The World Largest Brand Name Apparel Marketers Marketing Essay

The World Largest Brand Name Apparel Marketers Marketing Essay Levis Strauss and Company is one of the world largest brand-name apparel marketers. Levis Strauss and Company is one of the successful Jeanswear shop in America States. The innovation of the rivets in the jeans differentiated Levis jeans from others because of its increased durability. (Levis) The Fast changes in consumer tastes, competition from both lower and higher-end brands, the fast development in the modern distribution and sales technology has brought about a continuing loss of market share. (Levi Strauss Co. Marketing Plan) Levis Strauss and company was established in 1873, Levis jeans are the original, authentic jeans. They are the most successful, widely recognized and often imitated clothing products clothing product in the history of apparel. Over successive generations, Levis jeans have captured the attention, imagination and loyalty of diverse individuals. (Levis) As the inventor of the category, the Levis brand continues to define jean wear with the widest range of products available, from quintessential class such as the famous Levis 501 Original jean, to favorite fits and styles in the Red Tab and premium collections. (Levis) 1.1 Mission To sustain responsible commercial success as a global marketing company of branded apparel. They must Balance goals of superior profitability and return in investment, leadership market positions and superior product and services. They will conduct their business ethically and demonstrate leadership in satisfying their responsibilities to their communication and to society. (Levi Strauss Co. Marketing Plan) 1.2 Vision Levis Strauss brands are filled with examples of the key role their value have played in meeting consumer needs. Four core values are at the heart of Levi Strauss Co Empathy, Originality, Integrity and Courage. These four values are linked. As Levis look at their history, a story of how Levis core values work together and are the source of their success. Likewise, Levis brands embody many of the core values that consumers live by. This is why Levis brands have stood the test of time. 2. Objective The objectives of Levis brand continues to define Jeanswear with the widest range of product available, from quintessential classics, such as the famous Levis Original jean, to favourite fits and styles in Red Tab and premium collections. Levis jeans have captured the attention, imagination, and loyalty of generations of diverse individuals. The brand has continues received critical acclaim from industry insiders. The brands profile is growing internationally. Levis Strauss and company next target focus to expand more in different city flagship store. To review Levis Jeanswear market situation of the global highlighting the competitive positions and branding strategies of the market. To identify the successful branding strategies Levis Jeanswear has employed to achieve its dominant market position. To evaluate on the effectiveness of Levis Jeanswear branding strategies in sustaining its sales performance. 3. Situation Analysis Situation analysis is a marketing term, and involves evaluating the situation and trends in particular companys market. Situation analysis is often called the three C, which refers to the three major elements that are Company, Customers, and Competition. Company Despite these reductions Levi Strauss Company had most of its early success because the firm was behaving monopolistically. The company patented the riveted jeans, increasing durability, and gaining popularity. Levis Strauss Co. maintained its corporate responsible image and progressive stance on social, labor, and environmental issues, which may have long run profit opportunities. Customers There is many Levis Jeanswear loyalty to maintain existing customers. Levis Jeanswear is the youthfulness of their brand jeans. The 501 product line and the Red Tab collection offer jeans that appeal to younger consumers competing with the high-end jean competitors. Competition Competitors successfully were able to take from Levis market due to heavy advertising and branding. Branding was especially effective for companies like Calvin Klein that targeted high-end consumers. Levis jeans may be physically the same as its competitor physically competitors, consumer preferences are affected by brand name. 3.1 SWOT analysis Levis opportunities and threats Levis Strauss, Levis Strauss Co. is one of the worlds largest brand-name apparel marketers with sales in more than 110 countries. There is no other company with a comparable global presence in the jeans and casual pants markets. Nowadays Levi Strauss develops technological higher production and coordination activities. In addition, Levi Strauss also develop new website is convenient for consumers shopping and also develop new products and services. The constant of threats is possible recession and people less likely to spend money on trend items and economic downturns in some countries. Bad economic is also an issue for Levis Strauss such as recession and the weakness of currency, people are likely to spend lesson trend items. Other than that, increasing competition from product of the higher end of the market and price wars with competitor. 