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    Levi Strauss Case Study

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    Abdullah But
    Levi Strauss began as a small dry goods store in California in the mid-19th century that sold durable, functional work wear like denim pants. It developed iconic status through effectively marketing its jeans as a symbol of American culture, featuring the garments worn by cowboys, mechanics, and other archetypes. By the early 20th century, Levi's had expanded into children's clothing and more "artistic" marketing reflecting trends of the time. However, increased competition in recent decades from brands offering newer designs at lower prices has challenged Levi's market dominance and led it to shift production overseas and develop new product lines.

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    Levi Strauss Case Study

    Uploaded by

    Abdullah But
    222 views3 pages
    Levi Strauss began as a small dry goods store in California in the mid-19th century that sold durable, functional work wear like denim pants. It developed iconic status through effectively marketing its jeans as a symbol of American culture, featuring the garments worn by cowboys, mechanics, and other archetypes. By the early 20th century, Levi's had expanded into children's clothing and more "artistic" marketing reflecting trends of the time. However, increased competition in recent decades from brands offering newer designs at lower prices has challenged Levi's market dominance and led it to shift production overseas and develop new product lines.

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    Levi Strauss began as a small dry goods store in California in the mid-19th century that sold durable, functional work wear like denim pants. It developed iconic status through effectively marketing its jeans as a symbol of American culture, featuring the garments worn by cowboys, mechanics, and other archetypes. By the early 20th century, Levi's had expanded into children's clothing and more "artistic" marketing reflecting trends of the time. However, increased competition in recent decades from brands offering newer designs at lower prices has challenged Levi's market dominance and led it to shift production overseas and develop new product lines.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    222 views3 pages

    Levi Strauss Case Study

    Uploaded by

    Abdullah But
    Levi Strauss began as a small dry goods store in California in the mid-19th century that sold durable, functional work wear like denim pants. It developed iconic status through effectively marketing its jeans as a symbol of American culture, featuring the garments worn by cowboys, mechanics, and other archetypes. By the early 20th century, Levi's had expanded into children's clothing and more "artistic" marketing reflecting trends of the time. However, increased competition in recent decades from brands offering newer designs at lower prices has challenged Levi's market dominance and led it to shift production overseas and develop new product lines.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Levi Strauss

    Bruce Springsteen wore a pair of Levi’s jeans on the cover of his Born in the USA album,

    and James Dean and Madonna also did their part in marketing the brand. Levi’s success at

    infiltrating itself into US pop culture is such that it pops up in the memory of many baby

    boomers remembering their school years: The “cool” kids wore Levi’s.

    In the mid-nineteenth century denim was considered work wear, and Levi Strauss & Co.

    was a small dry goods store that sold functional items like clothing, linens, and bedding

    in California. Marketing of Levi’s denim products borrowed from the American Western

    landscape featuring cowboys, fishermen, and mechanics, among others, at work in everything
    from their catalogues to the garment’s tag. Durable, functional, and guaranteed were

    the pillars on which the firm built the reputation of its products.

    By the start of the twentieth century, the firm had expanded its product line to include

    children’s clothing. At the same time, the firm’s marketing became more “artistic,” taking

    on the cultural trends of the times and marking a significant shift in philosophy that would

    turn the brand into a US icon and make jeans a fashion statement.

    Being a US tradition, however, has not been enough to spare the firm from the challenges
    facing the industry around the world. Over the past two decades the firm has underperformed
    as a result of increased competition and changing consumer trends around the

    world. Protecting the brand name it so painstakingly built might never have been such a

    difficult task.

    Levi Strauss was one of the last firms to hold on to domestic manufacturing. After all,

    the value of the brand was closely tied to US manufacturing quality. As competitors flocked

    to Asia in the mid-1990s, the firm remained hopeful that its brand would survive the price

    competition. By 1999, the strategy shifted as Levi Strauss announced it would turn itself

    into a marketing firm and shed the manufacturing side of its supply chain. This, it argued,
    would allow the firm to have a more flexible price structure. By 2004, all US-based factories

    had been closed. 22

    Diesel, Guess, Buffalo, Silver, and Gap have also eroded the star power of Levi’s jeans.

    Diesel jeans, for example, are considered a step above in terms of quality and design.

    While some competing brands might not be as durable as Levi’s, they are less traditional

    in design, accommodating the ever-changing tastes of consumers who seasonally update

    their wardrobes.

    In England, Levi Strauss went as far as suing Tesco, a major supermarket, for selling

    Levi’s products at a discounted price. Levi Strauss argued that Tesco’s actions devalued the

    brand by selling jeans next to household products, groceries, and produce. Tesco had
    purchased Levi’s jeans in the gray market—from distributors whose products originated from

    Levi’s, because it refused to sell jeans directly to Tesco or other supermarkets. A European

    Union law prohibits branded products purchased abroad from being sold in the EU market
    without the consent of the brand owner. The ruling forbade Tesco from purchasing

    products outside the EU for sale in the UK, but allowed it to continue purchasing jeans in

    other EU countries. 23

    Winning the lawsuit did little to solve the erosion of its market by competitors, and the

    company continued to make losses. Realizing the potential of using these “discount” marketing
    channels, Levi Strauss introduced a cheaper version of its jeans to be sold directly

    to supermarkets, including Tesco. Levi’s “Signature” brand may solve the firm’s problem

    of attracting as wide a customer base as possible while retaining the value of its original

    line of jeans.

    Levi Strauss is one of the few companies that pulled out of China during the mid-1990s

    because it felt that the government was guilty of pervasive human rights violations. The

    company stopped manufacturing jeans in China after it found evidence of child labor,
    forced labor, and a military presence at factories that were producing clothing for the

    firm. The company did not own any of these factories on the mainland; it relied on local

    subcontractors to perform the manufacturing. However, company guidelines prohibited

    the suppliers from using child labor, forced labor, or excessive work hours. So when Levi

    Strauss learned of these violations, it concluded that its association with the contractors

    would damage its reputation, and it began a phased withdrawal from China.

    Now Levi Strauss is coming back into the marketplace and even has plans to start a

    direct-marketing operation on the mainland. The firm has promised to monitor its new

    Chinese factories carefully to ensure that they comply with human rights guidelines. At

    the same time, however, Levi Strauss is glad to be back because, like many other MNEs, the

    company believes that China is a marketplace of the future. 25 One senior executive in the

    company put it this way: “You’re nowhere in Asia without being in China.

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