Levis Strauss & Co. an Analysis

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  • Topic: Levi Strauss & Co., Jeans, Levi Strauss
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Levi Strauss & Co.
An Analysis

EEP 142 Group Project Young Lee James Moon Michael Lin

Problem
•The Levi Strauss company is experiencing losses and is continuing to under-perform in the denim jean market. •The firm faces the general problem of a dominant firm losing market share when more firms enter the market.

Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

Background
- History
•The company was founded by Levi Strauss in 1853 primarily selling wholesale dry goods. The company was founded in San Francisco, California. •A tailor named Jacob Davis thought of an idea to use copper rivets to reinforce the points of strain on pants. •Davis and Strauss purchased the patent of the idea of using copper rivets in clothing on May 20, 1873.

Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

Background
- Company Growth
•The innovation of the rivets in the jeans differentiated Levi’s jeans from others because of its increased durability. •Over the years, Levi’s jeans have become more popular, initially due to its durability. Jean products expanded, targeting different consumers. •Levi Strauss & Co. eventually captures most of the denim jean market, becomes the largest manufacturer of jeans, and profits reach $1 billion by 1974.

Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

Background
- Time Line
•1853: Levi Strauss begins selling dry goods in San Francisco. •1873: Levi Strauss & Co. patent riveted jeans and begin selling them. •1912: Koveralls, denim playsuit for children, is first nationally sold product for the company. •1935: Company sells first blue jeans for women. •1940s: U.S. government issues denim work clothes for employees in the defense industry. •1974: Company sales reach $1 billion •1986: Company introduces Dockers as a new casual line of clothes Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

Successes
- Monopoly
•Since the patent of the rivets in jeans in 1873, the company achieved monopoly power. •Monopoly power was gained through entry barriers. –The patent granted the firm monopoly rights to sell riveted jeans.

•Also by product differentiation
–The rivets on the jeans allowed for longer durability, a form of vertical differentiation.

•Product differentiation and barriers to entry allowed the company to gain more popularity and market share.

Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

Successes
- Expansion
•By 1977, Levi Strauss & Co. is the world’s largest jean manufacturer. •Department stores and boutiques sell Levi’s products and are additional channels of distribution for the company. •Levi’s provides a wide range of products that target different market segments, capturing demands. •After the release of the 501 product line, Levi’s enjoys worldwide market dominance in the denim jean market. •Levi Strauss & Co. maintains it’s image as an American Icon and the originator of American jeans.

Problem Background Successes Competition Solutions Responsibility Conclusion Q&A

Successes
- Positioning
•Other marketing strategies, like the position of the product, created increased differentiation, contributing to the companies market power. •In 1930s, the company survived the Great Depression due to increased interest in Western culture. –Jeans were positioned as being worn by “cowboys.” cowboys.”

•Levi’s jeans were issued to employees in the defense industry (including veterans) during World War II. –Post World War II, veterans that went to college wore Levi’s jeans on Levi’ campuses, increasing popularity. •WWII veterans were regarded as heroes.

–Jeans were shown to be suitable for casual wear, rather than work. work. –During the Baby Boom era, Levi’s targets younger consumers and Levi’ positions product as “cool.” cool.” •Early movie stars wore Levi’s jeans. An example of celebrity...
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