Li & Fung

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Topic | Discussion | Situation Overview | Li & Fung was established in 1906. In 1973, this company was listed on the Hong Kong Stock Exchange. From 1979, the opening up of China, to now, Li & Fung has relied on China to be the core supplier. In 1985, Li & Fung expanded the market to other Asian countries by building Li & Fung (Retailing) Limited. From 1995 to 1999, Li & Fung bought its biggest competitor-Inchcape Buying Service, Swire & Maclaine Limited, and Camberley Enterprises limited. The acquisition allowed Li & Fung to expand its sourcing networking out of Asian countries and obtain more clients of Europe and America. Since 2000, this company has continually taken over companies to increase revenue and to broaden market share. Through acquisition, Li & Fung has enhanced product offerings, so this company has developed sourcing, distribution, and retailing. There are two strategies that Li & Fung has emphasized. One of the strategies is the U.S. onshore strategy. This strategy was to gain more margins by developing brands. Li & Fung found that over 70% of its customers were from the U.S, so this company chose to be closer to its major customers and to offer additional value service. The way to add service is focusing on managing proprietary and private-label brands, resulting in reinforce the relationship between factory level and the selling floor. Another strategy is acquisition of competitors. Since 1995, this strategy has brought increased revenue and consistent success, and Li & Fung has also reaped advantages from this strategy to expand the customer base and market share. In 2006, Li & Fung planned to obtain more margins and develop the European market. However, this market is hard to manage because Europe was fragmented geographically. It will be a challenge for Li & Fung to

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