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An Analysis
Young Lee
James Moon
Michael Lin
Problem
•The premium jeans market has over the last five years
largely driven the growth of an otherwise stable jeans
market, as premium jeans sales grew at a 40-45% rate
for multiple years. Levi’s failure to adequately respond to
this trend was a large part of its posting declining sales in
nine out of ten years prior to 2007.
•Brand Loyalty
–Many of Levi’
Levi’s ads stress brand loyalty to maintain existing customers.
The word “original”
original” is used many times.
–Some tv ads are set in the late 1800s, stressing the historic value of the
company.
•Brand Image
–At the same time, Levi’
Levi’s ads stress the “youthfulness”
youthfulness” of their brand
jeans.
–The 501 product line and the Red Tab collections offer jeans that
that appeal
to younger consumers competing with the high-
high-end jean competitors.
–Television advertisements are more innovative and target younger
crowds.
–http://www.youtube.com/watch?v=CSG807d3P-
http://www.youtube.com/watch?v=CSG807d3P-U
–http://www.youtube.com/watch?v=skWFyop_pxU&feature=related
–http://www.youtube.com/watch?v
http://www.youtube.com/watch?v=W =W--SZN1VRIl4&feature=related
•These marketing strategies however did not help with the worldwide
decrease demand for jeans. This implies that other clothing is
becoming a substitutable good for jeans.
•Economic implications
–Organic jeans are more expensive, due to the added costs to
certify these genes to organic standards.
–However, discouraging the use of chemicals for cotton is a
step toward the right direction. Pesticides have externality
costs to the environment and workers, because they are mostly
improperly used in poor countries. A reduction in externalities
improves social welfare.
–In the long-run, sustainable production has the possibility to
being profitable.
–Corporate responsibility also has long-run profits.
Frith,
Frith, Maxine. “The Ethical Revolution Sweeping Through the World’ World’s
Sweatshops.”
Sweatshops.” commondreams.org.
commondreams.org. 16 April 2005. 2 May 2008
<http://www.commondreams.org/headlines05/0416-
<http://www.commondreams.org/headlines05/0416-01.htm>.
Girard, Kim. “Supply Chain Partnerships: How Levi’ Levi’s Got Its Jeans into
WalMart.
WalMart.” CIO.com.
CIO.com. 15 July 2003. 4 May 2008
<http://www.cio.com/article/31948/Supply_Chain_Partnerships_How_L
<http://www.cio.com/article/31948/Supply_Chain_Partnerships_How_L
evi_s_Got_Its_Jeans_into_Wal_Mart>.
Lee, Louise. “Why Levi’
Levi’s Still Looks Faded.”
Faded.” Business Week Online.
Online. 22 July
2002. 5 May 2008
<http://www.businessweek.com/magazine/content/02_29/b3792068.ht
m>.
“Levi Strauss & Co.
Co. 2006. Levi Strauss & Co. 1 May 2008
<http://www.levistrauss.com
<http://www.levistrauss.com>. >.
“Levi Strauss & Co.”
Co.” Wikipedia, Encyclopedia. 6 May 2008. 6 May
Wikipedia, The Free Encyclopedia.
2008 <http://en.wikipedia.org/wiki/Levi_Strauss_%26_Co.>.
“Levi Strauss & Company – Roots in the gold rush”rush”
www.referenceforbusiness.com
www.referenceforbusiness.com.. 2007. 3 May 2008
<http://www.referenceforbusiness.com/businesses/G-
http://www.referenceforbusiness.com/businesses/G-L/Levi- L/Levi-Strauss-
Strauss-
Company.html>.
Company.html>.
Strauss’s Corporate Citizenship Value Proposition: Original and Authentic.
Levi Strauss’ Authentic.””
Center for Corporate Citizenship.
Citizenship. April 2007. 3 May 2008
<http://www.bcccc.net/index.cfm?fuseaction
<http://www.bcccc.net/index.cfm?fuseaction= =Page.ViewPage&PageID=
Page.ViewPage&PageID=
1649&stopRedirect=1>.