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李维斯公司是一家世界领先的品牌服装，他们家的产品销售于世界各地。世界上还没有一家公司能做到像李维斯那样在牛仔裤和休闲裤市场独占鳌头，李维斯旗下的品牌有Dockers（码头工人）和其标志性品牌Levis Strauss Signature （李维斯施特劳斯）。
如今，李维斯已经成长为全球家喻户哓的知名品牌，并在超过160个地区有旗舰店。当下，李维斯也更加追求创新，因为这也是在商业领域成功的至关因素，尤其是在如今全球商业竞争愈发激烈的情况下。
全球贸易的大力发展，通讯工具的发展，进入市场的门槛越来越低，这些因素都给商品和品牌差异化施加了不少压力。想要获得成功，李维斯必须要改变，跟随者时代的发展，在竞争中不断创新。
李维斯在市场中处于什么样的一个位置(使用战略钟来描述它的位置).
战略钟是鲍曼的研究成果，它是另一个检测公司的竞争地位的方法，通过比较竞争对手的产品战略时钟，进一步企业的考虑竞争优势，成本优势和差异化优势。根据(c·鲍曼和d·福克纳的竞争和企业策略——欧文- 1996)介绍，一共有六个核心战略选择,其中一个是Levis的市场定位，这个将在下文谈到。
Levi Strauss & Company is one of the world’s leading brand-name apparel marketers with sales across the world. There is no other company with a equivalent worldwide presence in the jeans and casual pants market. Their market-leading apparel merchandise are sold under the Levi’s, Dockers, and Levis Strauss Signature brands.
Today, the Levis trademark is one of the most globally recognized, and is registered in almost over 160 countries. Now, more than ever, constant and meaningful innovation is vital to their commercial success. The global business environment is intensely competitive.
worldwide trade, instantaneous communications and the effortlessness of market entry are among the forces putting greater pressure on merchandise and brand differentiation. To be successful, it is imperative that Levi Strauss continuously change, competing in new and different ways that are relevant to the changing times.
What position in the market does Levi occupy (using the strategy clock to characterise it’s position)
A strategy clock is based upon the work of Cliff Bowman. It is another suitable way to examine a company’s competitive position by comparing the offerings of competitors The strategy clock allows one to consider competitive advantage in relation to cost advantage or differentiation advantage. (C. Bowman and D. Faulkner ‘Competitive and Corporate Strategy – Irwin – 1996).There a six core strategic options, one of them are where Levi is positioned and this will be shown below.
According to Bowman’s Strategy Clock Levis displays Differentiation with price premium. This means that the company has value to its product and the customers to justify high costs. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products. (Johnson, G & Scholes, K 1997)
The first indication of Levi been this position is that Levis states that they wanted to avoid price-based competition due to their history of brand recognition and brand loyalty to their customers. Therefore Levi created value to the customers by providing them with customised jeans and accustomed the price according to the Levi’s brand which carries enough clout to justify a reasonable price premium. Over the years though it seemed that the brand name lost some importance and it was critical for Levi to create valued features to the customers in order to differentiate them from their competitors.
The cost structure showed that Levi sold their products through wholesale channels which were then distributed by the retailers. Levi also maintained a chain of Original Levi Stores. These two choices allowed Levi’s to be closer to the customers and help them satisfy their needs in the search for the perfect fitted jean. The next factor that indicates the position is that Levi emerged with mass production with the use of emerging communication and computer technologies. The concept allowed Levi to find a niche market and help them create a competitive advantage over the competitors by providing customized made jeans.
Previously it was thought that highly-customized products were expensive to produce, however with information technology Levi was able to meet the customer needs for flexibility and it created a chance for Levi in becoming more economical. Levi found a way to make a mass production and have services delivered due to the technology. Levi was facing a lot of competitors that provided the low-cost and high volume producers, therefore they had an advantage over the company.
The Personal Pair Proposal project allowed a discovery of a niche market and this allowed Levi to create differentiation from its competitors and by adding price premium. Levi wanted to avoid competing against the low-cost volume producers therefore Levi did market research and revealed that only a quarter of women were truly happy with how their jeans fitted them.
This project was a jean customisation program that made it possible to approach the customers with having lower distribution costs and unsold inventory. The mass customised program allowed the costs to be lower as well as provide the differentiation advantage due to the reengineering process of new technologies. Therefore the position of differentiation is providing customers with value, medium prices and high perceived value is created for Levi jeans.
The fact that there is value added with the service. The proposal of a $15 premium and with focused groups suggested that women would consider the price fair due to them finding a superior fit, which competitors have not done yet. Suggestions have been made that a realistically price would be between $5 and $10.
The fact that there is a brand name involved it would not be considered for the premium to be $15 as customers know the quality of the jean that they will be receiving and the knowledge that the jeans are hand sewn. Manufacturing and raw materials will not be affected with the proposal both therefore eliminating unnecessary costs and allowing prices to be reasonable for the customers, which creates more value for differentiation.
How confident are you that the ‘Personal Pair’ project will change the differentiation and low cost trade-off?
Levi’s has a legacy of being very durable and high quality jeans that last at a low cost. Levi is very high quality with a low cost but they somehow are losing favour with their customers. To compete in the always changing market Levi’s might have to enter into a new market which would be high quality with a high price. Therefore with evidence below I am confident to say that the Personal Pair will change the Low cost trade off.
It is almost a must that Levi must change the differentiation and low cost trade-off. This would change Levi’s motto of high quality for a reasonable price, unless they start a new line to compete in the new market. Levi will move to incorporate a focus differentiation strategy where focus is on the higher end of the jeans market, yielding stronger profit margins due to price premium.
The fact that customers expect prices to be higher due to quality the company cannot just reduce the prices even though with mass customisation will be cheaper. The idea of the perceive price has been set in the customers minds and therefore they are willing to pay a higher price for perceived added value to a particular segment, justify a price premium.
Therefore it is vital the company prices the jeans correctly because the particulare market segments is not necessarily price sensitive and is willing to pay a higher amount for a jean that they know is going to fit them perfectly and is made of good quality fabrics. The personal pair proposal approach helps the customers who find a array of choices in the market place overwhelming, and to narrow down their specific needs.
The Personal Pair Project adds extra value and therefore customers perceive the premium price to be high. These customers are approached and are helped to understand what their needs are, and with the offerings of a customized fitting jean it allowed customers to know that Levi is catering for their need which creates customer loyalty and a strong brand name. The actual manufacture products in a just-in-time fashion respond to specific customer request.
What are Levi’s unique resources and core competence?
Resource is any physical or virtual entity of limited availability that needs to be consumed to obtain a benefit from it. (Alexander Osterwalder, 2004) In most cases, commercial or even ethic factors require resource allocation through resource management. (Alexander Osterwalder, 2004) Unique resources are resources that are not easy to copy, incomparable to competitors and create value for the company.
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