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Levi Strauss & Co.

An analysis Presented by: Swati Gupta

Introduction Ø Levi Strauss & Co. (LS&CO.), one of the world's largest apparel manufacturer brand Ø Sold in over 110 countries, in more than 55,000 retail locations worldwide Ø Manufactures jeans in approximately 108 sizes and 20 finish fabrics Ø Ø 3 Brand Portfolio - Levi’s ®,

Mission statement “The mission of Levis Strauss & Co. is to sustain responsible commercial; success as a global marketing company of branded apparel.”

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Background Ø The company was founded by Levi Strauss in 1853 in San Francisco, California.

Ø Ø Since the patent of the rivets in jeans in 1873, the company achieved monopoly power

Ø Ø Monopoly power was gained through entry barriers and product differentiation

Ø Ø In 1890 the firm assigned its first lot numbers to its products, and the famous

Positioning Ø In 1930s, the company survived the Great Depression 

Ø Consumer demand shifts from durability of jeans to fashion of jeans Ø Ø Levi’s jeans were issued to employees in the defense industry during World War II

Expansion Ø Levi Strauss & Co. eventually captures most of the denim jean market, becomes the largest manufacturer of jeans, and profits reach $1 billion by 1974 

Ø Levi’s provides a wide range of products that target different market segments, capturing demands 

Ø Positioned as a well respected Fortune 500 enterprise 

Ø In 1986, the company launched Dockers' pants as a casual

Competition Ø Levi Strauss & Co . sales began to decline from $7.1 billion in 1996 to $5.1 billion in 1999

Ø Ø The company was threatened by competition, because barriers were relatively low in the jean market. (excluding the patent) 

Ø Some of Levi’s competitors include:  - High end consumers  

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Calvin Klein Tommy Hilfiger

- Low end consumers Miss sixty Guess

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Ø 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 High end specialty stores tops and bottoms that were based on key heritage styles with premium fabrics

Bottoms: Over $100

Variations of Levi’s Red Specialty stores Tab products with changes Independent shops to fabrics and finishes Original Levi’s stores

Bottoms: between $50 and $100

Levi’s Engineered Jeans

Group of tops and bottoms Specialty stores that were engineered for Independent shops special mobility Original Levi’s stores

Bottoms: between $50 and &80

Levi’s Red Tab Levi’s Silver Tab

The core of the Levi’s brand incl. the classic 501 button-fly jeanas well as a series of models featuring slim, baggy, straight leg fits

Departmental stores Chain stores Independent shops Original Levi’s stores

Bottoms: between $30 and $50

Incl. all other products as bags, belts, footwear etc.

Departmental stores Independent shops Original Levi’s stores

All price ranges depending on product category

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Levi’s Premium Red Tab 

Other Levi’s product

Bottoms: Between $25 and $50

Strategies Ø In 2002, Levi’s brand was rated as the No. 1 brand for brand awareness and brand retention 

Ø The company frequently promoted music & theatrical productions 

- Sponsored artists incl. Christina Aguilera, Mariah Carey, Ben Folds Five, The White Stripes etc.

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Ø Brand image

Strategies (contd.) Levi’s ads stress the “youthfulness "of their brand jeans  - Television advertisements are more innovative and 

target younger crowds 

Ø In order to maintain revenues, the company releases the Levi’s signature jeans.  

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– 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.) Ø Channels of distribution: 

Distribution Channel

Chain & Departmental stores Mass  Specialty  Independent Others  Total 

Share in sales

58.0% 0.0% 3.0% 10.0% 29.0% 100.0%

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Ø Absence of brand in the mast merchant channel in United states 

Agreement Ø In 2002 Levi Strauss & Co. made an agreement with largest retailer Wal-Mart as a supplychain strategy to mass market consumers 

Ø 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 • • Ø 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 

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Thank You!