Levi Strauss & Co. An Analysis EEP 142 Group Project Young Lee James Moon Michael Lin Collection •The Levi Strauss assembly is experiencing privationes and is constant to under-pershape in the denim jean dispense. •The unshaken faces the open collection of a dominant unshaken losing dispense divide when past unshakens invade the dispense. Collection Background Successes Race Solutions Obligation Conclusion Q&A Background - History •The assembly was founded by Levi Strauss in 1853 principally hawking wholesale dry consequence. The assembly was founded in San Francisco, California. A tailor denominated Jacob Davis purpose of an subject to use copper rivets to repair the points of defecate on pants. •Davis and Strauss forfeitured the indisputtelling of the subject of using copper rivets in investment on May 20, 1873. Collection Background Successes Race Solutions Obligation Conclusion Q&A Background - Assembly Augmentation •The newfangledness of the rivets in the jeans contrariantiated Levi’s jeans from others owing of its acceptiond durability. •Over the years, Levi’s jeans tend behove past general, initially due to its durability. Jean employments ample, targeting contrariant consumers. Levi Strauss & Co. so-far seizes most of the denim jean dispense, behoves the comprehensivest creator of jeans, and income stretch $1 billion by 1974. Collection Background Successes Race Solutions Obligation Conclusion Q&A Background - Duration Course •1853: Levi Strauss originates hawking dry consequence in San Francisco. •1873: Levi Strauss & Co. indisputtelling established jeans and originate hawking them. •1912: Koveralls, denim playsuit for offspring, is primitive nationally sold employment for the assembly. •1935: Assembly hawks primitive cerulean jeans for women. •1940s: U. S. balancenment issues denim employment vesture for employees in the shelter toil. •1974: Assembly sales stretch $1 billion •1986: Assembly introduces Dockers as a new incidental course of vesture Collection Background Successes Race Solutions Obligation Conclusion Q&A Successes - Engrossment •Since the indisputtelling of the rivets in jeans in 1873, the assembly achieved engrossment possibleity. •Monopoly possibleity was formed through initiation screens. –The indisputtelling granted the unshaken engrossment hues to hawk established jeans. •Also by employment contrariantiation –The rivets on the jeans acknowledged for longer durability, a shape of perpendicular contrariantiation. Employment contrariantiation and screens to initiation acknowledged the assembly to form past generality and dispense divide. Collection Background Successes Race Solutions Obligation Conclusion Q&A Successes - Expansion •By 1977, Levi Strauss & Co. is the world’s comprehensivest jean creator. •Department stores and boutiques hawk Levi’s employments and are subjoined channels of arrangement for the assembly. •Levi’s provides a comprehensive collocate of employments that target contrariant dispense segments, capturing ask-fors. •After the free of the 501 employment course, Levi’s enjoys worldcomprehensive dispense superiority in the denim jean dispense. Levi Strauss & Co. binders it’s loveness as an American Icon and the cause of American jeans. Collection Background Successes Race Solutions Obligation Conclusion Q&A Successes - Positioning •Other dispenseing strategies, love the situation of the employment, created acceptiond contrariantiation, contributing to the companies dispense possibleity. •In 1930s, the assembly survived the Great Depression due to acceptiond acquisition in Western cultivation. –Jeans were situationed as nature exhausted by “cowboys. ” cowboys. ” •Levi’s jeans were issued to employees in the shelter toil (including veterans) during World War II. Post World War II, veterans that went to garden wore Levi’s jeans on Levi’ campuses, increasing generality. •WWII veterans were present as heroes. –Jeans were shown to be agreetelling for incidental consume, rather than employment. employment. –During the Baby Boom era, Levi’s targets younger consumers and Levi’ situations employment as “cool. ” timid. ” •Early movie stars wore Levi’s jeans. An specimen of notoriety endorsement Levi’ •Consumer ask-for shifts from durability of jeans to form of jeans. –Culturally, jeans became tone of adolescence and remonstrance In 1960s, novice protesters wore jeans as a unishape •In 1970s, assembly hawks bellbottom jeans • The unshaken situationed its employments behind a occasion changing durations and changing ask-fors, maintenance tangible customers and capturing new dispenses. Increases in sales notwithstanding acceptiond income Collection Background Successes Race Solutions Obligation Conclusion Q&A Race - Effect •Levi Strauss & Co. was threatened by race, owing screens of initiation were relatively low in the jean dispense. (yet the indisputable) •Some of Levi’s competitors include: –Calvin Klein –Gap Jeans –VF Corp (Lee, Wrangler) –Tommy Hilfiger The penetration of new competitors had liberal effects on Levi’s. –Levi’s no longer has engrossment possibleity past competitive charges Levi’ inferior income –Availability of substitutes unshaken faces acception in elasticity of ask-for –Consumers elect other disgraces. Levi’s customers buy from race Levi’ inferioring Levi’s dispense divide. Levi’ •These newer mushrooms are telling to “chip away” at Levi’s dispense superiority owing they are telling to seize segments. –VF Corp seizes low-end jean consumers; Calvin Klein seizes highlowhighend consumers.
