Restructuring / Turnaround Strategies Case Study

Levi Strauss in the US (Part B): The Great Turnaround Plan

Abstract:

Levi Strauss, the original blue jeans manufacturer, has been steadily losing market share in the US since 1996. When the industry trend was to move manufacturing facilities to developing economies in order to save on labor costs, Levi dragged its feet. It was also said to have been sloppy in terms of keeping up with the latest trends in fashion and hence lost its market leader position to Tommy Hilfiger, VF, Gap… and a whole lot of new entrants in the industry. Part A of the case talks about this phase of Levi, from its birth. The issue here is: “How will Levi stem the decline in its sales and catch up with the industry trends?”

In the 21st century the company has initiated a series of comeback efforts aimed at recapturing its lost glory. Levi’s president and CEO, Phil Marineau, who joined the company in 1999, has engineered ‘The Great LS & Co. Turnaround Plan,’ to revive the company. Part B of the case details these efforts by Levi and tries to answer the questions raised in Part A.

Levi expected 2003, its 150th anniversary year, to be a significant year in the Plan. But due to the declining market, deflating prices and tax return errors, the company suffered a setback in its efforts. Since then it looks like the company is plodding on determinedly on its comeback trail.

Pedagogical Objectives:

• To understand the importance of keeping in pace with the changing trends in business.

Keywords : Branded Apparel Industry; Levi Jeans; Dockers; Levi Strauss Signature; Phil Marineau; Tommy Hilfiger; VF Corporation; The Great Turnaround Plan; The LS & Co. Way; Red Wire DLX Jeans; iPod; Levi's Red Tab; Outsourcing; Restructuring / Turnaround Strategies Case Study; Leadership; Global Sourcing Guidelines