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What Current Trends Affecting Operations Are Reflected in the Success of a Firm Such as Li & Fung?

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What current trends affecting operations are reflected in the success of a firm such as Li & Fung?
Li & Fung considered global operations and global supply chain become more and more important nowadays because of the increase of global competition. Li & Fung immediately paid more attention to develop modern online communication and transportation capabilities, which can make that the company maximize comparative advantages. There are 5 or more links in supply chain, and Li & Fung might do better if it can control supply lines in order to provide faster and high-quality products and cater the need of customers.

Li & Fung operates on an international scale. How does this factor affect the firm, both positively and negatively?
At that time, China has joined in WTO for almost ten years, and kept his promise that actively participated in international economic and trade exchange and tried his best to standardize the order of market. In this situation, local business became to reach more foreign customers. In fact, China’s domestic market had large growth potential. At the time of Chinese market, products were divided into two types. One type of products was cheap but had low quality. This kind of products could only satisfy basic needs. Another type of products was luxury good. However, the products which had lower price and nice quality were hardly found in China. The reason why Chinese market did not have lower-cost and high-quality products was that domestic trade could not be connected with foreign trade. Therefore, operating as a network company was one of the best choices. The advantage of being a network company on the international scale was that Li & Fung met the demand of market, which could help Li & Fung created more benefits. Also, it is much easier to move in and out of markets. However, the disadvantages of being network company is that international scale could increase spread of communicable disease. Li & Fung would face much greater competition, and it did not have enough resource to compete at international scale.

How would you characterize the supply chain configuration of fashion houses and retailers that use Li & Fung's services? Is this an example of vertical integration or outsourcing?

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