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Posted: June 15th, 2022
Levis Strauss and Company is one of the world largest brand-name apparel marketers. Levis Strauss and Company is one of the successful Jeanswear shop in America States. The innovation of the rivets in the jeans differentiated Levis jeans from others because of its increased durability. (Levi’s) The Fast changes in consumer tastes, competition from both lower and higher-end brands, the fast development in the modern distribution and sales technology has brought about a continuing loss of market share. (Levi Strauss & Co. Marketing Plan)
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Levi’s Strauss and company was established in 1873, Levi’s jeans are the original, authentic jeans. They are the most successful, widely recognized and often imitated clothing products clothing product in the history of apparel. Over successive generations, Levi’s jeans have captured the attention, imagination and loyalty of diverse individuals. (Levi’s) As the inventor of the category, the Levi’s brand continues to define jean wear with the widest range of products available, from quintessential class such as the famous Levi’s 501 Original jean, to favorite fits and styles in the Red Tab and premium collections. (Levi’s)
To sustain responsible commercial success as a global marketing company of branded apparel. They must Balance goals of superior profitability and return in investment, leadership market positions and superior product and services. They will conduct their business ethically and demonstrate leadership in satisfying their responsibilities to their communication and to society. (Levi Strauss & Co. Marketing Plan)
Levi’s Strauss brands are filled with examples of the key role their value have played in meeting consumer needs. Four core values are at the heart of Levi Strauss & Co Empathy, Originality, Integrity and Courage. These four values are linked. As Levi’s look at their history, a story of how Levi’s core values work together and are the source of their success. Likewise, Levi’s brands embody many of the core values that consumers live by. This is why Levi’s brands have stood the test of time.
The objectives of Levi’s brand continues to define Jeanswear with the widest range of product available, from quintessential classics, such as the famous Levis Original jean, to favourite fits and styles in Red Tab and premium collections. Levi’s jeans have captured the attention, imagination, and loyalty of generations of diverse individuals. The brand has continues received critical acclaim from industry insiders. The brand’s profile is growing internationally. Levi’s Strauss and company next target focus to expand more in different city flagship store.
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To review Levi’s Jeanswear market situation of the global highlighting the competitive positions and branding strategies of the market.
To identify the successful branding strategies Levi’s Jeanswear has employed to achieve its dominant market position.
To evaluate on the effectiveness of Levi’s Jeanswear branding strategies in sustaining its sales performance.
Situation analysis is a marketing term, and involves evaluating the situation and trends in particular company’s market. Situation analysis is often called the three C, which refers to the three major elements that are Company, Customers, and Competition.
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Despite these reductions Levi Strauss & Company had most of its early success because the firm was behaving monopolistically. The company patented the riveted jeans, increasing durability, and gaining popularity.
Levi’s Strauss & Co. maintained its corporate responsible image and progressive stance on social, labor, and environmental issues, which may have long run profit opportunities.
There is many Levi’s Jeanswear loyalty to maintain existing customers.
Levi’s Jeanswear is the youthfulness of their brand jeans.
The 501 product line and the Red Tab collection offer jeans that appeal to younger consumers competing with the high-end jean competitors.
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Competitors successfully were able to take from Levi’s market due to heavy advertising and branding. Branding was especially effective for companies like Calvin Klein that targeted high-end consumers.
Levi’s jeans may be physically the same as its competitor physically competitor’s, consumer preferences are affected by brand name.
Levi’s Strauss, Levi’s Strauss & Co. is one of the world’s largest brand-name apparel marketers with sales in more than 110 countries. There is no other company with a comparable global presence in the jeans and casual pants markets. Nowadays Levi Strauss develops technological higher production and coordination activities. In addition, Levi Strauss also develop new website is convenient for consumers shopping and also develop new products and services.
The constant of threats is possible recession and people less likely to spend money on trend items and economic downturns in some countries. Bad economic is also an issue for Levi’s Strauss such as recession and the weakness of currency, people are likely to spend lesson trend items. Other than that, increasing competition from product of the higher end of the market and price wars with competitor.
