Li & Fung

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Introduction Li & Fung is a Chinese-owned export company with over 100 year’s history, which had grown and expand quickly during the time from 1973 to 1989 after the brothers of Fung, Victor and William, return to Hong Kong and manage the company. Li & Fung is a Chinese family business that rooted deeply in Chinese value. The company has core competitiveness such as well-developed incentive system and highly integrated sourcing service. Within 25 years, the brothers had built up strong relationships with government contracts in Hong Kong and Beijing and close collaboration relationship with their customers around the world. From 1995 to 1998, Li & Fung was undergoing a three-year plan called “beyond ‘filling in the Mosaic’”. In 1995, the brothers acquired a roughly same size company as Li & Fung called IBS/Dodwell for $58 million, which was quite a big step of the company. In the past 2 years, although it is really difficult to maintain the quality of customer personalize service for a company with over 2000 employees, Li & Fung had proved that they have managed to do it well: the company successfully raised the average margins of the two companies from 2.2% to 3.1% after integration. Beyond sourcing service, Li & Fung established a venture capital group called LF International, which would invest the company that had a need for LF’s sourcing service. And beyond the borders, with an increased customers and supply base, the brothers was planning to expand the company’s current Asian-based sourcing capabilities in regions closer to their markets. After building up a sourcing office in Egypt in 1996 and Tunisia in 1997, LF is planning to establish a new sourcing office in Mexico in order to serve the needs of North America customers. But due to the effect of NAFTA, LF is facing with some problems. Analysis Li & Fung attained large margin

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