1 . Essential questions
A. Rising cost of labor and raw materials
One of the Li & Fung's strategies is definitely low cost finding. However , the cost of raw materials and also labor has increased significantly in China. With this situation, production enterprises have been completely left with no other alternative, but to pass on price go up to customers. It is in dilemma regarding the price go up, it had actually become a foregone conclusion. Retailers are certainly not sure what can be transferred to customers and what can't be. Taking care of Director of Li & Fung Group William Fung said that improved competition in China's labor sector had led to income increases by about 20 percent this summer. Due to rising labor expense, China is around the verge of losing the advantage in the world economic system. So , China's rising labor costs offers prompted Li & Fung to move its creation of clothing and other labor-intensive goods to countries just like Bangladesh, Vietnam and Dalam negri where cheap labor is available. B. Producing countries are unable to use the lifung. com business strategy. Increasing cost of labor and unprocessed trash and elevating the getting power of expanding countries trigger that Li & Fung needs to consider other producing countries for business. To deal with these problems, they have to increase their organization area. Yet , the expanding countries may not be able to follow the lifung. com business approach because of the current condition of the internet environment. Although the internet environment achievement improving, you will still find some countries have not developed yet. The strategies which can be related to online can be the among the factors that Li & Fung succeed. Yet, they should find various other solutions and make new strategies for off-line to control all companies situated in developing countries which present poor condition of the internet.
2 . Suggestions/Strategies for future years. (How to overcome the problems) C. Changing the strategy from a " low costвЂќ strategy to a strategy...