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.”

 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
 Calvin Klein
 Tommy Hilfiger
 - Low end consumers
 Miss sixty
 Guess


Ø In 2002, the Levi’s brand comprised several product

lines for men & women-
Product line Description Distribution Retail price
channel
Levi’s Vintage Clothing Small group of premium High end specialty stores Bottoms: Over $100
and the Levi’s Red tops and bottoms that were
based on key heritage
styles with premium fabrics


Levi’s Premium Red Tab Variations of Levi’s Red Specialty stores Bottoms: between $50 and
Tab products with changes Independent shops $100
to fabrics and finishes Original Levi’s stores


Levi’s Engineered Jeans Group of tops and bottoms Specialty stores Bottoms: between $50 and
that were engineered for Independent shops &80
special mobility Original Levi’s stores

Levi’s Red Tab The core of the Levi’s
Levi’s Silver Tab brand incl. the classic 501
button-fly jeanas well as a
series of models featuring
slim, baggy, straight leg
fits
Departmental stores Bottoms: between $30 and
Chain stores $50
Independent shops
Original Levi’s stores Bottoms:
Between $25 and $50

Other Levi’s product Incl. all other products as Departmental stores All price ranges depending
bags, belts, footwear etc. Independent shops on product category
Original Levi’s stores
 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.


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.
 – 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 Share in sales
 Chain & Departmental stores 58.0%

Mass 0.0%
Specialty 3.0%
 Independent 10.0%
Others 29.0%

Total 100.0%


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 supply-
chain 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


•
Thank You!