South-Western - Management  
Trying for Turnaround: Ailing Levi Strauss Refits U.S. Strategy
Topic Strategy
Key Words strategy, advertising
InfoTrac Reference none
News Story

Levi Strauss & Co. has seen sales fall $2.9 billion over the last 5 years. The new CEO, Robert Hanson, feels that the company needs to rebuild the brand icon, and is doing that with a new advertising approach that includes edgier ads and tie-ins to music sponsorships. Hanson is also fixing Levi's distribution and inventory problems.

Levi has been a very traditional company in the past, both in its approach to marketing and in its corporate culture. Its new campaign for low-cut jeans, headlined "Dangerously Low," is a break in its previously wholesome approach.

The company is also attempting to get its costs in line by closing factories. Still, it faces stiff competition from designer, retail private-label and boutique brands.

Questions
1.

In the last paragraph of this article, Marc Andreessen states, "A business strategy that alienates your customer base isn't a good strategy. The most productive way to solve the problem is to satisfy demand." Explain how the music industry's strategy is alienating its customer base. What do you believe is a better strategy?

2.

Define competitive inertia, and explain how the music industry is a victim of this.

Source Alice Z. Cuneo, "Trying for Turnaround: Ailing Levi Strauss Refits U.S. Strategy," Advertising Age, July 15, 2002, p. 12.
Instructor Discussion Notes Discussion Notes
These notes are restricted to qualified instructors only. Register for free!

Return to the Strategy Index

©2003  South-Western.  All Rights Reserved     |