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1. What are Li & Fung’s core strengths?
The Li & Fung company first strength is the three years plan that set a goal for every 3 years which they consider a zero-based (start from scratch). They start with the end in mind and what they want to be at the end of the three–year period. During this plan, various goals and revenue targets are set. If the goal is not met at the end, the process provides the means to measure and analyze why they failed. This will correct the situation and enhance goal achievement in the next plan. So, when they put a target, they take the best information and think out of the box to achieve the goals. The company set a responsibility roles and reward system to track their plan.
The second strength was focusing in one type of business. So, they decided to leave any retail business and focus on the trading business. This helped the company develop a huge trading network global wide. All of this was achieved with “asset light” manner where the company avoided owning any piece of the supply it managed. Simply said, having almost zero inventory.
The third strength is broadening the business by the acquisition of the other trading competitor in the area to “fill the mosaic” as they would like to call it. The acquisition brought the company not only new growth engines but also the talent to catalyze and lead.
In addition, the third major strength, which was strongly linked to the success of the acquisition, is the use of Information Technology (IT) to connect and to share information across their network world wide and to build customer software to be very close to the customer needs and demand and to get faster feedback and tracking system. Also, the use of IT help the company to centralized the accountant and finances system of Li & Fung at the Hong Kong head office for better utilization and faster decision making. 2.

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