The Impact Of The Above Study Case Study Samples

Introduction

Li and Fung is a Hong Kong-based multinational company that participates in the development, design, logistics, and sourcing of the consumer goods for many of the world’s retailers and brands. The company majors in supply chain management of high volume, time sensitive products for top sellers and trademarks globally via a widespread universal network. It provides sophisticated, one-stop-shop supply chain solutions to meet customer’s specific needs. The company works with three segments; logistic system, trading network, and distribution systems.
Li and Fung’s growth spurt in the last decades was generated after intense planning and scrutiny of its core sourcing business. Two primary plans were critical to propel the growth. In the beginning, while remaining committed to its philosophy of not owing any piece of the supply chain, the company focused on optimizing the pricing structure of each structure of the global supply chain. Some of the efficacy made comprise of shipping, logistics, and customs. In this strategy, it not only gained cost saving but also it maximized profits by creating more sophisticated value-added services for the customers so that it could capitalize on their past. The second approach was the continuous attainment of challengers.
Another significant problem experienced by the company is during the process of expansion. In order to continue growing, the company had to expand its services not only to finding value for the multiple links throughout the supply chain but also had to do so by getting closer to the customer. One of the key strategies that the company launched was the U.S. onshore strategy whose primary goal was to gain more even more margin. It was evident that the company could not just squeeze cost saving and improve the factory price. Instead, the company focused on providing new services in the place of the supply chain between the factory and the selling floor.
Another major problem the company has experienced is the incorporation of information technology into the current system. The process proved to be costly to the company since the installation of software and computers in the business involves more money. To add on, the returns linked with information technology are long term. Therefore, the company needed to be stable in order to adopt the technology. In the long run, technology eased the monitoring of the company processes, for example, supply chain, and delivery.
The company has also passed through an extensive range of opportunities to grow. The primary design to demonstrate this is the labor associated with the manufacture of the goods. China has the largest amount of manpower available for the production of the company’s goods. The fact of the available labor can guarantee the company a chance to be a leading producer of the goods in worldwide. Central China has a population of over 250 million people. It is the responsibility of the company to expand to Central China in order to get low-cost labor for the making of their products.
Growth in Europe was also retarded by numerous factors. Among them are geographically, Europe was fragmented and not homogenous market such as the United States; therefore, penetration in each country was cumbersome. Secondly, the sourcing, buying, and logistic business was sophisticated and European retailers were just not used to outsourcing. Thirdly, retailers had their buying offices. Ultimately, it was tricky for the company to garner business in this core area. Lastly, buyers opted to diversify the number of vendors that provided creative services so they could generate a variety of ideas to make up for the lack of scale and design in-house.

Technology is costly to implement. As time progresses, the company will make much profit following the implementation of the Information Technology program. Therefore, it is significant for the corporation to embrace technology only if it is in a stable state. Technology in Li and Fung’s company will help in monitoring the supply chain and the distribution of their goods in the long run. Technology also has a crucial part to play in the production of the product by reducing the cost of production, and this is enabled by reducing the level of manpower applied.
Once the company realizes the importance of the cheap labor available in Central China, it will see a decrease in the production cost of the final product. Availability of cheap labor is necessary for the company since it reduces the amount of capital input. Cheap labor also increases the quantity of product produced by the company hence many pieces are sold. Therefore, cheap labor increases the chances of business expansion to the various parts of China with available energy.
Development in Europe had an undesirable impact on the firm’s growth. As argued above, the company had many difficulties in expanding its services to Europe. Europe has a considerable population that did not reflect the amount of profit made by the company. Also, the market in Europe was not homogenous thus cumbersome to meet the needs of each person in the region unlike other markets like the United States.

Alternatives

In addition, the company should invest much money in technology and do away with the manual labor. Replacement with technology will see the company reduce the cost of production while increasing the quantity of the product produced. Technology will also in the process help in the watching of the supply chain and the circulation of the product in the marketplace.

Recommendations

I would recommend that the Li and Fung’s company should maximize the use of technology in the business so that they can maximize profit while reducing the cost of production. The company should install and update their software regularly. Although it is costly, it will yield much profit.
I would also recommend that the company should cop up with the current needs of the market. The company should study their market and come up with the solutions that will help in satisfying the needs of the market at large. They should also put much effort to satisfy their primary market. In the process, fewer goods should be sent to the minor market to avoid wastage of their products.
Lastly, I would recommend that the company should diversify on the types of goods they make. The company should also be keen to expand their market to be worldwide so that they can improve the profits they make yearly.