Problem Background Successes Race Solutions Obligation Conclusion Q&A Race - Strategies •Competitors victorylargely were telling to seize from Levi’s dispense due to grievous advertising and disgraceing. Branding was especially serviceconducive for companies love Calvin Klein that targeted high-end consumers. •Some of the dispenseing strategies that competitors love Calvin Klein used to contrariantiate their employment and disgrace included: –Celebrity endorsements (Calvin Klein and Brooke Shields) –Up-to-date European employment designs (low-rise, tighter) Up- to(low–Advertise jeans as “designer. agent. ” •These advertisements were used as a screen to initiation, owing of unauthentic employment contrariantiation. Although Levi’s jeans may be physically the identical as its competitor’s, consumer electences are affected by disgrace spectry. •In attention to the subject of disgraceing, Levi’s comprehensivest consumer dispense were Baby Boomers, and by the duration competitors acceptiond in the 1980s, the Levi’s disgrace was perceived to be “mommy jeans. ” This repaird the past adolescenceful discernment of other disgraces. Collection Background Successes Race Solutions Obligation Conclusion Q&A Race Guerdon Jeans •Levi’s failed to acunderstanding and invade a new and booming guerdon jeans dispense, originating in 2000 and led by disgraces such as Seven For All Mankind, True Religion, and Rock & Republic. •Levi executives themselves admitted failing to see the guerdon jeans curve, and the assembly was harsh into immanent cost-cutting, insufficiency dozens of factories and laying off thousands of employmenters. •The guerdon jeans dispense has balance the last five years comprehensively driven the augmentation of an incorrectly sttelling jeans dispense, as guerdon jeans sales grew at a 40-45% rebuke for multiple years.
Levi’s insufficiency to adequately accord to this curve was a comprehensive part of its posting subsided sales in nine out of ten years precedent to 2007. Collection Background Successes Race Solutions Obligation Conclusion Q&A Solutions - Advertising •With the loosen of competitors and diminish in disgrace loveness, Levi Strauss & Co. fabricates use of edgy advertisements. •Brand Faithfulness –Many of Levi’s ads emphasis disgrace faithfulness to binder tangible customers. Levi’ The expression “original” is used liberal durations. original” –Some tv ads are set in the slow 1800s, emphasising the chronicled prize of the assembly. Disgrace Likeness –At the identical duration, Levi’s ads emphasis the “youthfulness” of their disgrace Levi’ adolescencefulness” jeans. –The 501 employment course and the Red Tab collections prproffer jeans that urge that to younger consumers competing behind a occasion the high-end jean competitors. high–Television advertisements are past innovative and target younger crowds. –http://www. youtube. com/watch? v=CSG807d3P-U http://www. youtube. com/watch? v=CSG807d3P–http://www. youtube. com/watch? v=skWFyop_pxU&feature=related –http://www. youtube. com/watch? v=W-SZN1VRIl4&feature=related http://www. youtube. com/watch? v=W- These dispenseing strategies eventually did not acceleration behind a occasion the worldcomprehensive diminish ask-for for jeans. This implies that other investment is neat a substituttelling good-natured-natured for jeans. Collection Background Successes Race Solutions Obligation Conclusion Q&A Solutions - Alternative •Although Levi Strauss & Co. had worldcomprehensive dispense superiority in the 1980s behind the free of 501 employment course, income hold to banner due to: (1) diminish of ask-for for jean employments and (2) past race. •In 1996, revenues were reported at $7. 6 billion and a U. S. dispense divide of 18. 7%. By 2001 revenues decsuccession to $4. 5 billion and U. S. dispense divide of 12. 1%. •In command to binder revenues, the assembly frees the Levi’s attestation jeans. –This employment course urges to the low-end consumers. –Decrease in ask-for for jeans causes dispense charge to decline, so consumers absence cheaper jeans. Collection Background Successes Race Solutions Obligation Conclusion Q&A Solutions - Alternative (cont. ) •In 2002 Levi Strauss & Co. fabricates an conformity behind a occasion comprehensivest retailer Wal-Mart as a supply-chain management to massdispense consumers. –Levi’s Attestation disgrace to be sold in Wal-Mart stores exclusively This was an distinguished strategic shift owing Wal-Mart was making comprehensive sales occasion Levi’s could not tend up in sales. This had possible to behoof twain parties. –By 2002, Wal-Mart was #1 in the Fortune 500 rating. –Levi Strauss & Co. was ranked #383 in 2002. •Although this house was a victory, Levi Strauss could not offset the slowdown in the subspecimen denim jean dispense, constant to privation income. –2008 Rating for Levi’s: 522 from preceding 510 –Profits hold to decline. Collection Background Successes Race Solutions Obligation Conclusion Q&A Solutions - Alternative (cont. ) Harsh to re-evaluate itself by years of subsided sales, Levi’s has been telling to trial some class of victory behind a occasion principally the insertion of the Attestation course and a comprehensivescale streamlining of costs and it’s occupation. Levi’s is so nature accelerationed by its interdiplomatic influence and is currently nature behoofed by impacts from the global vogue exshift dispense, as the assembly behoofed from the watery dollar. •The assembly is calm?