3.2 Value chain analysis Support activities Primary activities Primary activities Inbound logistics: Inbound Logistics is the transportation planning in one of the major business processes. In order to achieve operational excellence, increase the merger, Levis Strauss plans common needs and external traffic inbound logistics, receiving their suppliers purchase. They stored goods production or assembly line needs. Goods may move around the organization. Operations: At this stage of product assembly or manufacturing. Self is co-produced fashion industry packaging. The design of the packaging represents the image of Levis Strauss. Outbound logistics: Collect, store and distribute the product to send along the supply chain to retailers in different countries. The retailers will send goods to outlets. Marketing and sales: The marketing communication strategies are the best ways to deliver message to consumers that Levis Strauss applied were advertising through the magazines, bill board and fashion show. Prepared to provide targeted, in order to meet consumer demand. Service: To fulfill consumers desirable, that are some things should have to concern on these; consumer always has clothes fitness problems, thus after sales service is important to exchange the size of Jeanswear or modify it. Other than that, to provide stuffs training how to service difference behavior of consumers and updating their Jeanswear information. Support activities Procurement: Levis Strauss needs of all the goods, services and materials procurement. This is because for the lowest possible price to buy the highest quality possible. This includes outsourcing that is usually done in-house business for the same from other companies and use of IT and networking technology to achieve procurement goals. Technology development: The innovation of technologies helps the Levis Strauss to sustain competitive advantage. Technology is an important of the competitive advantage. Human resources management: Levis Strauss is guided by a strong growth strategy in managing and developing its human resource capacity. Potential employees are evaluated in terms of their alignment to the companys winning characteristics which are directly linked to the Levis business strategies, mission and vision of integrity, courage, empathy and originality. Firm infrastructure: The formal systems of planning finance quality control, information management and the structures and routines that are part of an organizations culture. 3.3 PEST analysis The remote environment comprises factors that originate beyond and usually irrespective of, any single firms operating section: political, economic, social and technological factors. That environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence. Political factor: Political factor is very important to make sure the growth of the clothing industry in America States. With the peaceful environment, America States became one of the worlds attractive fashion destinations. (Easy club) Economic Factor: One of the main beneficiaries of the recession is the value clothing sector as consumers spend most on discretionary items with increased caution. According to Verdict forecasts, America States clothing spends in 2009 had declined 0.6%. However, estimation that value clothing sales will grow by 5.0%. Grocers are expected to make further gains in 2009 and increase their share of the value clothing market to 34.2%. In long term, the gains that grocers to be made will prove a further threat to value clothing specialists by improving store environments and fully exploiting multichannel capabilities. Social factor: Americans become more enjoy fashion nowadays; they will conservative and old-fashioned image of traditional shops. They prefer on those shops with a trendier image, such as Levis older and often affluent consumers remain fashion conscious. Technological factor: Levis have combined the four core technology are at the heart of Levis Strauss Co Empathy, Originality, Integrity and Courage, durable and easy to care for. However, further technology on textile with other characteristics will produce, such as cellulite-reducing hosiery or moisturizing properties. Prices are likely to increase as the result of these changes in the textile technology, therefore assisting in growing the value of the market. 3.4 Porters 5 Forces Industry Competitive: Jeanswear industry is characterized by small fashion 501, but there has been a recent trend towards consolidation and economies of scale. Businesses compete on price, quality, differentiation and relationship with key suppliers. However, there are not many players that establish a reputation for bringing style and innovation to the high street. Due to this Levis has the advantage of being a high streets retail phenomenon. Bargaining power of suppliers: Suppliers do not have much bargaining the fashion industry because their products and their commercial nature of the sales forces of developed markets. Can affect the garment industry from the original input price fluctuations, but the change is a global determinants of supply and demand, rather than the bargaining power of suppliers caused. Bargaining power of customers: The buyers power is significant in that buyers can force prices down, demand higher quality products or services, and, in essence, play competitors against one another, all resulting in potential loss of industry profits. Buyers exercise more power when they are large-volume buyers, the product is a significant aspect of the buyers costs or purchases, the products are standard within Jeanswear industry, there are few changing or switching costs, the