Keller Graduate School of Management – Online MM522
Levi Strauss & Co. is a privately held clothing company founded in 1853. It is the global leader in denim jeans in more than 110 countries in which it markets its products. The company is also one of the world’s largest branded apparel companies in which it designs and markets jeans, casual wear, and related accessories for men, women, and children under the Levi’s®, Dockers® San Francisco, and Signature by Levi Strauss & Co. ™ brands. (LS & Co. 2009) The company has realized the need of women’s only jeans stores and sees the opportunity to capitalize when competitors are underperforming in this arena. The company’s mission statement is:
The mission of the Company is to sustain responsible commercial success as a global marketing company of branded casual apparel. We must balance goals of superior profitability and return on investment, leadership market position, and superior products and service. We will conduct our business ethically and demonstrate leadership in satisfying our responsibilities to our communities and to society. Our work environment will be safe and protective and characterized by fair treatment, teamwork, open communications, personal accountability and opportunities for growth and development
The company will open 5 outlet stores positioned in geographic areas that are populated with the desired target market. This will be the first of its kind for Levi Strauss, although many competitors have attempted to do this on a small scale. The company believes that by understanding a woman’s needs and capturing their loyalty, the LS brand would increase its market share in denim apparel. Consumers have been wearing jeans of all styles for over a hundred years and each year has warranted a new, trendier style, keeping the jeans at a reasonable price. The company sees an opportunity in the geographic areas of Dallas, TX, Memphis, TN, Little Rock, AR, Seattle, WA, and Chicago, IL. The target population for the new design is approximately 1,000,000 with an estimate of $16.3 million in profits per year in U.S. sales. With combined experience of over 115 years in manufacturing denim apparel, Wal-Mart, VF Company, and The Gap are the strongest competitors. Each has attempted to garner the market in women’s denim apparel and not succeeded. Since the beginning, Levi Strauss has focused on value-pricing. In addition, the company has adopted the idea of promotional-pricing. LS & Co. believes that with its long history of affordable prices for its brands, the consumer’s assessment of the value of the company’s product will match the price that is charged. The company has taken into account the current economic situation and has found a way to penetrate this certain market without causing the consumer any additional economic hardship. The pricing strategies LS & Co. uses will unquestionably acquire and maintain sales. With five (5) denim outlets, Levi Strauss has taken the approach of selective distribution. The company believes that it has chosen the most appropriate geographical areas for which their concentration will be focused. The company will be able to get the goods to the stores at the right time without incurring high costs with the acquisition of three warehouses that are located within 300 miles of each outlet. In addition, kiosks will be strategically placed at other retail stores that will carry the LS brand. LS & Co. has invested in upgrading their current website that enables consumers to place orders online 24 hours a day. Since promoting this new venture, LS & Co. is 26% within the proposed budget. This has demonstrated a much focused plan for the company.
Product Description and Situational Analysis
Levi Strauss will open many stores, called Levi Strauss MJ’s, and design and market several styles of denim jeans that will...