Support activities
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Primary activities
Inbound logistics: Inbound Logistics is the transportation planning in one of the major business processes. In order to achieve operational excellence, increase the merger, Levi’s Strauss plans common needs and external traffic inbound logistics, receiving their suppliers purchase. They stored goods production or assembly line needs. Goods may move around the organization.
Operations: At this stage of product assembly or manufacturing. Self is co-produced fashion industry packaging. The design of the packaging represents the image of Levi’s Strauss.
Outbound logistics: Collect, store and distribute the product to send along the supply chain to retailers in different countries. The retailers will send goods to outlets.
Marketing and sales: The marketing communication strategies are the best ways to deliver message to consumers that Levi’s Strauss applied were advertising through the magazines, bill board and fashion show. Prepared to provide targeted, in order to meet consumer demand.
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Service: To fulfill consumers desirable, that are some things should have to concern on these; consumer always has clothes fitness problems, thus after sales service is important to exchange the size of Jeanswear or modify it. Other than that, to provide stuffs training how to service difference behavior of consumers and updating their Jeanswear information.
Procurement: Levi’s Strauss needs of all the goods, services and materials procurement. This is because for the lowest possible price to buy the highest quality possible. This includes outsourcing that is usually done in-house business for the same from other companies and use of IT and networking technology to achieve procurement goals.
Technology development: The innovation of technologies helps the Levi’s Strauss to sustain competitive advantage. Technology is an important of the competitive advantage.
Human resources management: Levi’s Strauss is guided by a strong growth strategy in managing and developing its human resource capacity. Potential employees are evaluated in terms of their alignment to the company’s winning characteristics which are directly linked to the Levi’s business strategies, mission and vision of integrity, courage, empathy and originality.
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Firm infrastructure: The formal systems of planning finance quality control, information management and the structures and routines that are part of an organization’s culture.
The remote environment comprises factors that originate beyond and usually irrespective of, any single firms operating section: political, economic, social and technological factors. That environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence.
Political factor: Political factor is very important to make sure the growth of the clothing industry in America States. With the peaceful environment, America States became one of the worlds attractive fashion destinations. (Easy club)
Economic Factor: One of the main beneficiaries of the recession is the value clothing sector as consumers spend most on discretionary items with increased caution. According to Verdict forecasts, America States clothing spends in 2009 had declined 0.6%. However, estimation that value clothing sales will grow by 5.0%. Grocers are expected to make further gains in 2009 and increase their share of the value clothing market to 34.2%. In long term, the gains that grocers to be made will prove a further threat to value clothing specialists by improving store environments and fully exploiting multichannel capabilities.
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Social factor: Americans become more enjoy fashion nowadays; they will conservative and old-fashioned image of traditional shops. They prefer on those shops with a trendier image, such as Levi’s older and often affluent consumers remain fashion conscious.
Technological factor: Levi’s have combined the four core technology are at the heart of Levi’s Strauss & Co Empathy, Originality, Integrity and Courage, durable and easy to care for. However, further technology on textile with other characteristics will produce, such as cellulite-reducing hosiery or moisturizing properties. Prices are likely to increase as the result of these changes in the textile technology, therefore assisting in growing the value of the market.
Industry Competitive: Jeanswear industry is characterized by small fashion 501, but there has been a recent trend towards consolidation and economies of scale. Businesses compete on price, quality, differentiation and relationship with key suppliers. However, there are not many players that establish a reputation for bringing style and innovation to the high street. Due to this Levi’s has the advantage of being a high streets retail phenomenon.
Bargaining power of suppliers: Suppliers do not have much bargaining the fashion industry because their products and their commercial nature of the sales forces of developed markets. Can affect the garment industry from the original input price fluctuations, but the change is a global determinants of supply and demand, rather than the bargaining power of suppliers caused.
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Bargaining power of customers: The buyer’s power is significant in that buyers can force prices down, demand higher quality products or services, and, in essence, play competitors against one another, all resulting in potential loss of industry profits. Buyers exercise more power when they are large-volume buyers, the product is a significant aspect of the buyer’s costs or purchases, the products are standard within Jeanswear industry, there are few changing or switching costs, the buyers earn low profits, potential for backward integration of the buyer group exists, the Jeanswear is not essential to the buyer’s product, and the buyer has full disclosure about supply, demand, prices, and costs. (Reference for business)
Threat of new entrants: New entrants can also expect a barrier in the form of government policy through federal and state regulations and licensing. New firms can expect retaliation from existing companies and also face changing barriers related to technology, strategic planning within the industry, and manpower and expertise problems.