buyers earn low profits, potential for backward integration of the buyer group exists, the Jeanswear is not essential to the buyers product, and the buyer has full disclosure about supply, demand, prices, and costs. (Reference for business) Threat of new entrants: New entrants can also expect a barrier in the form of government policy through federal and state regulations and licensing. New firms can expect retaliation from existing companies and also face changing barriers related to technology, strategic planning within the industry, and manpower and expertise problems. Threat of Substituted: The substitute product in fashion industry is low. Every individual needs to wear clothes in their daily activities to prevent cold and harmful to their skin. There is no substitute other than wear clothes. The only alternative is individual can make clothes their own but this alternative rarely happen. 3.5 Ansoff matrix Existing Product New Product Existing Market New Market In Ansoff Matrix, Levis Strauss is currently in position of market penetration as Levis Strauss intends to sell its existing markets to maintain or increase the market share of current product. This can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling. Other than that, increase usage by existing customer by introducing loyalty schemes; the business is focusing on markets and product it knows well. It is likely to have good information on competitors and on customer needs. On the other hand, Levis Strauss also in different position of market development intends to sell its existing product into new markets in different countries. In this stage, Levis Strauss is facing medium-high risk in entering new market as there in many popular clothes retailer in the market. The issues of new geographical, product packaging, distribution channels and different pricing policies to attract different customer or create a new market segments that is Levi Strauss planning to enter must also take into consideration. Therefore, Levis Strauss takes risk segmentation into different countries. 3.6 Porters Generic Strategies Cost Differentiation Broad Narrow Levi Strauss is paining to employ differentiation strategy to make Levis Jeanswear to be more common, Levis Strauss provides Levis 501 Original Jeanswear for men, women, teens, and children. Since launching the campaign, worldwide sales of 501 jeans have increased substantially. Although it is encouraging to see the flagship 501 line growing again, these sales increases were not incremental. So everyone is a potential customer for Levis. Levis generally appeals to more mature generations not necessarily looking to make a fashion statement. Levis makes an effort to appeal to all customers in one way or another, which been a key to their success over the years. 4. Evaluation of Suitability The suitability of the strategic options is assessed based on their compatibility with the current competitive environment of the fashion industry, Levis own corporate vision and mission and how it would sustain or improve the competitive position of the organisation. Strategic Position Concept To understand Strategy must address PEST Key environmental Driver/ Changes in industry Structure The remote environment comprises factors that originate beyond and usually irrespective of, any single firms operating section: political, economic, social and technological factors. That environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence. Porters Five-Forces Industry attractiveness competitive forces Porters essential message is that where these five forces are high, then industries are not attractive to compete in. There will be too much competition and too much pressure to allow reasonable profits. Value Chain Opportunities for vertical integration or outsourcing A value chain describes the categories of activities within and around an organisation, how Levis create a product or services 4.1 Tows matrix Levis Strauss chosen because it demonstrates how a successful company experienced great difficulties in the early 1853, but then developed a strategy that resulted in an excellent market position in the late 2003. The TOWS Matrix shown will focus on the crucial period from late 1853 to early 2003. The external threats and opportunities pertain mostly to the situation Levis Strauss faced in the United States. Strengths (S) Brand name. Access to target market with over 300 stores nationwide. Finance and access to international capital. Distribution channels and global sourcing. Weakness (W) High costs of brand protection. Lack of control over quality. Lack of control over distribution. Distribution conflicts. Opportunities (O) Largest brand-name apparel marketers with sales in more than 110 countries. Technological development higher production and coordination activities. Develop new product and services. A new market on website shipping. SO-Strategies Increase sales and supply to different countries. (S1,O1) Build technological development higher production and new production and services in different 300 stores nationwide.