[levi’s at Wal-Mart] Case Analysis

Dunqing Yin

MGT 409- 002

[Levi’s at Wal-Mart] case analysis

1. Background/problem statement

        Levi’s faced huge decline in sales since 1996, from $7.1 billion to the 4.3 billion in the 2001 and owe 2 billion in debt. The new CEO Marienau have had to find the new way to stem the decline. The biggest jeans channel at 2001 in the United State is mass merchants, however Levi’s was 0% shared in the mass channel. The strategic issue in this case is whether Levi’s join in Wal-Mart that is the mass channel or not?

1. Strategic analysis& options

        SWOT analysis for Levi’s

Strength: Global Business, Number one apparel brand, Multiple product lines, Historical jean’s brand.

Weakness: market share decline, not competitive in the market, not price advantage and differentiate.

Opportunities: Mass merchants’ channel, low cost with outsourcing

Threats:5.8% market share decline in the apparel market, high value brand (Tommy, Hilfiger etc.,) low price brand (JCPenney private-label jeans etc)

1. Recommendations- Details

        I recommend Levi’s join into the mass merchant’s channel in order to take advantage in the apparel market. However, we need classify the different segment in each channel. We do not want to a lot of low-price Levi’s jeans distribute the original share in the high or mid-level price apparel market.

        First, joining to the mass channel, Levi’s have chance to take over dominant market share from the VF, moreover we can stem the sales decline. As the biggest market share in the US, we can use basic competitive strategies in this channel, make big market share with low profit for each pair.

        Second, stemming the sales decline also help the Levi’s to deal with the debt obstacle. Making the investor stand a chance in the finance and future, with the Number one apparel brand and worldwide market, we believe Levi’s can stand again to make the good profit for the investors.

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