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Levi Strauss' problems

Levy Strauss & Company, the California gold rush outfitter whose trademark blue jeans have been an American clothing staple for generations, had fallen on hard times by 2004 and needed a change in strategic direction. After seven consecutive years of falling sales, profits turned to losses in 2003. Management responded to the decline by moving its manufacturing plants offshore and by introducing a new line of discount jeans at Wal-Mart. It also considered selling off its Dockers casual pants unit in order to focus on its jeans business. The exercise asks a series of questions in order to complete the case analysis:

(1) What is Levi's problem?
(2) Are outsourcing and introducing lower-priced jeans good strategic decisions?
(3) Should the company sell its Dockers unit?
(4) What should management do to boost sales and profits?

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(2) Are outsourcing and introducing lower-priced jeans good strategic decisions?

Yes, outsourcing and introducing lower priced jeans can be good strategic decisions due to multiple reasons. First of all, outsourcing will significantly boost company's operating margins and will help the company in overcoming huge losses due ot inefficiencies. Similarly, lower priced jeans will help to recapture some part ...

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Levi Strauss' problems

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