(S2, O2, O3) Create channels and website shipping to global sourcing. WO-Strategies High costs of production brand in markets. (W1, O1) Lack of control in technological development production and distribution. (W2, W3, O2) Improve distributor services and website shipping benefits. (W4, O3, O4) Threats (T) Possible recession and people less likely to spend money on trend items. Competition from product of the higher end of the market. Economic downturns in some countries Price wars with competitors Increasing competition. ST Meet competitors advanced design of the market. (S1, S2, T2) Economic and finance are the keys of the issue. (S3, T1, T3) Globalization increasing competitor and price wars with competitors. (S4, T4, T5) WT Reduce threat of competition by developing flexible product line. (W1, W2, W3, T1, T2) 4.2 Direction for Growth Strategic option To summarises these point from earlier section and provides examples of reasons why strategy directions or might be regarded as suitable. Strategic Environment Capability Expectations Market penetration Levi Strauss intends to sell its existing markets to maintain or increase the market share of current product. Increase usage by existing customer by introducing loyalty schemes; the business is focusing on markets and product it knows well. It is likely to have good information on competitors and on customer needs. Market development Levi Strauss is facing medium-high risk in entering new market as there in many popular clothes retailer in the market. The issues of new geographical, product packaging, distribution channels and different pricing policies to attract different customer or create a new market segments that is Levi Strauss planning to enter must also take into consideration Levi Strauss intends to sell its existing product into new markets in different countries and takes risk segmentation into different countries. Differentiation Differentiation strategy to make Levis jean to be more common. Levi Strauss provides Levis 501 Original Jeanswear for men, women, teens, and children. So everyone is a potential customer for Levis. Levis generally appeals to more mature generations not necessarily looking to make a fashion statement. Levis makes an effort to appeal to all customers in one way or another, which been a key to their success over the years. Ranking strategic options Options are assessed against key factors relating to the strategic position of the organisation and a score or ranking established for each option. Key strategic factors Strategic option Family ownership Increased globalisation Low-price imports Increased of marketing Good of quality control Increased sales Ranking Market penetration O X O X O ? B Market development X O X O X O C Differentiation O X O O O O A O=favourable; X=unfavourable;? =uncertain or irrelevant. A=most suitable; B=possible; C=unsuitable. Evaluation of Acceptability The acceptability of the strategic options is assessed based on the stakeholders expectations. 5.1 Stakeholders Expectations The stakeholders of Levis Strauss are comprised of shareholders, management, employees, suppliers, contributors and the customers. The shareholders are likely to accept all the strategies as they have already witnessed Levis Strauss successful turnaround and regain of profitability. The management built up more positive steps in achieving its vision and mission these initiatives illustrate the progress Levis Strauss have made in building strong, collaborative relationships with their wholesale customers. To working closely with these customers and developing plans to ensure Levis brands continue to be broadly accessible to consumers despite continued retail door closures and bankruptcies in the United States. On the other hand, the employees may be very supportive of the differentiation strategy and market development business simplifying measures recommended. The suppliers and contributors would have learnt by now to live with Levis Strauss differentiation strategy and market development their operations to fit themselves into Jeanswear operating style. Levis customers are likely to welcome the Jeanswear innovation capabilities with the creation of a Global Market Development Centre at their owned-and-operated manufacturing plant in different courtiers. Strategy 1- Market Development Key stakeholders Rewards Risks Shareholders Higher profit, performance, clear direction. Unpredictable economics crisis. Managers Performance, targets, growth, bonus. Cultural problems. Employees Rates of pay, high employment rate. Job security, time period. Trade unions Working conditions, wages rate. Legal requirements. Customers More Levis Jeanswear available. Ethical products. Suppliers High demand of resources. Delivery problems. Government Taxation. Explicit Federal laws in certain countries. General public Jobs, involvement, shares Environmental issues Strategy 2-Differentation Key stakeholders Rewards Risks Shareholders Higher profit, performance, clear direction. Loss. Managers Performance, targets, growth, bonus. Time consume, sales volume. Employees Rates of pay. Job security. Trade unions Working conditions, minimum wages. Legal requirements. Customers More choices, better quality and customer care. Ethical products. Suppliers High demand of resources. Government Taxation. Legislation. General public Jobs, involvement, shares. Environmental issues. Feasibility The feasibility of the three strategic options is assessed based on the Levis Strauss current resources. Current Resources The actual resources required for the implementation of the three strategies are summarized in Table 4 under four categories: (1) product/service feasibility, (2) market feasibility, (3) organizational feasibility and (4) financial feasibility. Strategy 1- Market development Key resources Analysis Product/ Service feasibility Levi Strauss market