Levi Strauss & Co. An analysis Presented by: Swati Gupta
Levi Strauss & Co.
An analysis
Presented by:Swati Gupta
Introduction
Levi Strauss & Co. (LS&CO.), one of the world's largest apparel manufacturer brand
Sold in over 110 countries, in more than 55,000 retail locations worldwide
Manufactures jeans in approximately 108 sizes and 20 finish fabrics
3 Brand Portfolio - Levi’s ®, Dockers ® & Levi’s Strauss Signature®
Mission statement
“The mission of Levis Strauss & Co. is to sustain responsible commercial; success as a global marketing company of branded apparel.”
Background The company was founded by Levi Strauss in
1853 in San Francisco, California.
Since the patent of the rivets in jeans in 1873, the company achieved monopoly power
Monopoly power was gained through entry barriers and product differentiation
In 1890 the firm assigned its first lot numbers to its products, and the famous number "501" was assigned to the riveted pants
Positioning In 1930s, the company survived
the Great Depression
Consumer demand shifts from durability of jeans to fashion of jeans
Levi’s jeans were issued to employees in the defense industry during World War II
Expansion
Levi Strauss & Co. eventually captures most of the denim jean market, becomes the largest manufacturer of jeans, and profits reach $1 billion by 1974
Levi’s provides a wide range of products that target different market segments, capturing demands
Positioned as a well respected Fortune 500 enterprise
In 1986, the company launched Dockers' pants as a casual alternative to dress pants and jeans
Competition Levi Strauss & Co . sales began to decline from $7.1 billion in 1996 to $5.1
billion in 1999
The company was threatened by competition, because barriers were relatively low in the jean market. (excluding the patent)
Some of Levi’s competitors include: - High end consumers Calvin Klein Tommy Hilfiger - Low end consumers Miss sixty Guess
In 2002, the Levi’s brand comprised several product lines for men & women-
Product line Description Distribution channel
Retail price
Levi’s Vintage Clothing and the Levi’s Red
Small group of premium tops and bottoms that were based on key heritage styles with premium fabrics
High end specialty stores
Bottoms: Over $100
Levi’s Premium Red Tab Variations of Levi’s Red Tab products with changes to fabrics and finishes
Specialty storesIndependent shopsOriginal Levi’s stores
Bottoms: between $50 and $100
Levi’s Engineered Jeans Group of tops and bottoms that were engineered for special mobility
Specialty storesIndependent shopsOriginal Levi’s stores
Bottoms: between $50 and &80
Levi’s Red TabLevi’s Silver Tab
The core of the Levi’s brand incl. the classic 501 button-fly jean as well as a series of models featuring slim, baggy, straight leg fits
Departmental storesChain storesIndependent shopsOriginal Levi’s stores
Bottoms: between $30 and $50
Bottoms:Between $25 and $50
Other Levi’s product Incl. all other products as bags, belts, footwear etc.
Departmental storesIndependent shopsOriginal Levi’s stores
All price ranges depending on product category
Strategies
In 2002, Levi’s brand was rated as the No. 1 brand for brand awareness and brand retention
The company frequently promoted music & theatrical productions
- Sponsored artists incl. Christina Aguilera, Mariah Carey, Ben Folds Five, The White Stripes etc.
Brand image
Strategies (contd.)
Levi’s ads stress the “youthfulness "of their brand jeans - Television advertisements are more innovative and target younger
crowds
In order to maintain revenues, the company releases the Levi’s signature jeans.
– This product line appeals to the low-end consumers. – Decrease in demand for jeans causes market price to drop, so
consumers want cheaper jeans.
Strategies (contd.) Channels of distribution:
Absence of brand in the mast merchant channel in United states
Distribution Channel Share in sales
Chain & Departmental stores 58.0%
Mass 0.0%
Specialty 3.0%
Independent 10.0%
Others 29.0%
Total 100.0%
Agreement
In 2002 Levi Strauss & Co. made an agreement with largest retailer Wal-Mart as a supply-chain strategy to mass market consumers
This was an excellent strategic move because Wal-Mart was making large sales while Levi’s could not keep up in sales.
– By 2002, Wal-Mart was #1 in the Fortune 500 rating
– Levi Strauss & Co. was ranked #383 in 2002.
Conclusion
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
However as more firms entered the market, the company started losing customers and incurring losses but due to its unique branding strategies, it forever earned a place in history
Thank You!