Levi's Case Study

Brand Report: Levi's Strauss & Co.

Company Analysis

In 1853, a Bavarian immigrant named Levi Strauss opened a dry-goods business in San Francisco, California. Roughly twenty years later, the problem miners had with finding sturdy pants was brought to Levi's attention. This is what ultimately led Strauss to ease out of selling dry-goods and focus on designing the first pair of denim high-wasted overalls, later known as jeans. In 1873, Levi Strauss used his money from his already successful dry-goods business to fund, and patent, tailor Jacob Davis's idea of placing metal rivets at the points of strain on the pants; thus, Levi's brand was born. Such a simple innovative technique grew to cultivate what is one of the worlds best-known products, and the number one maker of brand-name clothing. The company's innovative heritage, values, highly recognized Levi's brand, and creative ad campaigns are the main factors that have kept Levi's jeans alive, and Levi Strauss & Co. a respected company.

The private company has been passed down through generations of Levi Strauss's descendants. Walter and Peter Haas (fourth generation Strauss family) took the company reins after WWII and managed to make Levi's jeans merely functional apparel for workers, but "the uniform of American youth". The men added women's attire, expanded overseas, and finally took the company public in 1971. After profits started to decline in the mid-1980s, Robert Haas took over, and took the company private in 1985. One consistent feature of this company is where the company headquarters, or "home", has been for the past one-hundred and fifty years: 1155 Battery Street in San Francisco, California. The company started there and has since then grown to be a worldwide corporation organized into multiple geographic divisions: Canada, Europe, Middle East, Africa, Argentina, Brazil, Mexico, and Asia Pacific. Due to significant drops in net sales over the past seven years or so, the company has closed many of their manufacturing facilities. This has caused the company to loose employees as well; with approximately 12,300 employees in 2003, the closures will affect some 2,000 workers. Over the years, Dockers and Slates brands have been introduced so as to keep up with competition and new trends. Nevertheless, Levi's remains the company's most valuable trademark. The overall organization of LS&CO is principally based on the same ideology and values that the business was founded under.

Levi's Strauss and Company's strong value-oriented philosophy is manifested through their marketing techniques, products, reputation, and relations within the corporation itself. LS&CO believes strongly in empathetic marketing, responding to a wide range of customers, and giving back to both merchant and philanthropist communities. The company's philosophy centers around four core values that form the foundation: empathy, walking in other people's shoes and paying attention to happenings in the world; originality, being authentic and innovative; integrity, doing the right thing; and courage, standing up for what they believe in. These four values define who the company is, sets them apart from competition, underlie the company's business strategies and behavior, and inspire visions for the future.

LS&CO manage their company the same as they do their individual brands. The Levi's brand is built from: learning from mistakes, commitment to excellence, dedication to goals and customer needs, and the ability and willingness to change. Because the brand is made to embody many of the core values consumers live by, this company has truly stands the test of time. Another comparative advantage of the company and brand lies in the "profits thru principles" policy that is so persuasively explained on the company's website, http://www.levistrauss.com. Besides the core values and established way of manufacturing and marketing clothes, LS&CO can always rely on their loyal consumers. Consumers are reminded of the values and heritage via the meaningful changes made constantly to the products. Levi's concentrates on doing this to ensure further commercial success and fewer weaknesses.

At times, weaknesses of the company hinder Levi's success. With other brands, although all target slightly different audiences, under the same company name, less money and devotion can be spent on Levi's brand specifically. This past fiscal year (2/29/2004), reported a "net loss of $2 million, compared with a net loss of $58 million for the same quarter last year". Levi's chief executive, Philip Marineau stated in an interview with The Wall Street Journal, "continued price pressures and weaknesses in [Levi's] core menswear contributed to sales decline". Falling sales have been a weakness, with sales peaking at $7.1 billion in 1996, and sales reaching only $962 million in 2003. The company often is weakened from the rising pressure to pay back the debt from years of falling sales. Levi's longevity help the company keep customers, attract new ones, and prove that the company and brand alike have more strengths than weaknesses. This brand will be around for as long as they stay true to their values and keep up with their consumers.

Market Analysis

Levi Strauss and Co. was established in 1853 and has since then became the largest apparel manufacturer (McDonough, 2003, p. 940). The stage of the product life cycle for this company is not a clear-cut answer. Even though, brand equity has been established and the company continues to remain in the public eye, familiarities with the brand and consumer's loyalty have not been enough to receive a gain on sales. There have been devastating losses over the past seven years which will effect major company decisions with employment, the product line and the promotional tactics implemented (Liedtke, 2004). Therefore, Levi's is in the position to recover some of their losses and regain strength in the marketplace.

Over 100 countries have Levi's as a registered trademark (Hoover's Company Information: Levi's, 2004). Their pants appeal to a wide range of people. The actual market is expanding with more companies adopting the "casual day" in the workplace (International Directory of Company Histories, ?????). With the announcement of the Levi's Signature Series, Target and Wal-Mart stores will now carry this line of products and thus increase the venues that sell this historical brand ("Levi's Strauss & Co.", 2004).

Miners were the initial target group for Levi's jeans because

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