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Intercultural Management - Case Study: Levi Strauss and Company: No Longer Made In USA

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Intercultural Management - Case Study: Levi Strauss and Company: No Longer Made In USA

Published in: Business, News & Politics

Intercultural Management - Case Study: Levi Strauss and Company: No Longer Made In USA

  1. 1. No Longer “Made in the USA” Member: 1. Nguyen Danh Ha 2. Vuong Tat Khang 3. Le Minh Quan Instructor: Prof. Dr. CK.Kwai
  2. 2. Agenda 1. Summary of the case 2. Identification of issues 3. Recommendations
  3. 3. Levi Strauss & Company (LS&C) Founded in San Francisco by Bavarian immigrant Levi Strauss in 1853. Developed, and set the standard for denim jeans for over 130 years. An American Icon
  4. 4. $68 Jacob Davis Levi Strauss
  5. 5. Levi Strauss & Company (LS&C)
  6. 6. Levi Strauss & Company (LS&C) Premier clothing supplier for American youth Sells products in over 100 countries Proudly manufactures clothing in the US
  7. 7. Levi Strauss & Company (LS&C) Cheaper products from competitors  Suffered in decreasing in sales and earnings. Golden time has passed Recapture the loyalty of youth market Reduce cost by outsourcing
  8. 8. Levi Strauss & Company (LS&C) 2003 End all North American production Facing the Fact
  9. 9. Assumptions The change of Levi causes the encourage other US companies to follow. Closing manufactures in US and outsource its manufacturing outside the use damaged its reputation. LS&C is an American icon.
  10. 10. Outsourcing the manufacturing No LS&C plant in US Structural • The situation has changed! • Gap, Guess and Ralph Lauren… have long farmed out production overseas. Change the structure to fit the situation! “A business needs to be profitable” -- Levi’s spokesperson
  11. 11. Outsourcing the manufacturing No LS&C plant in US Structural  Reduce cost by outsourcing the manufacturing  Recapture the loyalty of the youth market. Cut ~2000 jobs in North America Close 2 remaining U.S. plants Outsourcing to cheaper contract factories in Asia and Latin America
  12. 12. “America’s 50 Best Companies for Minorities” Close all local plants Cut jobs ?!? Empathy, originality, integrity, and courage US is important market for sales Ethic conflict? Outsourcing the manufacturing No LS&C plant in US Structural “Excellence in Ethics” “Community Involvement Teams”
  13. 13. Focus on product design and marketing Outsourcing the manufacturing No LS&C plant in US Free resources previously devoted to manufacturing Human Resource
  14. 14. Outsourcing the manufacturing No LS&C plant in US Human Resource Much lower labor cost
  15. 15. Outsourcing the manufacturing No LS&C plant in US Human Resource Is the manufacturin g techniques of other countries as good as USA? How about the raising of labor cost?
  16. 16. Vulnerable to political changes in other parts of the world Outsourcing the manufacturing No LS&C plant in US Political Not only LS&C but also USA losing ability to manufacture domestically The suppliers now play an important role Important position sales, marketing, design
  17. 17. Levi’s & Co, an icon of American Made in ………… Made in ……………… Made in ............. China?!? Combodia?!? ?!?!?
  18. 18. Recommendations To: ‒ Reduce the dependency ‒ Keep the quality ‒ And solve the problem of ethic Keep manufacturing in the host and remote countries Certified Quality Control System 1 2
  19. 19. Conclusion Outsourcing the manufacturing in Levi’s the Deindustrialization • Not a negative phenomenon, • Natural consequence of further growth in advanced economies. “the faster growth of productivity in manufacturing than in services” Main reason:
  20. 20. Q&A
  21. 21. References • Making sense of Intercultural Collaboration – Allan Bird and Joyce S. Osland • Case 6: Levi Strauss & Co: No longer “Made in USA” • http://www.levistrauss.com/about • Bureau of Labor Statistic (http://www.bls.gov/bls/blswage.htm)
  22. 22. Presen tation has end Thank You

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