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Intercultural Management - Case Study: Levi Strauss and Company: No Longer Made In USA
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No Longer “Made in the USA”
Member:1. Nguyen Danh Ha2. Vuong Tat Khang3. Le Minh Quan
Instructor:Prof. Dr. CK.Kwai
Agenda
1. Summary of the case2. Identification of issues3. Recommendations
Levi Strauss & Company (LS&C)
Founded in San Franciscoby Bavarian immigrant Levi Strauss in 1853.
Developed, and set the standard for denim jeans for over 130 years.
An American Icon
$68
Jacob Davis
Levi Strauss
Levi Strauss & Company (LS&C)
Originality
Levi Strauss & Company (LS&C)
Premier clothing supplier for
American youth
Sells products in over 100
countries
Proudly manufactures
clothing in the US
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
Levi Strauss & Company (LS&C)
2003End all North American production
Facing the Fact
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.
Outsourcing the manufacturingNo 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
Outsourcing the manufacturingNo 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
“America’s 50 Best Companies for Minorities”
Close all local plantsCut jobs
?!?
Empathy, originality, integrity, and courage
US is important market for sales
Ethic conflict?
Outsourcing the manufacturingNo LS&C plant in US
Structural
“Excellence in Ethics”
“Community Involvement Teams”
Focus on product design and marketing
Outsourcing the manufacturingNo LS&C plant in US
Free resources previously devoted to manufacturing
Human Resource
Outsourcing the manufacturingNo LS&C plant in US
Human Resource
Much lower labor cost
Outsourcing the manufacturingNo LS&C plant in US
Human Resource
Is the manufacturing techniques of other countries as good as USA?
How about the raising of labor cost?
Vulnerable to political changes in other parts of the world
Outsourcing the manufacturingNo 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 positionsales, marketing, design
Levi’s & Co, an icon of American
Made in …………
Made in ………………
Made in .............
China?!?
Combodia?!?
?!?!?
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 System1 2
Conclusion
Outsourcing the manufacturing in Levi’sthe 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:
Q&A
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)
Presen tation has end
Thank You
