,800) What are the risks of this strategy? Costs to develop project could exceed figure Hong Kong too far from California Danger of feature creep in specifications which may raise development costs Backlash from import agents who could lambaste their fees enough to make project unprofitable. Risks during diffusion of technology to modernistic firms that could make rollout more costly. Could try pilot project first Could handicap Li & Fungs reputation because they cannot provide all the goods to this set of customers Existing customers may resent addition of smaller competitors who go forth benefit from... If you want to get a full essay, order it on our website: Orderessay

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