Given what you know of Li & Fung, is this a good move for the company? What is required of a firm as it alters a distribution channel or its place in a distribution channel? What is required of a firm in managing a consumer brand? Does Li & Fung have the necessary skills to succeed in these areas? Li & Fung is a logistic/distribution (place) company (one stop sourcing) and supplying consumer brands. It’s hard to produce their own brand because they are usually having relationship with consumer brand. They also need to have quality control, marketing and other stuff. The success of the company depends on the company knowledge. Besides, in order to produce their own brand, Li and Fung also needs to design their products which suit to the market. Li and Fung also needs to know how to market the products. If they are making their own brand, it makes their consumer become their own competitors as well and it is less likely for the consumer to keep using Li and Fung as their sourcing company.
What other actions might Li & Fung take in order to ensure it stays strong in the US market? They need to diversifying in US by opening their own store, specializing the marketing or factory rather than focusing in the intermediaries, supplying other products other than clothing. They can make new things (transplant the skills set into a new unit) by using the existing sources (eg. Zipper factory-> making backpack rather than only clothing)
