How does Levi Strauss take advantage of the global environment
1) How does Levi Strauss take advantage of the global environment?
Levi Strauss and Company has taken full advantage of the resources available outside of the U.S. to get less expensive materials and labor, acquire more profitable markets, and get new ideas for developing new products.
Levi Straus and Company takes great advantage of the global environment by finding the place in the world where it can get supplies at a lower cost. Cotton, for example, is bought from Texas and converted into denim at El Paso. Once ready, these are sent to be assembled or tailored in the Dominican Republic, the Philippines or other countries were labor is at a lower cost.
At the same time, the company also takes advantage of its reputation in other countries to market its product at a higher price.
It also adapts its products to specific cultures. In Asia, smaller sizes are made for the slimmer body frames of these eastern customers. Color preferences of the European market are also taken into consideration for the products to sell.
It also uses what it learns form the trends in other countries. In Europe, for example, wrinkle-free cotton has gained popularity and the company has decided to develop such products
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Overall, Levi Strauss and Company’s transnational strategy in purchasing, manufacturing, marketing and product development is proving to be successful.
2) What global expansion strategy is the company pursuing?
Levi Strauss and Company is using the transnational strategy to globally expand. It has created a network structure wherein it has made strategic alliances with foreign companies to produce and distribute its products (Gareth, 2006, 235)
Their core competence in design is centralized in the U.S. The main office keeps in contact with these offshore companies to ensure that products are marketable in the specific cultures of these foreign entities. It also makes sure that these companies are aligned with the standards and values of the mother company. Issues such as child labor and illegal salary rates have cause the company to terminate its relations with some foreign manufacturers. Levi Strauss and Company has kept its structure closely aligned with its global strategy.