Levi strauss & Co. Market Failures
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Transcript of Levi strauss & Co. Market Failures
L e v i S t r a u s s& C o .
Market Failures
Levi Strauss & Co.Wicked Problem
COMPLACENCY
Underestimated theCompetition
Product Design Failure to Meet
NicheMarkets/Trends
Complacency
LS&Co.'s Market failures
Levi is rated in the top5 of Most American
Brands... Yet LS&Co.outsources 95% of its
products
IMPERFECT COMPETITION
1 2 3Fast Fashion Retailers
and Premium DenimLines have been
"chipping away" atLS&Co.'s market
dominance
FALLACIES FACTS PRODUCTS
No longermonopolized thedenim market...
Private OwnershipEnforced
Complacency
Levi's vs Main CompetitorsReturn on Assets Ratio
LEVI'S LIFE CYCLEASSESSMENT
CARE TAG FOR THE PLANET IN-STORE PROMOTION
LS&Co. Created the FirstApparel Industry LifeCycle Assessment The Study Showed ThatMost Water Use HappensDuring the ConsumerCare Stage
Levi's Study Has Shiftedthe Blame of theCompany Being Wastefulto the Consumer
LS&Co. Heavily PromotesSustainability Through TheirOnline Presence and CareTag Initiative... However, LS&Co.'s Instore WaterLessItems are not asHeavily Promoted -Consumer Expected toInquire About theWater:Less Products.
INFORMATION ASYMMETRY
Men's Wear Accounts for75% of LS&Co.'s Business.Leaving the Women's LineVulnerable to an Already
Overcrowded Market
OPPORTUNITY COSTS
CONSUMER Design
LS&Co. Men'sSales
"Focus on innovativeproducts and initiatives
is great, but they'vefailed to meet the basic
consumer needs."
Slow Response toTrends
Failure to MeetNiche Markets
NEEDS OF DIFFERENT GROUPS
“The averageconsumer’s closet is
composed of around 7to 8% denim, if you
could just snapshotthe value… That
means by definitionthat more than 90% is
not denim”
Failure to Respond toConsumer Feedback
and Trends.Private Ownership
Allows forComplacency and
Slow Growth
CONSUMERS CONSEQUENCES
PRODUCERS/MEDIATORS CONSEQUENCES
Continuous RevenueLoss
Problems StayingRelevant and Trendy toNew Market Segments
STRENGTHS1. Authentic "American"
Branding
2.Pioneered the Denim
Industry
3. Wide Range
Distribution Channels
and Global Outsourcing
OPPORTUNITIES 1. Entry into the
"Athleisure" Market
2. New Emerging Global
Markets
3. Incorporate Stretch
into the Women's Line
WEAKNESSES1. Slow Response to
Trends
2. Increased
Competition of Niche
Markets
3. Slow Growth Rate
SWOTANALYSIS
THREATS1. Fast Changing
Consumer Tastes
2. Increased
Competition
3. Product
Substitution