Part II Levis Personal Pair Teaching Note This case describes Levis attempt at mass customization.

Caught in the middle betweenlowprice competitors and premium priced designer jeans, Levis considers a proposal for customized jeans that they hope will help them regain a differentiation edge. This is ashort case and can be used as a short (30 minutes) discussion in tandem with a lecture, or, because students will usually be very familiar with the industry and it presents somequantitative tasks, the case can also work in an 80 minute block. Objectives 1.Students gain experience in analyzing a companys differentiation advantage.2.Students will assess the potential threats to differentiation, particularly those thatcome from low-price competitors and those from more differentiated competitors.3.Students gain experience in quantifying the costs and benefits of differentiation. Study Questions 1.Assess Levis situation at the time of the case. What is at the root of their problems in the denim market?2.How does Levi Strauss create value for its customers?3.Assess the Personal Pair Proposal. What is your evaluation of it from aquantitative perspective? What is your evaluation of it using the VRIOframework?4.What is your recommendation concerning the Personal Pa ir proposal?How does Levi Strauss create value for its customers?There are multiple answers to this question. Certainly, people buy Levis for differentand multiple reasons. Some of these include: Function Fit Style / Image / FashionIt may help to motivate the discussion to ask students why they buy jeans. I will usuallysingle out four students (two men and two women) and ask them why they bought their last pair of jeans or why they chose one brand over another. Generally, the conclusionwe reach is that there is substantial diversity among jean buyers, but that style and fit arevery important criteria to some.What is Levis situation in denims at the time of the case?Levis is facing dual pressures. On the one hand, they are facing more aggressive pricecompetition, or as the case notes fierce competition for market share and narrowingmargins. For the most part, those competitors challenging on price very likely havelower costs given their reliance on off-shore production. The second challenge Levis