Li & Fung Case Study
Li & Fung is an export trading company from Southern China that was founded back in 1906 by Fung Pak-Liu and his partner Li To-Ming. Li & Fung grew from a traditional export trading company to global supply chain management company it is today. After the passing of Liu, To-Ming decided to sell his shares. After both graduating from Harvard, Fung’s sons, Victor and William took over the company in 1974 and moved it to Hong Kong.
The Fung brothers were both highly intelligent individuals. They used new ideas and innovation to turn the company into a more professionally managed firm that went public in 1992 (MacFarlan, 2005). Li & Fung manages the global supply chain for high volume and time sensitive consumer goods for large companies such as Bed, Bath & Beyond, Avon, The Limited and Warner Brothers (MacFarlan, 2005). The company operates in 40 economies and employs over 20,000 people worldwide (MacFarlan, 2005).
I think part of the success of the company was that the brothers worked so well together. They each had their own strengths. While Victor was more of the strategic thinker and thought long-term, William focused on the operations and making money. As the CEO of the Group’s e-commerce stated a combination of both thought leadership and execution, with the unique relationship between Victor and William cementing the entire organization Although the company was spread out with different offices around the world they provided a centralized IT, financial and administrative support out of their Hong Kong office. However they had a decentralized corporate structure so that they were easily able to keep up with the up and coming fashions because as we know the styles are constantly changing. Li & Fung also had a very competitive compensation package and had bonuses that were based on profits which was different than other companies that had more restrictions. Along with the internet revolution, Victor and William were fast to understand and adapt
The Fung brothers were both highly intelligent individuals. They used new ideas and innovation to turn the company into a more professionally managed firm that went public in 1992 (MacFarlan, 2005). Li & Fung manages the global supply chain for high volume and time sensitive consumer goods for large companies such as Bed, Bath & Beyond, Avon, The Limited and Warner Brothers (MacFarlan, 2005). The company operates in 40 economies and employs over 20,000 people worldwide (MacFarlan, 2005).
I think part of the success of the company was that the brothers worked so well together. They each had their own strengths. While Victor was more of the strategic thinker and thought long-term, William focused on the operations and making money. As the CEO of the Group’s e-commerce stated a combination of both thought leadership and execution, with the unique relationship between Victor and William cementing the entire organization Although the company was spread out with different offices around the world they provided a centralized IT, financial and administrative support out of their Hong Kong office. However they had a decentralized corporate structure so that they were easily able to keep up with the up and coming fashions because as we know the styles are constantly changing. Li & Fung also had a very competitive compensation package and had bonuses that were based on profits which was different than other companies that had more restrictions. Along with the internet revolution, Victor and William were fast to understand and adapt
References: McFarlan, F.W. & Young, F. (2005). Harvard Business Review: Li & Fung (A)(B) Internet issues (pp. 1-23). Valacich, J. & Schneider, C. (2010). Information Systems Today: Managing the Digital World. Upper Saddle River, NJ: Pearson Education, Inc.