How Levi's Jeans Got Into Wal-Mart: By: Jackie Hillhouse

How Levi’s Jeans Got into
Wal-Mart
By: Jackie Hillhouse
Levi’s Jeans History
Levi’s Jeans is a privately held clothing company
known for their denim jeans
Founded in 1853 by Levi Strauss
Began producing denim overalls
 Modern jeans were not produced until 1920’s
Levi’s headquarters are in San Francisco
 Company employs approximately 10,500 people worldwide
Recognized as an American icon
 James Dean and Marilyn Monroe
Levi’s Missed the Trend
Baggy Jeans trend in the mid- 1990’s
Sales plummeted from $7.1 billion in 1996 to $4.1

billion in 2003
U.S. Market share dropped from 18.7 percent in 1997 to

12 percent in 2003
Analyzing and Responding
Fashion-conscious buyers wanted high priced brands
Blue Cult, Juicy, and Seven
Parents wanted low priced jeans for their kids

Wrangler and Lee (Cost about $10 less than Levi’s)
Found at Wal-Mart, Target, and T.J. Maxx
Analyzing and Responding (cont.)
CEO Philip A. Marineau came to Levi’s from PepsiCo
in 1999
Had helped PepsiCo surpass Coca-Cola in sales for the
first time
Marineau recruited David Bergen in 2000 from
Carstation.com
Experience in clothing , retailing, and manufacturing
The Gap and Esprit de Corps in the 1980’s
Wal-Mart Requirements
Becoming one of Wal-Mart’s 30,000 suppliers was not
easy
Wal-Mart requires up-to-date IT systems to manage

the supply chain
Wal-Mart has strict supply chain management system

requirements
Joining Wal-Mart
Wal-Mart’s requirements presented Levi’s with a
serious hurdle
Supply chain management systems were in bad shape
Could not track where products were moving in the
supply chain
Bergen created a cross-functional team of key
managers
Created network upgrades, modifications to ordering
and logistics applications, and data warehouse
improvements
Joining Wal-Mart (cont.)
Transformation of Levi’s supply chain management
allowed them to partner with Wal-Mart
Levi’s Jeans sells their signature line at Wal-Mart

Sells for around $23 and has fewer details than other
lines
Questions
1.) Explain how Levi’s achieved business success through the
use of information, information technology, and people.
 Cross-Functional Team of key managers
 Sales up in the third and fourth quarter of 2003, first time
since 1996
 Digital Dashboard
 Lets executives see the status of a product as it moves from
factory floor to distribution centers to retail stores
 Alerts executives of trends
Questions
2.) Using Porter’s five forces model, analyze Levi’s buyer
power and supplier power. Which of Porter’s five forces did
Levi’s address through the implementation of it’s updated
supply chain management system?
 Levi’s buyer power is high because buyers have many choices for
jeans
 Levi’s supplier power is low
 Rivalry among existing competitors
Questions
3.) Which of the three generic strategies is the company
following?
 Broad Cost Leadership strategy
 Wal-Mart
 Reduced price and features
 Appeals to a large audience
Questions
4.) Evaluate how Levi’s Jeans can gain business intelligence
through the implementation of a customer relationship
management system.
 CRM system tracks all interactions between the customer and
the organization
 Get more out of established customers
 Collects and organizes data about customers and analyze data
for future opportunities
 Target customer development efforts
Questions
5.) How can Levi’s use efficiency IT metrics and effectiveness
IT metrics to improve it’s business?
 Efficiency:
 Using least amount of resources
 Ensure information accuracy
 Effectiveness:
 Achieving goals
 Increase Customer Satisfaction
Questions
6.) David Bergen, Levi’s CIO, put together a cross-functional team from
IT, finance, and sales to transform the company’s systems to meet Wal-
Mart’s requirements. Analyze the relationships between these three
business areas and determine why Bergen chose them to be a part of
his cross-functional team.
 IT, Finance, and Sales need a strong relationship
 Communication, Strategic thinking, and must understand how each
department works so that they can improve their business
 Chose these areas because they needed the most improvements
Questions
7.) Predict what might happen to Wal-Mart’s business if
it failed to secure its partner’s information and all sales
information for all products was accidently posted to
an anonymous Web site.
 Expose prices
 Sued by the partners for not keeping information private
 Partners might go out of business
 Pay penalties to partners and could risk their business
Current Information
In July 2008, Levi’s second quarter net profits were
down 98% on last year
Struggling to boost sales
Wal-Mart is cutting back on Levi’s inventory

Works Cited
Cook, Rick. Five Reasons why CRM is even more important during a recession. 25 Aug. 2008. 11
Mar. 2009 <http://www.insidecrm.com/features/crm-important-recession-082508/>.
Doyle, Leonard. Levi's Profits plunges. 10 July 2008. The Independent. 11 Mar. 2009
<http://www.independent.co.uk/news/business/news/levis-profit-plunges-98-per-cent-as-
young-shun-its-jeans-863998.html>.
Levi Strauss & Co. Wikipedia. 11 Mar. 2009 <http://en.wikipedia.org/wiki/Levi%27s>.
Levi's Profits Slump. 9 July 2008. BBC News. 11 Mar. 2009
<http://news.bbc.co.uk/2/hi/business/7497076.stm>.
Questions?

How Levi's Jeans Got Into Wal-Mart: By: Jackie Hillhouse

Uploaded by

Copyright:

Available Formats

How Levi's Jeans Got Into Wal-Mart: By: Jackie Hillhouse

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

How Levi's Jeans Got Into Wal-Mart: By: Jackie Hillhouse

Uploaded by

Copyright:

Available Formats

How did Levi's achieve business success through the use of information, information technology, and people?

Using Porter's five forces model, analyze Levi's buyer power and supplier power. Which of Porter's five forces did Levi's address through the implementation of it's updated supply chain management system?

How Levi’s Jeans Got into

Sales plummeted from $7.1 billion in 1996 to $4.1

U.S. Market share dropped from 18.7 percent in 1997 to

Parents wanted low priced jeans for their kids

Wal-Mart requires up-to-date IT systems to manage

Wal-Mart has strict supply chain management system

Levi’s Jeans sells their signature line at Wal-Mart

Struggling to boost sales

Wal-Mart is cutting back on Levi’s inventory

Mar. 2009 <http://www.insidecrm.com/features/crm-important-recession-082508/>.

Levi Strauss & Co. Wikipedia. 11 Mar. 2009 <http://en.wikipedia.org/wiki/Levi%27s>.

Levi's Profits Slump. 9 July 2008. BBC News. 11 Mar. 2009

You might also like