Levi Strauss and Co

question 25

Essay

Levi Strauss and Co., maker of Levi's familiar 501 and 505 brands of jeans, also makes a "Signature" brand that was introduced several years ago for discount retailers such as Walmart. Levi's strategy with the new jeans was to sell a competitively priced pair. The jeans were to be about one-half the price of the familiar 501 and 505 jeans. To get costs down Levi would:
∙ Use cheaper fabrics and materials.
∙ Shun costly mass-market advertising.
∙ Strictly limit the number of fits, styles, and colors.
The Signature brand had a good first year of sales; assume that results for the second year and later are not yet in.
Required:
a. Assess the new strategy at Levi. What do you think are the potential benefits and risks?
b. How will the firm's value chain and balanced scorecard change as a result of the new strategy?

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any prior learning.

Partial Conditioner

An agent or factor that has a conditional effect, contributing to an outcome only in certain contexts or situations.

Unconditioned Responses

Automatic, natural reactions to stimuli that occur without prior learning or conditioning, such as reflex actions.