For the past seven years, jeanswear giant Levi Strauss & Co. has experienced a number of difficulties. Though the Levi brand, according to Scott Malone (10), "continues to hold the leading position in market share for jeans in the U.S., the company's overall revenues for 2002 came in at $4.14 billion, well off the 1996 peak of $7.1 billion." Levi Strauss has in recent months experienced something of a rebound, leading the firm to undertake a number of efforts designed to increase market share and reduce operating expenses.
At the helm of the company is Robert Haas, the chairman and great-great-grand nephew of company founder Levi Strauss (Zellner, 44). Recently, Haas brought in an outsider to run the company, Phil Marineau, a former Pepsi executive, as chief executive officer (Malone, 10). Integral to Haas's strategy was the downsizing of the company's workforce, engaging younger consumers via fresher products, and a marketing program designed to position Levi brand products more favorably.
A number of external and internal factors have directly impacted upon Levi Strauss' poor performance in recent years. Malone (11-12) maintains that a number of rivals have entered into the jeans market with styles that are considered to be more "hip" and trendy and therefore capable of satisfying the preferences of younger consumers. Haas has admitted, says Malone (11), that the company had become inattentive to consumer needs and had become a little too rigid in its practices. Levi Strauss failed to listen to its retailers who complained about inflexible practices, insufficient margins, poor delivery, and high-handed treatment. With difficulties in the distribution chain and changing consumer tastes, Levi Strauss has been forced to recognize that it needed to rethink its market strategy.
Zellner (44) considers the story of Levi Strauss' slide to be a classic case of a powerful brand that has lost its way. In the 1960s, Le...