Levi Strauss and Co. And explain how the company has used Its high market share, financial wealth, and reputation to get them where they are today. Next, I will tell how new markets and market growth provide them with the opportunity to continue their successes. I will also make some recommendations of how can utilize their strengths and opportunities In order to offset their vulnerable management and continue to have a strong market share. As one of the most successful brands of clothing, Levi Strauss & Co. Has many strengths.
One of their biggest strengths is their market share. Having been around for one hundred and fifty years, has been able to gain and hold a specific share of the clothing industry. Other companies do not come close to its jean sales, and seventy five percent of American men own a pair of Dockers khaki slacks. Controlling a large portion of the clothing market has also led the company to strong financing. Levi Strauss & Co. Brings in billions of dollars in revenue each year. Last year alone, they took in about six billion lairs In revenue, which produced a little over one billion dollars in cash flow.
A third major strength of Is that the company has a superior reputation for quality apparel and good work ethic. Driven by social values, rather than Just profits, CEO, Robert Has has created many projects that have helped to build up this reputation. He pulled operations out of China to protest human rights abuses and began a reengineering project that focused on making Levi Strauss & Co. The most responsive apparel company in the industry. Although Levi Strauss & Co. S well established, they have a couple major weaknesses. One of these weaknesses has to do with their inadequate research and development team.
Dockers stayed put while other companies banked on the wrinkle-resistant khaki market. Also, continued to push its basic Jeans after other companies were profiting off of Jeans with wider legs. These are both examples of how Levi research and development department has lost out on profits by falling to focus their attention on the needs. A second major weakness of Levi Strauss & Co. Has to do with Its vulnerable management. Other than the four men who control the votes, no one has any say in the company until 2011, when the shareholder agreement expires.
Whatever these men decide becomes the plan because they do not have to answer, or explain themselves, to anyone. Couple possible environmental opportunities of this organization are growing existing markets and new markets. With more and more companies allowing their employees to wear casual attire in the workplace, rather than business suits and dresses, khakis are going to be a growing market that may profit Levi Strauss and Co. Loud also start a new market emphasis in young clothing. Children are the ones that are most often in play clothes, jeans, and overalls.
Devoting a larger share of their market strategy to young clothing may help to Increase revenue. The threats that are currently facing have to do with the changing tastes In the denim market, and also new competitors. Changing tastes in the denim market include the ideas that kids are no like their parents. While other companies were introducing forty-inch wide leg Jeans with seventeen-inch deep pockets, Levi Strauss continued to push their basic Jeans tit sixteen-inch wide legs and six-inch pockets. This also leads to increasing competition.
Unlike when the company first started, in now faced with hundreds of competitors with names like Arizona, Feb.., LEI, JUNCO, Mud, Union Bay, Tommy, and Faded Glory, to name a few. In order for Levi Strauss & Co. To remain a successful brand, I would recommend that use some of their billion- dollar cash flow to invest a greater amount of money into their research and development department. They could use this money to communicate with their customers in order to find out what kind of products they are in the market to buy. Would develop a web site that would be accessible to customers twenty-four hours a day. Here, customers could express their concerns, ask questions, and answer a survey about the quality of products. They could give feedback about what they are doing that is good, and also make suggestions on how could improve their products. Research and development needs to encourage this customer feedback because it is essential to the company and without the customers, the company could not function.
I would also recommend that enter new markets in order for the company to continue to have a strong market share. A way for Levi Strauss and Co. To do this would be to start looking into the market for young clothing. Young children run around all day in Jeans, overalls, and other play clothes. Since Levi„ is best known for its quality denim and active wear, they could run large campaigns to encourage parents to buy durable clothing for their children. Once adults begin to see how long clothing lasts with their children, they will be encouraged to buy it for themselves.
Concentrating on new markets is a good way for Levi Strauss and Co. To continue to have a high market In conclusion, has used its high market share, financial share. Wealth, and reputation to get them where they are today. They are also faced with new markets and market growth, which provide them with the opportunity to continue their success. I would recommend that utilize these strengths and opportunities in order to offset their vulnerable research and development department and allow them to continue to have a strong market share.