This is a case of Li & Fung Group, a Chinese textile company which is run by two brothers who have Ph.D. at Business Economics at Harvard University or MBA at the Harvard Business School. The article describes the firms from its start up to 1998, when it has established and making strategy for twenty-first century.
Li & Fung’s business model is “a virtual factory” or “private label manufacturing program”, means it specializes providing product itself, not brand or promotion. Though there is big scale merit in production of textile industry, it is difficult each company has big factory because there are lots of competitors and fashion of the clothes are always changing. For company which has good talent of design or marketing, it is better not having its manufacturing and outsourcing it. This is why Li & Fung is needed from many customers and Li & Fung has developed the relation through its network to get the textiles at high speed and good quality in lowest cost.
Li & Fung’s strategy is the 4Cs;.
1,Connection
2,Communication
3,Control of quality
4,Consolidation of shipments
Its way of business is simple, developed good manager and construct reasonable evaluation, collect information and invest promising company. But most interesting for me is it made investing company, LFI, to find customer in future and collect money. In the twenty- first century information is important but collect information only is so costly. To have invest company is good strategy for other company, I think.
URL:http://www.lifung.com/eng/global/home.php
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