Placement Report

2016/17 LI & FUNG, NEW YORK BABITA PUN | N0591147 WORD COUNT: 2650

|1

Abstract

The following report is an analytical record

documenting an intern’s learnings and experience during the placement year at Li and Fung, New York. The placement was conducted for six months from FebruaryAugust 2017 and was completed as part of a sandwich degree at Nottingham Trent University.

The report provides an in-depth summary of the company’s profile, values, policies and principles along with the intern’s role within the organisation and specific learnings enhanced over the past six months whilst on placement year.

Products and services offered by Li & Fung and detailed financial information is also disclosed. The report includes a comprehensive SWOT analysis of the company as well as the placement to formulate conclusions and recommendations based on the intern’s experience and insights. Evidence of work and trainings undertaken has been recorded and presented to provide a fuller understanding of the job role.

|2

CONTENTS 1.0 COMPANY PROFILE………………………….…5

1.1 Company overview……………………….…..5 1.2 Product offering…………………………….…6 1.3 Policies and procedures………………….…..7 1.4 Management structure……………………..…8 1.5 Markets/ customers and competitors….……9

2.0 PLACEMENT ROLE……………………………10

2.1 Role in Organisation ………………………..10 2.2 Job function…………………………….……11

3.0 SWOT ANALYSIS OF COMPANY…………..…12

4.0 SWOT ANALYSIS OF PLACEMENT………..…15

5.0 CONCLUSIONS/ RECOMMENDATIONS…..…16 6.0 REFERENCES……………………………..……17

|3

List of Figures Figure 1.2.1- Mens showroom ESQ by Esquire……………………………….…6 Figure 1.2.2- LF Collaboration list….………………………………..………….…6 Figure 1.2.3- Target x VB……………………………..……………..…………..…6 Figure 1.4.1- Collabor8ors group management hierarchy ………..……………8 Figure 1.3.1 Li & Fung customers list ……………………………………………..9 Figure 1.3.2- Li & Fung footprint ………………………………………………..…9 Figure 2.2.1 Workspace …………………………………………………………..11 Figure 2.2.2 LFAmericas showroom ……………………………………………..11 Figure 2.2.3 Garment district/ location of office …………………………………11 Figure 3.1- Li & Fung economy reach…………………………………………….13

List of Tables Table 3.1- SWOT Analysis of Li & Fung, Author’s own………………………….14 Table 3.2- Porter’s Five forces analysis, Author’s own…………………………..14 Table 4.1- SWOT Analysis of Placement year, Author’s own……….…………..15

|4

1.0

COMPANY PROFILE 1.1 Li & Fung Overview Li & Fung is a Hong Kong based firm, a leading company in consumer goods design, development, sourcing and logistics for major retailers and brands around the world. Li & Fung have more than 110 years of supply chain experience, providing unrivalled access to global intelligence, design, merchandising and product development (Lifung.com, 2017). Li & Fung covers all aspects of the supply chain from product design and production management to quality control and shipping. They are a global sourcing agent in the apparel business with a major commanding force. (Li & Fung Interim Report, 2017) Operating through a global network of over 300 offices and DCs in over 40 economies, Li & Fung’s 15,000+ suppliers and over 21,000 employees provide high quality consumer goods to retailers around the world. (Lifung.com, 2017) Li & Fung operate one of the most extensive global supply chain networks in the world with global outreach attracts more than 8000 customers in over 100 countries. (Lifung.com, 2017) Li & Fung’s goal is to “create the supply chain of the future” and help their customers navigate the digital economy and to improve the lives of one billion people in the supply chain. (Li & Fung Interim Report, 2017) The company’s three-year vision that focuses on the key elements: speed, innovation and digitalisation sees creation of a digital platform that will connect the entire supply chain to maximise efficiency, greatly improve response speed, and provide end-to-end visibility for their customers. (Li & Fung Interim Report, 2017)

|5

1.2 Product Offering Products:

Figure 1.2.1

LFAmericas operates as the American apparel division within the Li & Fung Private Label Group (PLG) and comprises of Ralsey, Oxford collections, Oxford men’s and Youngstuff apparel. LFAmericas are multiclassification experts in soft goods such as: swimwear, fully fashioned sweaters, dress shirts, cut and sew knits, soft wovens and collections across all categories – womenswear, menswear, childrenswear – at all levels of retail from top tier department stores, specialty and mall based to mass and discount retailers. (LFAmericas.com, 2017) The NY HQ has a team of over 100 designers, creating innovative and exclusive customer-centric designs alongside 24/7 CAD support offering original print, pattern and colour creations.

