Levis Essay

1405 WordsMay 29, 20096 Pages
CASE ABSTRACT Levi Strauss & Co was founded in 1853 by a Bavarian immigrant, Levis Strauss. In 1873, along with tailor Jacob Davis, Levi’s patented the process of putting rivets in pants to make them stronger. The first jean was thus born. Present in more than 160 countries and employing around 11,550 people worldwide, the company is now very successful and a major US symbol (Exhibit 1). The case describes the difficulties the firm is facing in 1994 in Japan, due to the shrinking market and new distribution channels. Japan is a unique market, compared to the rest of the world. Concerning jeans, Levi’s managers had to design their own models, which would fit Japanese taste, and could not rely only on importing American models. Levi’s is not yet a leader in the Japanese market, even though it shows good results. Competitors such as Edwin have twice as many stores as Levi’s. These issues are still relevant today, as the market is still shrinking. Some of the issues addressed by Levi Strauss Japan K.K. are: • How can Levi’s cope with a shrinking market? • Do they have to change their marketing strategy? • How should they compete with aggressive competitors? • What pricing strategy should they adopt? • Which distribution channel is most suitable for them? CRITICAL ISSUES Issue 1: Shrinking market size The traditional market for jeans in Japan would likely shrink or remain flat due to lower birth rate (Exhibit 2). Besides, the average number of jeans purchased per person per year in Japan is 0.5 compared to 1.5 in the US, one of the reasons being that Japan’s high schools require students to wear uniforms. Additionally, Levi's main focus for their products is the segment of male consumers. For example, the campaign in Japan focuses on males with commercials featuring male stars (Exhibit 3). The company also offers products to female consumer youngsters,

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