Levi's Case Study Of Levis

2386 Words 10 Pages
Register to read the introduction… •Levi executives themselves admitted failing to see the premium jeans trend, and the company was forced into radical cost-cutting, closing dozens of factories and laying off thousands of workers. •The premium jeans market has over the last five years largely driven the growth of an otherwise stable jeans market, as premium jeans sales grew at a 40-45% rate for multiple years. Levi’s failure to adequately respond to this trend was a large part of its posting declining sales in nine out of ten years prior to …show more content…
Levi’s is also being helped by its international presence and is currently being benefited by impacts from the global currency exchange market, as the company benefited from the weak dollar. •The company is still trying to find a way into the lucrative premium jeans market, introducing a new premium line and hiring famous artists to liven up the brand. Competitor VF Corp. decided to purchase Seven For All Mankind as their market entry.

Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

- Background
•Levi Strauss & Co. is a family owned worldwide corporation with headquarters in North America, Europe, and Asia.
–The company is vertically integrated, meaning it owns/has owned factories for every level of production for the jeans. –The company employs about 10,000 people worldwide.

•Historically Levi Strauss & Co. is recognized as a caring and corporately responsible company.
–After the 1906 San Francisco earthquake, the company continued to pay workers as it was rebuilding factories and buildings. –During the Great Depression, the company kept workers busy installing new floors in factories rather than fire
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–However, discouraging the use of chemicals for cotton is a step toward the right direction. Pesticides have externality costs to the environment and workers, because they are mostly improperly used in poor countries. A reduction in externalities improves social welfare. –In the long-run, sustainable production has the possibility to being profitable. –Corporate responsibility also has long-run profits.

Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

•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. •Over the years, 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’s immense market domination. •Despite these reduction of sales, Levi Strauss & Co. maintained its corporate responsible image and progressive stance on social, labor, and environmental issues, which may have long-run profit

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