LFAmericas also offer hard goods such as: footwear and accessories, gifts, home, beauty, seasonal celebrations, fireworks, sporting goods, toys, travel goods.

LFAmericas celebrates success as the supplier for designer retail collaborations. The most recent successful collaboration includes Victoria Beckham for Target 2017. Fig 1.2.2 shows a list of other brands that LFAmericas has previously collaborated with.

Figure 1.2.2

Services:

- Fung Global Retail & Tech: Research and business intelligence, - Catalyst: Retail security systems - Collabor8ors: In-house creative think tank - The Workshop and The Kitchen: Open innovation unit LFAmericas services division conduct macro and micro global retail research with monthly store sales and product assortment analysis, offering branding solutions, and identifying whitespace opportunities.

With the contribution of the services team, Li & Fung leverage their extensive global reach, depth of experience, market knowledge, and technology to help brands and retailers quickly respond to evolving consumer and production trends.

|6 Figure 1.2.3

1.3 Policies and procedures

The foundation of Li & Fung’s culture lies within their history and values. The following is a list of general principles that Li & Fung focuses on in order to conduct the business and create products and provide service in an ethical manner:

1.

Human and labour rights, and equal employment opportunity: Provide

equal employment opportunities to all employees and applicants regardless of sex, age, race, religion, colour, national origin, gender, etc

2 .

Anti- Harassment/ Discrimination Policy and Procedure:

Prohibit sexual harassment, unlawful harassment and any type of discriminatory treatment.

3.

Electronic and Communication policy: Ensure company’s

electronic communications systems and information systems are only used for business purposes.

4 .

honesty, integrity and abide by rules and regulations.

5.

conflict with interests of the company.

6.

Comply with all applicable anti-bribery laws.

7.

Business integrity and ethics: Perform duties with

Conflicts of interest: Ensure personal interests doesn’t

Anti-bribery and anti-corruption:

Accurate financial information and records: Ensure all

transactions are properly included in records and are available for audits.

8.

Safeguard the company’s unpublished price-sensitive information.

9.

Insider trading on company securities:

Supplier Code of conduct: Work with suppliers to cultivate safe

working conditions and promote responsible environmental practices.

10.

being responsible with office equipment and consumption of resources.

Environmental protection: Adopt good environmental practices by |7

1.3 Management Structure

 

The Collabor8ors group has a low level hierarchy structure consisting of VP of Creative, Marketing assistant, Graphic designer, Sustainability project co-ordinator, Creative development intern and a summer intern.

The management of the intern program was more relaxed on this placement due to the fact that the intern had been introduced to the company with the previous role within the organisation. As there wasn't an intern in the department prior to the start date of the intern, no handover procedure was conducted. However the Marketing assistant was responsible for welcoming the intern to the team and providing all information on the ongoing projects. The VP was always available if needed and ultimately was the one who briefed all the employees in the team about the projects and the roles of each individual.

The team itself was quite small and collaborated well together to brainstorm ideas and formulate reports and complete projects. The main advantage of having a small team was that working skills were enhanced and better productivity was noticeable due to reduced communication time and increased efficiency.

The C8 team hierarchy

Figure 1.3.1

|8

1.4 Market, Customers and Competitors

Figure 1.4.1 Li and Fung have an extensive customer and clientele base. Catering to a wide range of customers, from big box retail giants such as Walmart and Target, to off-price retailers such as TJ Maxx, Burlington to department stores such as Macy’s and Hudson’s Bay Co. as well as e commerce players such as Amazon. Below is an image displaying some of our customers throughout Li & Fung including American and European division.

Li & Fung’s have no direct like-for like competitors that provide supply chain management and apparel manufacture and production that is comparable in terms of scale and global outreach. However, some of our major rivals within apparel manufacturing are companies such as Topson Downs and Décor Apparel who also supply similar product offering such as knits, wovens, sportswear, denim, kids, mens and womens to retailers such as Target, Walmart, Urban Outfitters, Hudson’s Bay, Nordstrom, Forever21, Zara, Mango, Bloomingdale’s, Nike, etc.

Li & Fung do their best to keep ahead of these competitors by providing a value add element to their retail partners. This is where the Collabor8ors team come in, the C8 team bring innovative ideas to the tableprovide in-house B2B marketing strategies, branding and consulting in addition to apparel offerings.

