Case Study: “Levi Strauss’s Goes Global”
Book: Organizational Theory, Design, and Change
Gareth R. Jones
Discussion Question 1 and 2
1. How does Levi Strauss take advantage of the global environment? 2. What structure does Levi Strauss use to implement its strategy?
This case demonstrates how a company can pursue a transnational strategy and which organizational structure supports this strategy. “Levi Strauss”, the company under discussion has located its production facilities around the world, where ever it costs them the cheapest to produce and customizes its products to local tastes for higher responsiveness. Foreign subsidiaries are responsible for marketing and distributing in the local area. The company also transfers information and knowledge abroad. To implement its strategy, Levi’s employs a network structure. Design, production and ethical standards are set in the U.S. and foreign partners produce and distribute products as per the local taste.
Ans 1.Since Levis is considered a status symbol and commands a premium from European and Asian consumers, where in the U.S. its status has been eroded by the competitors like Calvin Klein and Ralph Lauren, it motivates Levis to sell its products in the global market. Multinational organizations like Levis have to implement international strategies to deal with the demand of both external flexibility and internal efficiency (Wasilewski & Nikolai,2001) Levis also has to customize its offering as per local taste as different markets have varied needs in terms of size, color etc i.e. achieve national responsiveness and also has to take advantage of low cost raw material, production facilities where ever they are available i.e. global integration. Out of different international strategies like multi-domestic, multi-focal, global, transnational etc A transnational strategy seeks to achieve high levels of both national responsiveness and global integration...