Cost and Differentiation theory LEVI'S

LEVI’S

                                                                            

Introduction of Levi’s

Levi Strauss & Co. is a worldwide corporation organized into three geographic divisions: Levi Strauss Americas (LSA), based in the San Francisco headquarters; Levi Strauss Europe, Middle East and Africa (LSEMA), based in Brussels; and Asia Pacific Division (APD), based in Singapore. The company employs a staff of approximately 10,500 people worldwide. The core Levi's was founded in 1873 in San Francisco, specializing in riveted denim jeans and different lines of casual and street fashion.

From the early 1960s through the mid-1970s, Levi Strauss experienced explosive growth in its business as the more casual look of the 1960s and 1970s ushered in the "blue jeans craze" and served as a catalyst for the brand. Levi's, under the leadership of Walter Haas Jr. Peter Haas, Ed Combs, and Mel Bacharach, expanded the firm's clothing line by adding new fashions and models, including stone-washed jeans through the acquisition of Great Western Garment Co.(GWG), a Canadian clothing manufacturer, and introducing Permanent Press trousers under the Starkest name. The company experienced rapid expansion of its manufacturing capacity from fewer than 16 plants to more than 63 plants in the United States from 1964 to 1974 and 25 overseas. Levi's' factory expansion was accomplished without a single unionized employee. The use of "pay for performance" manufacturing at the sewing machine operator level up. As a result, Levi's' plants were perhaps the highest performing, best organized and cleanest textile facilities of their time.

Levi's even piped in air conditioning for the comfort of Levi's workers into its press plants, which were known in the industry to be notoriously hot.2004 saw a sharp decline of GWG in the face of global outsourcing, so the company was closed and the Edmonton manufacturing plant shut down. The Dockers brand, launched in 1986 which is sold largely through department store chains, helped the company grow through the mid-1990s, as denim sales began to fade. Dockers were introduced into Europe in 1993. Levi Strauss attempted to sell the Dockers division in 2004 to relieve part of the company's $2 billion outstanding debt. Launched in 2003, Levi Strauss Signature features Jeanswear and casual wear. In November 2007, Levi's released a mobile phone in co-operation with Mode Labs. Many of the cosmetic attributes are customizable at the point of purchase. During the launch of Levi's Curve ID jeans.

Brands of Levi’s

Brand is a name, term, sign, symbol or design that adds value to the products. LS & CO. earns remarkable revenues throughout the year coz its products are considered to be the world’s largest quality products

LS & CO. is basically divided into 3 sub brands i.e. Levi’s, Dockers and Levis Strauss Signature. All the three brands are providing different quality products.

LEVI’S ®

The Levi’s brand epitomizes classic American style and effortless cool and is positioned as the original and definitive jeans brand. Since their inception in 1873, Levis jeans have become one of the most recognizable garments in the world reflecting the aspirations and earning the loyalty of people for generations.

Consumers around the world instantly recognize the distinctive traits of Levi’s jeans — the double arc of stitching, known as the Arcuate Stitching Design, and the red Tab Device, a fabric tab stitched into the back right pocket. Today, the Levi’s brand continues to evolve, driven by its distinctive pioneering and innovative spirit. Our range of leading Jeanswear and accessories for men, women and children is available in more than 110 countries, allowing individuals around the world to express their personal style.

The current Levi’s product range includes

            Levi’s Red Tab Products These products are the foundation of the brand. They encompass a wide range of jeans and Jeanswear offered in a variety of fits, fabrics, finishes, styles and price points intended to appeal to a broad spectrum of consumers. The line is anchored by the flagship 501» jean, the original and bestselling five-pocket jean in history The Red Tab line also incorporates a full range of Jeanswear fits and styles designed specifically for women. Sales of Red Tab products represented the majority of our Levi’s brand net sales in all three of our regions in fiscal years 2009, 2008 and 2007.

Premium Products In addition to Levi’s Red Tab premium products available around the world, Levis offer an expanded range of high-end products. In 2009, we consolidated the management of our most premium Levi’s Jeanswear product lines under a new division based in Amsterdam. This division will oversee the marketing and development of two global product lines: our existing Levi’s Vintage Clothing line, which showcases our most premium products by offering detailed replicas of our historical products, and Levi’s Made & Crafted, a recently-launched line of premium apparel. Levi’s brand products accounted for approximately 79%, 76% and 73% of our total net sales in fiscal 2009, 2008 and 2007, respectively, approximately half of which were generated in our Americas region.

DOCKERS

First introduced in 1986 as an alternative between jeans and dress pants, the Dockers brand is positioned as the khaki authority and aspires to be the world’s best and most-loved khakis. The Dockers brand offers a full range of products rooted in the brand’s khaki heritage and appropriate for a wide-range of wearing occasions. We seek to renew the appeal of the casual pant category by dealing up khakis’ masculinity and swagger and reminding men what they love about the essential khaki pant. This positioning is reflected in the “Wear the Pants” campaign launched globally in December 2009.

The brand also offers a complete range of khaki-inspired styles for women with products designed to flatter her figure and provide versatility for a wide range of wearing occasions. Our Dockers» brand products accounted for approximately 16%, 18% and 21% of our total net sales in fiscal 2009, 2008 and 2007, respectively. Although the substantial majority of these net sales were in the Americas region, Dockers brand products are sold in more than 50 countries.

Levis Strauss Signature

            Levis seek to extend the style, authenticity and quality for which our company is recognized to more value conscious consumers through our Signature by Levi Strauss & Co.TM brand. Levi’s offer products under this brand name through the mass retail channel in the United States and Canada and value-oriented retailers and franchised stores in Asia Pacific. Levi’s use these distribution channels to reach consumers who seek access to high-quality, affordable and fashionable Jeanswear from a company they trust.

The product portfolio includes denim jeans, casual pants, tops and jackets in a variety of fits, fabrics and finishes for men, women and kids. Signature by Levi Strauss & Co. TM brand products accounted for approximately 5%, 6% and 6% of our total net sales in fiscal years2009, 2008 and 2007, respectively. Although a substantial majority of these sales were in the United States, Signature by Levi Strauss & Co.TM brand products are sold in seven additional countries in our Americas and Asia Pacific regions.

How Levi’s Differentiates It Self?

With all of the competition in the apparel industry, Levi’s differentiates itself from all other competitors through the ability to brand products through strong brand image. According to Levi’s website, the company markets its products under leading brand names that are among the most successful apparel brands in the world and it is one of the most widely recognized brands in the history of the apparel industry. Additionally, Levi’s currently has numerous retail locations including 67 company operated stores in 10 countries. The company distributes its products in a wide variety of retail formats around world including franchise stores, company owned stores, specialty stores, chain and mass channel retailer

Brand and product proliferation continues around the world as they and other companies compete through differentiated brands and products targeted for specific consumers, price-points and retail segments. In addition, the ways of marketing these brands are changing to new mediums, challenging the effectiveness of more mass-market approaches such as television advertising.

Is Levi’s Using Cost Leadership Strategy?

Levi’s is a worldwide brand and everyone is well aware of this brand just because of its differentiated product. Levi’s is somehow following cost leadership strategy in this sense they cut the labor cost by outsourcing its stitching section to those countries where labor is cheap. But as far as concern to the quality of their material they can cut cost of it by coming to lower quality but they don’t do this in order to attain their Strong Brand Image differentiates themselves from their competitors.