The C8 team analyse the retailer’s current business by conducting comprehensive in-store analysis and researching future trends to identify whitespace and pitch the concept respectively.

Unable to disclose information of their suppliers. Based in over 40 economies.

Figure 1.4.2

|9

2.0

THE ROLE

2.1 Role in Organisation The placement role was titled Creative Marketing intern and was situated in the Collabor8ors group within LFAmericas. The Collabor8ors (C8) team is an in-house creative team that focus on finding new innovative ideas and creative services to significantly enhance and grow the business. The C8 team managed all the internal marketing and B2B branding services for LFAmericas customers working in collaboration with all the cross-functional divisions i.e. Oxford collections, Oxford mens, Youngstuff and Ralsey.

The intern’s primary role in the organisation was to support the Creative Shared Services team in facilitating cross-selling, identifying retail whitespaces and growing the business to ultimately increase top line sales. Projects debriefed on a weekly basis ranged from internal corporate decks and videos, to external branding and marketing, to retail intelligence and analysis.

The intern, alongside summer intern and VP Creative’s guidance and supervision had the opportunity to identify a B2C business plan for potential Li & Fung business expansion. The interns worked together to research, and put together a pitch presentation and had the opportunity to present the business plan to Exec Director and President of LFAmericas. It was well received by the management and will be taken

| 10

 

2.2 Job responsibilities

Figure 2.2.1

Contribution to cultivating new accounts as well as working with cross functional teams to research and explore the retail market to identify business growth opportunity areas was a vital role of the Creative marketing intern. The whitespace identification process was followed by assistance of creative design and direction through initial brainstorm, execution and final compilation (inc. storyboard, copy writing, layout and visuals, branding and marketing). The intern was responsible for maintaining correspondence with thirdparty digital, print and marketing agencies and ensuring project background, budget, deliverables were briefed and deadlines were communicated clearly. The role required the intern to assist the graphic designer with brand creation, logo development and brand asset (hangtags, banners, trims, etc.) for projects and pitch decks.

The role of the intern also included managing the social media channels (mainly Instagram and Pinterest) and ensuring clear communication and consistent message were portrayed across all platforms. Monthly engagement and growth was analysed and presented to the team for review.

Figure 2.2.2

The intern also assisted the VP with research on influencers and celebrities for potential retail collaborations. Consumer demographics reports were updated monthly and shared with the cross-functional teams. The intern would work together with Sustainability project co-ordinator to attend panel discussions and talks around the topic of sustainability and present key takeaways and business opportunities to the team.

General admin duties such as booking photographers and models, preparing call sheets and visual concept for photoshoots as well as setting up showrooms, dressing mannequins, creating look books and handouts for client meetings was part of the intern’s role.

Figure 2.2.3

| 11

3.0

SWOT ANALYIS LI & FUNG

1. Li & Fung are a well-established family company with a reputable name and global outreach of over 8000 customers in over 100 countries. They have over 110 years of trading history and expertise.

Strengths

2. Li & Fung have more than 260 offices in 40 economies with 14000 vendors around the globe. With a global sourcing network and economies of scale, Li & Fung can offer lower cost and more flexible sourcing than the competitors and are unchallenged in the global outreach.

3. Li & Fung have expertise to operate on both hard and soft markets, they offer extensive range of products from apparel soft goods to hard goods such as home and furnishings, footwear and accessories, sporting, camping equipment and seasonal goods globally in different markets.

4. Li & Fung have in-depth knowledge and data readily available of their extensive and integrated client base. Li & Fung’s loyal customer base include an array of brands and retailers, ranging from Walmart and Target to brand such as Calvin Klein, high street retailers such as Marks and Spencer and e-commerce players such as ASOS and Amazon, and many more.

5. Li & Fung have sufficient internal capital available for investments, product expansions and acquisitions.

6. In-house design team employed globally in NY, London, HK offices allows flexibility and interactive design process with an ability to adapt quickly to changes.

7. Li & Fung’s strategic acquisitions helps expand variety of services into new markets contributing to the company’s exponential growth.

Weaknesses

8. Li & Fung provides up-to-date fashion and market trend information to clients.

1. Li & Fung operates as a traditional supply chain built to optimise for cost, but need to focus on speed. Traditional model results in long lead times, leaving threat from competition.

2. Currently only operating as a B2B. With the current changes in the macro retail environment, the need to be agile and digital is crucial.