} enigmatical to trial a way into the desirable guerdon jeans dispense, introducing a new guerdon course and hiring far-famed artists to liven up the disgrace. Competitor VF Corp. ecided to forfeiture Seven For All Mankind as their dispense initiation. Collection Background Successes Race Solutions Obligation Conclusion Q&A Obligation - Background •Levi Strauss & Co. is a nativity owned worldcomprehensive fortification behind a occasion headquarters in North America, Europe, and Asia. –The assembly is perpendicularly integrated, significance it owns/has owned factories for whole equalize of employmention for the jeans. –The assembly employs environing 10,000 herd worldwide. •Historically Levi Strauss & Co. is acknowledged as a caring and urbanely imperative assembly. –After the 1906 San Francisco earthquake, he assembly holdd to pay employmenters as it was rebuilding factories and buildings. –During the Great Depression, the assembly kept employmenters engaged installing new floors in factories rather than person them. Collection Background Successes Race Solutions Obligation Conclusion Q&A Obligation - Background (cont. ) •Levi Strauss & Co. has so seizen the direct on collective issues. –During the 1940s, the assembly desegregated its factories bringing colorless and black employmenters concurrently. –In 1980s, the assembly was very compromised in educating herd environing AIDS providing $37 favorite to HIV/AIDS services. One of the primitive companies to increase healthcare to their employmenters’ spouses. •Levi Strauss & Assembly entrance to occupation: “income through axioms. ” –"As occupation directers we tend the belief, twain individually and together, to fabricate our invadeploosen not solely a fountain for economic affluence, but so a soundness for absolute collective shift in the convoy of our occupation. This axiom of imperative wholesale victory is embedded in our past than 150-year trial, and holds to anchor how we operebuke today. " Collection Background Successes Race Solutions Obligation Conclusion Q&A
Responsibility - Sweatshops •With acceptiond race from other jean producers in the 1980s and 90s, love any acquisition-maximizing fortification, Levi Strauss & Assembly secretive liberal factories and subcontracted employmention. –Subcontracted employmention is cost-minimizing owing strive is relatively liberal and hire cheaper. –In command to contend behind a occasion charges, subcontracting employment fabricates sensation. Collection Background Successes Race Solutions Obligation Conclusion Q&A Obligation - Sweatshops (cont. ) •The assembly had 6 favourable factories in Saipan, principal of the U. S.
Commonaffluence of the Northern Mariana Islands. –The U. S. Department of Strive cited that employmenters were compensated sub-minimal hire, 7 day employment weeks behind a occasion 12-hour shifts in “slave-like” conditions. •The subcontractor, Tan Holdings Corporation, had to pay a pure of of $9 favorite as reparation to 1,200 employees. •Levi Strauss & Co. claimed no understanding of the wrong, clip cutties to Tan Holdings, and issued strive reforms. •1999, Sweatshop Watch, Global Exchange, Asian Law Caucus, Unite, and employmenters filed a class-action lawsuit 3 durations to 27 U. S. retailers, including Levi Strauss & Co.
Levi Strauss was the solely accused to win the plight. Collection Background Successes Race Solutions Obligation Conclusion Q&A Obligation - Environmental •Continuing on the entrance of “income by axioms,” in 2006 Levi Strauss & Co. launches the Eco investment course. –Jeans are informed to be made from 100% fundamental cotton and largely sustaintelling employmention processes. This includes cotton untreated by chemicals, pesticides, and fictitious at sustaintelling carbon emissions. –The jeans are so packed in 100% recycltelling and reustelling materials. •Economic implications Fundamental jeans are past dear, due to the pretended costs to testify these genes to fundamental standards. –However, fearful the use of chemicals for cotton is a plod inland the exact bearing. Pesticides tend externality costs to the environment and employmenters, owing they are chiefly awry used in inconsiderable countries. A contraction in externalities improves collective luck. –In the long-run, sustaintelling employmention has the possibility to nature useful. –Corporebuke obligation so has long-run income. Collection Background Successes Race Solutions Obligation Conclusion Q&A
Conclusion •Levi Strauss & Assembly had most of its future victory owing the unshaken was behaving monopolistically. The assembly indisputableed the established jeans, increasing durability, and forming generality. •Over the years, the assembly bindered income by providing a comprehensive collocate of employments, capturing new dispenses, and increasing its dispense divides. The assembly created screens to initiation by indisputables and trademarks, and by contrariantiating its employment from general jeans. •However as past unshakens invadeed the dispense, the assembly agoing losing customers and incurring privationes.
The mushroom companies seized niche dispense divides from Levi’s gross dispense influence. •Despite these contraction of sales, Levi Strauss & Co. bindered its corporebuke imperative loveness and alterable specimen on collective, strive, and environmental issues, which may tend long-run acquisition opportunities. Collection Background Successes Race Solutions Obligation Conclusion Q&A References Frith, Maxine. “The Ethical Revolution Sweeping Through the World’s Frith, World’ Sweatshops. ” commondreams. org. 16 April 2005. 2 May 2008 Sweatshops. ” commondreams. org. .