Threat of Substituted: The substitute product in fashion industry is low. Every individual needs to wear clothes in their daily activities to prevent cold and harmful to their skin. There is no substitute other than wear clothes. The only alternative is individual can make clothes their own but this alternative rarely happen.
Existing Product New Product
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Existing Market
New Market
In Ansoff Matrix, Levi’s Strauss is currently in position of market penetration as Levi’s Strauss intends to sell its existing markets to maintain or increase the market share of current product. This can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling. Other than that, increase usage by existing customer by introducing loyalty schemes; the business is focusing on markets and product it knows well. It is likely to have good information on competitors and on customer needs.
On the other hand, Levi’s Strauss also in different position of market development intends to sell its existing product into new markets in different countries. In this stage, Levi’s Strauss is facing medium-high risk in entering new market as there in many popular clothes retailer in the market. The issues of new geographical, product packaging, distribution channels and different pricing policies to attract different customer or create a new market segments that is Levi Strauss planning to enter must also take into consideration. Therefore, Levi’s Strauss takes risk segmentation into different countries.
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Cost Differentiation
Broad
Narrow
Levi Strauss is paining to employ differentiation strategy to make Levi’s Jeanswear to be more common, Levi’s Strauss provides Levi’s 501 Original Jeanswear for men, women, teens, and children. Since launching the campaign, worldwide sales of 501 jeans have increased substantially. Although it is encouraging to see the flagship 501 line growing again, these sales increases were not incremental. So everyone is a potential customer for Levi’s. Levi’s generally appeals to more mature generations not necessarily looking to make a fashion statement. Levi’s makes an effort to appeal to all customers in one way or another, which been a key to their success over the years.
The suitability of the strategic options is assessed based on their compatibility with the current competitive environment of the fashion industry, Levi’s own corporate vision and mission and how it would sustain or improve the competitive position of the organisation.
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Concept
To understand
Strategy must address
PEST
Key environmental Driver/ Changes in industry Structure
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The remote environment comprises factors that originate beyond and usually irrespective of, any single firms operating section: political, economic, social and technological factors. That environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence.
Porter’s Five-Forces
Industry attractiveness competitive forces
Porter’s essential message is that where these five forces are high, then industries are not attractive to compete in. There will be too much competition and too much pressure to allow reasonable profits.
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Value Chain
Opportunities for vertical integration or outsourcing
A value chain describes the categories of activities within and around an organisation, how Levi’s create a product or services
Levi’s Strauss chosen because it demonstrates how a successful company experienced great difficulties in the early 1853, but then developed a strategy that resulted in an excellent market position in the late 2003. The TOWS Matrix shown will focus on the crucial period from late 1853 to early 2003. The external threats and opportunities pertain mostly to the situation Levi’s Strauss faced in the United States.
Strengths (S)
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Brand name.
Access to target market with over 300 stores nationwide.
Finance and access to international capital.
Distribution channels and global sourcing.
Weakness (W)
High costs of brand protection.
Lack of control over quality.
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Lack of control over distribution.
Distribution conflicts.
Opportunities (O)
Largest brand-name apparel marketers with sales in more than 110 countries.
Technological development higher production and coordination activities.
Develop new product and services.
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A new market on website shipping.
SO-Strategies
Increase sales and supply to different countries. (S1,O1)
Build technological development higher production and new production and services in different 300 stores nationwide.(S2, O2, O3)
Create channels and website shipping to global sourcing.
WO-Strategies
High costs of production brand in markets. (W1, O1)
Lack of control in technological development production and distribution. (W2, W3, O2)
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Improve distributor services and website shipping benefits. (W4, O3, O4)
Threats (T)
Possible recession and people less likely to spend money on trend items.
Competition from product of the higher end of the market.
Economic downturns in some countries
Price wars with competitors
Increasing competition.