3. The company still has a traditional corporate culture with a closed plan office layout.

However they are in process of eliminating old culture and adapting to modern advancements such as open floor plans, digitalisation, etc.

4. There is a lack of creativity and risk taking on large projects Risk management considerations are applied too often due to the scale of the business and its impacts.

| 12

 

1. Speed: working towards the 3 Year Plan where the goal is to operate as fast as startup by creating a market streamlined supply chain management system. This will decrease lead times and increase speed to market for customers. (threeyearplan.lifung.com, 2017)

Opportunities

2. Digitalisation: working on an effort to digitalise supply chain resulting in end to end visibility for customers. Li & Fung need to be the forefront of digital disruption by capturing data to drive analytics and improve speed, cost, lead time, working capital, inventory, sustainability and traceability for all the partners. (3D and visual sampling) 3. Innovation: providing differentiation and innovative business models to the retail strategic partners. Li & Fung are trying to obtain an innovative culture by creating think-tanks and innovation groups within the company to expand service offering and open innovation platform turning idea to real business. (For e.g. start up incubators such as Collabor8ors group, The workshop, The kitchen, etc) 4. Sustainability: Opportunity to change the textile waste in the fashion industry. Li & Fung supply millions of units to retail giants such as Walmart, Target, Primark. Internal sustainability initiative will allow Li & Fung to take the first towards the . Must expand its product line to enhance its sustainable competitive advantage.

5. Tapping into B2C model- Li & Fung are known as the behind the scenes mastermind, Li & Fung could leverage all the expertise & data analytics and use it to go direct to consumer, which in time will provide higher margins, better inventory control, real time data and analytics.

6. Breaking down corporate silos, removing office cubicles with an open plan office layout.

This will allow employees to be collaborative and modernise the office space.

7. Logistics- deployment of more technology- voice pick, vision pick, drones (Li & Fung Interim results, 2017) 8. Further acquisitions - Li & Fung’s strength lies in Acquisitions of other businesses. They could acquire businesses that deal directly with customers or e commerce businesses so gain knowledge rather than diversifying and going to new market with initial investment.

Figure 3.1

| 13

Threats

1.

The macro factors in the current economy affects the global fashion industry e.g. Brexit/ American Presidency could affect trade relationships and laws with partner countries.

2.

Phasing out of the “middleman” – many brand and retailers are looking to go direct to supplier to cost the middleman costs which is a problem that Li & Fung is currently facing and need to deal with, losing its client base.

3.

Bricks and mortar store closures- stores face softer growth and emergence of ecommerce brings immense competition.

4.

Possible loss of employees to competitors (new innovative, digital, tech based companies)

5.

Acquisitions for product/ market expansions may result in venture failure and hinder the brand name instead.

6.

High level of competition from vendors/suppliers that exist within the product/service assortment.

7.

Fashion industry undergoing a sustainability realm, questioning whether the future holds fast fashion. The shift towards sustainable and responsible production, circular economy could affect the large volume clients and ultimately the LF business.

Table 3.1 Porter’s 5 forces analysis on Li & Fung

Threat of new entrants Low threat from new entrants to compete against a giant like Li & Fung.

Supplier power Sold raw materials to supplier at premium

Competitive rivalryAcquisition strategy eliminating competition.

Buyer power Solid client baseconsiders supplier of high value.

Threat of substitution Potential threat with new entrants in the industry.

Figure 3.2

| 14

4.0

SWOT ANALYIS PLACEMENT

Strengths

Weaknesses

• Developed a strong interest with exposure in the creative marketing field.

• Global viewpoint of the fashion industry and an insight to American consumerism and buying behaviour.

• Created strong contacts and networks within the company.

• Experienced a new culture, met new people and chance to get out of comfort zone// Multi-cultural takeaways and experience from internship year.

• Gained interpersonal skills such as initiative, time management, problem solving and decision making, etc • Attended panel talks and events relevant to personal and professional interests.

• Learned to train and supervise two interns ( 1 summer intern and 1 week intern) within the group and trained new Marketing assistant prior to completing internship.

• Thorough induction training with intern handover and exit interview with feedback session conducted by the company.

• Great kick start to career with a global rounded experience.

• HR workshops and trainings were frequent and useful.

• Sample sales across designer collaborations, home, beauty, etc.

• Unsure if a supplier would be an ideal business/ retailer to pursue a career in after graduation.

• Traditional culture with corporate silos.

