Levi Strauss benchmarking Essay

584 WordsMar 28, 20093 Pages
Levi Strauss At one time Levi Strauss produced a product that was “the world’s eighth most recognized brand,” (Calgary Herald, 2003, p. A.12) but now the company has been forced to become creative in order to continue in business. One choice Levi Strauss and Co. made was to expand the product line to stay competitive; the second choice the company made was to outsource their manufacturing operations offshore. Like Global Communications, Levi Strauss needed to make dramatic decisions to remain competitive. In 1996, Levi’s sales were $7.1 billion; in 2002 the sales had dropped to $4.1 billion. (Fishman, 2003, p. 68). Levi Strauss Co. restructured two parts of their product line. First, Levi changed part of their focus to a different segment of their marketplace, the outlet retailers, and partnered with GENCO to optimize the benefits of the R.I.S.E. (returns, irregulars, samples, exit strategy returns) process. This process improved profitability through the benefits of “improved outlet store performance, increased sales revenues through better inventory management and tighter risk management controls.” (Business Editors, 2001, p. 1). The second phase of changing the product line came when Levi’s opted to sell their product at Wal-Mart. Levi was looking to Wal-Mart to revive their slumping sales. But in Wal-Mart stores Levi’s current product line would be too expensive. Levi had to come up with an alternative and the Levi Strauss Signature brand was born. By the third quarter of 2003, Levi’s sales were up 6%.(Fishman, 2003, p. 68) The second change of course Levi Strauss Co. made was to outsource the manufacturing functions to Latin America, Asia and the Caribbean. During the 1980s Levi had more than 60 domestic factories, and now not a single pair of blue jeans are made in the United States. A spokesman for Levi Strauss said, “We are moving away from manufacturing

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