ST
Meet competitors advanced design of the market. (S1, S2, T2)
Economic and finance are the keys of the issue. (S3, T1, T3)
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Globalization increasing competitor and price wars with competitors. (S4, T4, T5)
WT
Reduce threat of competition by developing flexible product line. (W1, W2, W3, T1, T2)
To summarises these point from earlier section and provides examples of reasons why strategy directions or might be regarded as suitable.
Strategic
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Environment
Capability
Expectations
Market penetration
Levi Strauss intends to sell its existing markets to maintain or increase the market share of current product.
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Increase usage by existing customer by introducing loyalty schemes; the business is focusing on markets and product it knows well.
It is likely to have good information on competitors and on customer needs.
Market development
Levi Strauss is facing medium-high risk in entering new market as there in many popular clothes retailer in the market.
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The issues of new geographical, product packaging, distribution channels and different pricing policies to attract different customer or create a new market segments that is Levi Strauss planning to enter must also take into consideration
Levi Strauss intends to sell its existing product into new markets in different countries and takes risk segmentation into different countries.
Differentiation
Differentiation strategy to make Levis jean to be more common.
Levi Strauss provides Levi’s 501 Original Jeanswear for men, women, teens, and children. So everyone is a potential customer for Levi’s.
Levi’s generally appeals to more mature generations not necessarily looking to make a fashion statement. Levi’s makes an effort to appeal to all customers in one way or another, which been a key to their success over the years.
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Options are assessed against key factors relating to the strategic position of the organisation and a score or ranking established for each option.
Key strategic factors
Strategic option
Family ownership
Increased globalisation
Low-price imports
Increased of marketing
Good of quality control
Increased sales
Ranking
Market penetration
Market development
Differentiation
O=favourable; X=unfavourable;? =uncertain or irrelevant.
A=most suitable; B=possible; C=unsuitable.
The acceptability of the strategic options is assessed based on the stakeholders’ expectations.
The stakeholders of Levi’s Strauss are comprised of shareholders, management, employees, suppliers, contributors and the customers.
The shareholders are likely to accept all the strategies as they have already witnessed Levi’s Strauss successful turnaround and regain of profitability.
The management built up more positive steps in achieving its vision and mission these initiatives illustrate the progress Levi’s Strauss have made in building strong, collaborative relationships with their wholesale customers. To working closely with these customers and developing plans to ensure Levi’s brands continue to be broadly accessible to consumers despite continued retail door closures and bankruptcies in the United States.
On the other hand, the employees may be very supportive of the differentiation strategy and market development business simplifying measures recommended.
The suppliers and contributors would have learnt by now to live with Levi’s Strauss differentiation strategy and market development their operations to fit themselves into Jeanswear operating style.
Levi’s customers are likely to welcome the Jeanswear innovation capabilities with the creation of a Global Market Development Centre at their owned-and-operated manufacturing plant in different courtiers.
Key stakeholders
Rewards
Risks
Shareholders
Higher profit, performance, clear direction.
Unpredictable economics crisis.
Managers
Performance, targets, growth, bonus.
Cultural problems.
Employees
Rates of pay, high employment rate.
Job security, time period.
Trade unions
Working conditions, wages rate.
Legal requirements.
Customers
More Levi’s Jeanswear available.
Ethical products.
Suppliers
High demand of resources.
Delivery problems.
Government
Taxation.
Explicit Federal laws in certain countries.
General public
Jobs, involvement, shares
Environmental issues
Key stakeholders
Rewards
Risks
Shareholders
Higher profit, performance, clear direction.
Loss.
Managers
Performance, targets, growth, bonus.
Time consume, sales volume.
Employees
Rates of pay.
Job security.
Trade unions
Working conditions, minimum wages.
Legal requirements.
Customers
More choices, better quality and customer care.
Ethical products.
Suppliers
High demand of resources.
Government
Taxation.
Legislation.
General public
Jobs, involvement, shares.
Environmental issues.
The feasibility of the three strategic options is assessed based on the Levi’s Strauss current resources.
The actual resources required for the implementation of the three strategies are summarized in Table 4 under four categories: (1) product/service feasibility, (2) market feasibility, (3) organizational feasibility and (4) financial feasibility.