• Filled in the job role of Marketing assistant after his departure leaving increased workload and added pressure to job role and completion of tasks.

• Completion of projects difficult due to multiple projects ongoing at the same time.

• Global company with ongoing intern program meaning replacement hired every six months.

• Lack of creativity and risk-taking due to the scale and impact of the business.

• Besides interns and entry level employees, majority staff were mature and had traditional views and opinions.

• Not guaranteed a year-long placement, therefore had to re-interview for a different job position and reapply for J1 visa which added additional costs.

• Only 5 paid holidays allowed per six-month internship period.

Opportunities • Contacts and network within the company • Opportunity to present business project proposal to EVP and President of LFAmericas.

• Successful B2C business project pitch leading to potential business expansion for Li & Fung.

• The departure of Marketing assistant allowed more responsibility and higher level of trust.

• Exposure to senior management and VPs across divisions in LFAmericas.

• Opportunity to work with company in global locations after graduation.

Threats • HR difficulties in approval process of second half of placement, time consuming procedure.

• Visa, flights and deposit costs and moving to a different country not viable for everyone.

• Extensive length of stay in a different country far from friends and family could lead to home sickness.

• Threat with retail economy and its consequence on Li & Fung for future job prospects.

• Difficult to obtain US Graduate visas • High staff turnover due to constraints with progression and hierarchy because of traditional corporate culture.

• Increased competition for job prospects post graduation. (fellow students and competing universities)

| 15

5.0

CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

Upon successful completion and reflection of placement year, it can be concluded that Li & Fung has been a great company to work for. The overall internship program experience across both divisions have been very positive and honed the intern’s skills providing a strong knowledge of different market and consumers at a global scale.

Understanding of Marketing and Branding has immensely increased, which contributes and fits well with the intern’s professional aspirations. Skills such as communication, time management, attention to detail has been gained and work ethic has been enriched. Besides interpersonal skills, IT skills vital for final year at university year as well as future endeavours go forward such as Photoshop, Illustrator and InDesign has been enhanced.

While the intern was able to learn a lot within the office, the out of office events, panel talks, and volunteering days were very memorable and has helped shaped the intern’s experience and provided a well and rounded overview of the industry.

The internship program is highly recommended as it has been profoundly beneficial for the intern’s learnings of the fashion industry and how a global supplier like Li & Fung operates. The program has allowed the intern to gain invaluable skills alongside the opportunity to experience a new culture, meet new people and network with people within the industry.

5.2 Recommendations Li & Fung have already started considering expansion into the B2C market by incorporating digitalisation into their brick and mortar business. This will provide the company with a competitive advantage to reach a new audience and ultimately gain a share within the new market.

Li & Fung also have ongoing transformation in progress to transform the traditional office space an open plan communal space with laptops and embracing collaboration and eliminating corporate silos.

This will be a great step towards progression and will allow Li & Fung to achieve their 3 year goals of being faster, more innovative and going digital.

A recommendation or an area for improvement for the internship program would be to provide all the interns within the company the opportunity to have a say and share their creative ideas that could be tangible for the business. While the second half of the internship allowed the intern to be creative and present a business plan to the President of LFAmericas, it wasn't available whilst working at Ralsey Group. The interns should all be given a platform and an opportunity to present a pitch for the growth of the business, it would be beneficial for the interns to work on an exciting concept and for the business to hear about the ideas that the interns can contribute to the business.

| 16

6.0

REFERENCES

- Li & Fung Interim Report. (2017). [ebook] Hong Kong: Li & Fung, p.4. Available at: http://www.irasia.com/listco/hk/lifung/annual/ar174023-e00494.pdf [Accessed 9 Sep. 2017].

- Li & Fung Interim Report 2017. (2017). [ebook] Li & Fung, p.3. Available at: https:// www.lifung.com/wp-content/uploads/2017/08/ir2017.pdf [Accessed 10 Sep. 2017].

- Li & Fung Interim Results. (2017). [ebook] Li & Fung, p.17,35, 39. Available at: https://www.lifung.com/wp-content/uploads/2017/08/pre170824.pdf [Accessed 9 Sep. 2017].

- Li & Fung. (2017). CEO Forward. Available: https://threeyearplan.lifung.com/ceoforward.html. [Accessed 9 Sep. 2017].

- LFAmericas. (2017). About us. Available: http://lfamericas.com/categories/.

[Accessed 9 Sep. 2017].

| 17