development intends to sell its existing product into new markets in different countries. Levi Strauss must control their product and service quality, the patent strategy to maintain its brand reputation. Market feasibility The issues of new geographical, product packaging, distribution channels and different pricing policies to attract different customer or create a new market segments that is Levi Strauss planning to enter must also take into consideration. Organizational feasibility The brand and formula have to carefully designed and properly execute. Levis Strauss able to expand rapidly takes risk segmentation into different countries. Financial feasibility According to the Levis Strauss annual report 2009 that company sales and profit has increased, so there are no financial problems to support market develop strategy. . Strategy 2- Differentiation Key resources Analysis Product/ Service feasibility Levi Strauss provides Levis 501 Original Jeanswear for men, women, teens, and children. Since launching the campaign, worldwide sales of 501 jeans have increased substantially. market feasibility The flagship 501 line growing again, these sales increases were not incremental. So everyone is a potential customer for Levis. Levis generally appeals to more mature generations not necessarily looking to make a fashion statement. Organizational feasibility Levis generally appeals to more mature generations not necessarily looking to make a fashion statement. Levis makes an effort to appeal to all customers in one way or another, which been a key to their success over the years. Financial feasibility According to the Levis Strauss annual report 2009, the sales and profit of the company has increased, so there is no financial problem to support franchising strategy. However, the in-store advisor service is free of charge; Levis Strauss has to cover this expense from other sectors. Selection of One Strategic Option for Implementation The above evaluation data have indicated that in fact all the two strategic options are equally important and necessary for the future growth of Levis Strauss and should be implemented to the long term benefits of Levis Strauss. The complexity and risks in implementation of the two options are summarized in below. Strategic Option Implementation Requirements Complexity Risk (1) Market development Involves higher capital injection management ingenuity to implement in view of other competitors Hardest with higher risks (2) Differentiation Involves strong management will and resolve to implement. Changing staffs working attitudes and instituting a new Levis 501 Original Jeanswear for men, women, teens, and children. Launching the campaign, worldwide sales of 501 jeans have increased substantially would need a lot of patience and tact. Medium hard, needs management will and tact Naturally, among the two strategic options, the strategic option 2 should be selected as the first choice since it can be implemented quickly and getting faster results. Implementation From the evaluation above, Levis Strauss select differentiation strategy to achieve their vision and mission. Differentiation strategy helps Levis Strauss to expand further more different gender and different ages to wear Levis Jeanswear and establish the brand as a fashion authority in every city. The implementation strategy can describe in three sections, which is resources management, organizational structure and management of change. Key issues Analysis Resources management Resource management refers to the possibility under discussion is a factor. Levi Strauss has confirmed that the factor is the most likely way to work. Levi Strauss can use the budget or other performance management tools to study the effectiveness of differentiation strategy. Organizational structure In this stage Levis Strauss has to deal with issues regarding levels of hierarchy, together with structural form and style of management. Management of change Some management of Levis Strauss might not aware of the need for changes in strategy implementations. Thus Levis Strauss must review the speed, scope and style of the changes, in order to obtain full commitment to them. The company maintained profits by providing a wide range of products, capturing new markets and increasing its market shares. The company created barriers to entry by patents and trademarks, and by differentiating its product from generic jeans. However as more firms entered the market, the company started losing customers and incurring losses. The upstart companies captured niche market shares from Levi Levis s immense market domination. Despite this reduction of sales, Levi Strauss Co. maintained its corporate responsible image and progressive stance on social, labor, and environmental issues, which may have long long-run profit opportunities. Conclusion This report had analyzed the situation and the growth strategy of Jeanswear line of Levis Strauss. The evaluation of the suitability, acceptability and feasibility had examined on chosen options. The options are products and services development and differentiation strategy. The strategy chosen is differentiation strategy to achieve the mission and vision. The launch of differentiation strategy helps Levis Strauss to expand their business effectively and efficiently. By respond quickly to emerging trends, Levis Strauss has become a successful fashion retailer within the shortest possible lead times to carve out a reputation for its ability.