Cheung Kong Company: Li Ka-Shing

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This is a rare case of a small entrepreneurship venture turning out to be one of the infallible ventures over time. Surely, Li Ka-Shing did not create an empire instead; he created a new era, causing a revolution in small and micro-enterprises.

How did LK avoid the perils of new venture failure?

This business genius experienced new venture failure rarely as he established his business empire. He avoided running into excessive debt, which brought many companies down. At around that time, many local property investment companies buckled under the weight of huge debts. Mr. Li escaped this wrath by apportioning landowners some of his future profits. This played the trick and he evaded the hustle of paying up-front for land.

What did LK do to ensure growth in his business?

Mr. Li employed several tactics that ensured his business remained inundated.

The first one involved buying new business ventures. In 1979, he bought a Hong Kong-based British trading empire: the Hutchison Whampoa. This is the largest private port operator in the world. It has outlets in Hong Kong, China Australia, and Indonesia. DiCenso (2009) concurs that acquiring new business ventures has the largest short-term growth opportunity.

The other growth strategy that Mr. Li employed was to offer a wide variety of products. This is diversity and it helps to cushion business from running into losses should one sector go through dry spells. He invested in real estate, finance, retail, manufacturing, media, energy, biotechnology, and manufacturing. According to DiCenso (2009), diversification is an important tool in business growth. This creates an internal replenishing mechanism whereby one sector can support the other. This also reduces business-running expenses by merging key areas like human resource and training departments.

Cheung Kong Company finally found its way to the stock exchange. Through this move, Mr. Li gained popularity and won the trust of many across boundaries. Consequently, in 2002, his initial public offer recorded 120% oversubscription. This was a landmark in his career as a businessperson.

What has been LK’s harvest strategy over the recent few years?

Mr. Li’s innovativeness continues to vibrate even to date. Recently, he has employed diversified strategies to harvest his fortunes. He not only identifies new business ventures but also implements them. An idea in mind never conquers and this business icon seems to know more of this. Building a business and knowing when to quit is Li’s agenda in thriving his business. For instance, in 1994, he made a well-informed investment in Orange, a foreboding mobile phone company. After making quite a fortune, he sold his stake in Orange in 1999, making a whopping US$15 billion. This prudent move can never fail any business. Timing is a decisive virtue in business that hardly works against its implementers (DiModica 2009).

He knows how to hunt and hire seasoned professional managers most of them from abroad. Hiring the right is the best move that a company can do to stay in course of growth (Articlesgarage.com, 2009). This extends to delegating duties to different firms, which know how to handle the issues in question.

Are there any approaches to firm growth that can help to understand LK’s business development?

There are firm growth approaches useful in explain Li’s business development. Looking at the strategies that he used to establish his empire, different approaches explain his strategy. Business strategists and analysts concur that one sure way to business growth and vibrancy is through diversification. This involves establishing different business ventures to run concurrently. This puts a fallback plan in place where each sector benefits from the other. The resultant symbiotic relationship cushions the poor-performing sectors during turbulent economic times (Banta, 2008). For instance, the real estate business may be underperforming because of the current mortgage meltdown, but the information technology sector is not undergoing the same. High returns from information technology can support the real estate sector as the market stabilizes.

Knowing the right time to exit clearly explains Mr. Li’s strategy. This should happen when a venture is at its peak to reap maximum benefits. Mr. Li did not fall short of this and he ended up reaping millions after trading his stake in Orange. Lemberg (2009) posits that one can make one big leap into business growth through good timing. This involves knowing when to exit from a business venture and when to enter into another.

The other approach is listing companies in stock markets and watches as your fortunes multiply. However, this comes through winning the trust of potential investors. Winning trust calls for quality work and believing in one’s abilities to deliver. A satisfied customer will always come back with more customers thus establishing an empire just like Mr. Li Ka-Shing.

Mr. Li’s case represents rare business acumen that every businessperson willing to prosper and build empires should imitate. Starting from scratch and rising through the ranks to become one of the richest men in the world, is an astounding achievement. This happened through sheer hard work and perfect timing coupled with luck. At one point in his career, Mr. Li could work for 16 hours a day. The desire to break and defy common beliefs can propel people to great heights. Though retired, Mr. Li is working in concert with his son to dispute the myth that, wealth cannot run down three generations in Chinese families.

References

ArticlesGarage. Com. (2009). Steps to Help Your New Business Start, Grow, and Profit. Web.

Banta, C. (2009). Why Seek Assistance in Managing Transitions? Web.

DiCenso, C. (2009). Merge or Acquire Another Business. Six Dimensions for Growth. Web.

DiModica P. (2009). Hunt For Business: Grow Now or Be Eaten! My Article Archive. Web.

Lemberg P. (2009). Marketing, Business Strategy, Time Management and Business Coaching. Business Acceleration Article. Web.

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Cheung Kong Company: Li Ka-Shing

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