Key resources
Analysis
Product/ Service feasibility
Levi Strauss market development intends to sell its existing product into new markets in different countries. Levi Strauss must control their product and service quality, the patent strategy to maintain its brand reputation.
Market feasibility
The issues of new geographical, product packaging, distribution channels and different pricing policies to attract different customer or create a new market segments that is Levi Strauss planning to enter must also take into consideration.
Organizational feasibility
The brand and formula have to carefully designed and properly execute. Levi’s Strauss able to expand rapidly takes risk segmentation into different countries.
Financial feasibility
According to the Levi’s Strauss annual report 2009 that company sales and profit has increased, so there are no financial problems to support market develop strategy.
Key resources
Analysis
Product/ Service feasibility
Levi Strauss provides Levi’s 501 Original Jeanswear for men, women, teens, and children. Since launching the campaign, worldwide sales of 501 jeans have increased substantially.
market feasibility
The flagship 501 line growing again, these sales increases were not incremental. So everyone is a potential customer for Levi’s. Levi’s generally appeals to more mature generations not necessarily looking to make a fashion statement.
Organizational feasibility
Levi’s generally appeals to more mature generations not necessarily looking to make a fashion statement. Levi’s makes an effort to appeal to all customers in one way or another, which been a key to their success over the years.
Financial feasibility
According to the Levi’s Strauss annual report 2009, the sales and profit of the company has increased, so there is no financial problem to support franchising strategy. However, the in-store advisor service is free of charge; Levi’s Strauss has to cover this expense from other sectors.
The above evaluation data have indicated that in fact all the two strategic options are equally important and necessary for the future growth of Levi’s Strauss and should be implemented to the long term benefits of Levi’s Strauss. The complexity and risks in implementation of the two options are summarized in below.
Strategic Option
Implementation Requirements
Complexity & Risk
(1)
Market development
Involves higher capital injection & management ingenuity to implement in view of other competitors
Hardest with higher risks
(2)
Differentiation
Involves strong management will and resolve to implement. Changing staff’s working attitudes and instituting a new Levi’s 501 Original Jeanswear for men, women, teens, and children. Launching the campaign, worldwide sales of 501 jeans have increased substantially would need a lot of patience and tact.
Medium hard, needs management will and tact
Naturally, among the two strategic options, the strategic option 2 should be selected as the first choice since it can be implemented quickly and getting faster results.
From the evaluation above, Levi’s Strauss select differentiation strategy to achieve their vision and mission. Differentiation strategy helps Levi’s Strauss to expand further more different gender and different ages to wear Levi’s Jeanswear and establish the brand as a fashion authority in every city. The implementation strategy can describe in three sections, which is resources management, organizational structure and management of change.
Key issues
Analysis
Resources management
Resource management refers to the possibility under discussion is a factor. Levi Strauss has confirmed that the factor is the most likely way to work. Levi Strauss can use the budget or other performance management tools to study the effectiveness of differentiation strategy.
Organizational structure
In this stage Levi’s Strauss has to deal with issues regarding levels of hierarchy, together with structural form and style of management.
Management of change
Some management of Levi’s Strauss might not aware of the need for changes in strategy implementations. Thus Levi’s Strauss must review the speed, scope and style of the changes, in order to obtain full commitment to them.
The company maintained profits by providing a wide range of products, capturing new markets and increasing its market shares. The company created barriers to entry by patents and trademarks, and by differentiating its product from generic jeans. However as more firms entered the market, the company started losing customers and incurring losses. The upstart companies captured niche market shares from Levi Levi’s s immense market domination. Despite this reduction of sales, Levi Strauss & Co. maintained its corporate responsible image and progressive stance on social, labor, and environmental issues, which may have long long-run profit opportunities.
This report had analyzed the situation and the growth strategy of Jeanswear line of Levi’s Strauss. The evaluation of the suitability, acceptability and feasibility had examined on chosen options. The options are products and services development and differentiation strategy. The strategy chosen is differentiation strategy to achieve the mission and vision. The launch of differentiation strategy helps Levi’s Strauss to expand their business effectively and efficiently.
By respond quickly to emerging trends, Levi’s Strauss has become a successful fashion retailer within the shortest possible lead times to carve out a reputation for its ability.
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