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Threats Faced by Li & Case Study

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Threats Faced By Li & Case Study

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The supply chain solution provided by Li & Fung is more sophisticated than the other trading companies.

Li & Fung has strategic competitive advantage over its competitors as they have the expertise in the relevant field.

Also company has a strong corporate culture and they have been able to manage diversity effectively which has helped them in gaining competitive advantage.

Weaknesses:

One of the weaknesses of the company is that they prefer to stick to the old business model rather than using online business model.

The other weakness of the company is that they do not have the expertise in it field and therefore they have to outsource such tasks.

Opportunities:

According to the market research conducted by Li & Fung, there is a lot of potential if the company targets SMEs by providing online services, as this will reduce the cost and company can offer services to SMEs at relatively lower commission than before. Only in USA, the market has a potential of $54 billion.

Threats:

Online business will affect the profitability of the company as this would decrease the traditional sales of the company.

Investors prefer to invest in companies that are also operating online.

With potential in the industry and high profit margins, more companies are looking to capitalize from this growing industry.

Porter's Five Forces:

Buying power of supplier:

As company does not only use few suppliers...

Same is the case with Li & Fung, the company is successfully operating according to its traditional old business model but the advent of new internet technology has posed serious threat to the competitiveness of the business.
In order to operate profitability and remain competitive in the market the company has to incorporate the new technology into its operations and have to formulate not only defensive but also offensive strategies to retain the market position and increase the market share.

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