| Name | Levi Strauss & Co. |
| Industry | Clothing/Apparel. |
| Founded | 1853 |
| Headquartered | San Francisco, California, United States. |
| CEO | Charles V. Bergh |
| Revenue | $4,452,609 |
| Profit | -$127,141 |
| Competitors | Calvin Klein, Wrangler, Gap and Carhartt. |
Company Overview:
Levi Strauss & Co, commonly known as Levi’s, was founded in 1853. Levi Strauss was the founder of the company hence the name Levi Strauss & Co. The company deals in manufacturing, promoting, and selling clothing/garments. These products include shorts, skirts, dress pants, jeans, jackets, casual pants, footwear, tops, and accessories. Asia, the Americas, and Europe are the geographical segments through which the company operates. The company was positioned on the 7th rank for the best employers for diversity in 2020 (Forbes, 2021).
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Levi’s Strengths 2021:
- Strong Global Presence.
The company has an abundant amount of retail stores in all its geographical segments. It has 359 retail stores in the Americas, 327 retail stores in Asia and 356 retail stores in Europe (See Figure 1) (Statista, 2021a). Products of Levi’s are available in 110 countries worldwide (Levi’s, 2019). The global footprint of Levi’s is quite impressive. Such a diverse global presence helps the brand create a strong image across the globe.
- Brand Portfolio.
Levi Strauss & Co. manufactures apparel for Denizen, Dockers, Signature, and Levi’s (Levi Strauss & Co., 2021). People admire all these clothing brands that are owned by Levi Strauss & Co. This displays that Levi’s has a strong brand portfolio consisting of well-established brands. - Aligned Marketing with Brand’s Portfolio and Market.
Levi’s keeps up with the trends while marketing its products. The company uses retro songs for its TV advertisements and also has several social media marketing campaigns. The greatest strength in marketing the company is its celebrity endorsements. Levi’s recently joined hands with renowned celebrities like Jaden Smith, Emma Chamberlain, Hailey Bieber, Marcus Rashford, Naomi Osaka, Shai Gilgeous-Alexander, and Barbie Ferreira for its campaign in May 2021 (Levy, 2021). The brand also made Deepika Padukone its global brand ambassador in order to increase sales in India and make the brand more popular or appealing amongst women (Singh, 2021). Such celebrity endorsements are strategic steps carried out by the brand as they will help the brand widen its target market and lead to an increase in sales. - Target Market & Product Under Focus (Jeans).
Blue denim jeans are Levi’s trademark. The brand is globally known for its expertise in the production of jeans. The brand also has a youthful image or front, which is a major strength as its target market is already the young generation. The company also makes active efforts to team up with celebrities who are appealing to the young generation. Both these things build the strong reputation of Levi’s and maintain an image of the brand in front of its target market.
Levi’s Weaknesses 2021:
- Forged Products.
Counterfeiting has always been and will always remain a major challenge of Levi’s. Due to forged products being sold at lower prices become more alluring, and people tend to buy them. This builds a negative image of the brand and also affects its sales (TFL, 2017). - Dependence on Contract Manufacturers.
Almost all Levi’s raw materials and products are sourced from independent contract managers. Dependence on independent contractors for products increases the risk supply chain of the brand. This could limit production and delay delivery times as well. - Over-dependence on few wholesale customers.
A major part of Levi’s revenue comes from the wholesale department. In 2020, the wholesale department generated a total of $2.5 billion, and the direct-to-customer sales generated $1.7 billion. This information is also displayed in the graph below (See Figure 2) (Statista, 2021b). A break in contact with these wholesalers could affect the sales and the profits of Levi’s.
Levi’s Opportunities 2021:
- Lower Cost of Labor.
Asian countries such as India, Nepal, Philippines, Sri Lanka, and Pakistan are quite cheap in terms of labor costs (Jennings, 2017). Levi’s should take advantage of this and expand further in these regions. They could outsource their manufacturing works from these regions. This will lead to low production costs and high profits. - Casual & Western Wear.
Casual wear and western wear are in trend right now. People want to feel comfortable yet classy in the clothes they wear. This presents a great opportunity for Levi’s to develop a line that caters to diverse fashion needs. Levi’s could also collaborate with celebrities known for casual wear and design a fashion line with them. This could help expand Levi’s target market while making the brand all the more popular.
Levi’s Threats 2021:
- Changing Trends.
Due to fast-changing trends in the clothing and apparel industry, Levi’s has to invest a lot of money in designers and R&D to keep up with them. This poses a threat to the company’s profits as if a product does not do well in the market, the sales will be low, and the company will suffer a loss. - Competition & E-commerce Brands.
There is intense competition in the clothing/apparel industry. The greatest competitors of Levi’s are Calvin Klein, Gap, Carhartt, and Wrangler. Other than these competitors, there is also the risk of new entrants and indirect competition from E-commerce brands. As E-commerce has provided brands with a whole new platform to operate their business, Levi’s also faces competition from E-commerce brands. - Lack of Protection Rights.
There are many copyrights protection issues in third-world countries or Asian countries such as China, where Levi’s operates. This makes it harder for brands to sue another company for copying and manufacturing their designs. This is a huge risk for Levi’s as it increases competition and tarnishes the brand’s image and uniqueness.
Levi’s SWOT Analysis Conclusion:
Coming to a conclusion, it can be seen that Levi Strauss & Co. (Levi’s) is a brand that has made a name for itself in the industry. The brand has focused on building its strengths, such as marketing properly to the right target audience and having denim jeans as their trademark. This has made a positive image of Levi’s and has helped them establish a strong reputation. However, weaknesses like product forgery and depending on independent contract managers have limited the brand’s growth in terms of sales. If Levi’s capitalizes on opportunities such as keeping up with the trends in the products it sells and expanding further in regions with cheap labor, it will cut costs and increase the company’s growth. This will help reduce the effects of their weaknesses and minimize the risks of the threats posed to Levi’s.
References:
- Forbes. (2021). Levi Strauss & Co. Forbes.
- Jennings, R. (2017). From India to The Philippines, These Are the Cheapest Countries in Asia. Forbes.
- Levi Strauss & Co. (2021). We are …Fueled by our strong values, creativity and hard work. Levi Strauss & Co.
- Levi’s. (2019). About Levi Strauss & Co. Levi Strauss & Co.
- Levy, M. (2021). From Hailey Bieber to Jaden Smith, These Are the Celebs Making Levi’s 501 Denims Great Again. Harper’s Bazaar.
- Singh, R. (2021). Levi’s ropes in Deepika Padukone as global brand ambassador. Forbes India.
- Statista. (2021a). Retail Sotres Operated by Levi Strauss Worldwide as of 2020, by Geographical Region. Statista.
- Statista. (2021b). Net revenue of Levi Strauss worldwide in 2020, by sales channel. Statista.
- TFL. (2017). New Levi’s Lawsuit Exposes the Ever-Growing Sophistication of Counterfeiters. TFL.
