Management News

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

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