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

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. Agenda
1. Summary of the case
2. Identification of issues
3. Recommendations

5. 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

6. $68
Jacob Davis
Levi Strauss

7. Levi Strauss & Company
(LS&C)

8. Levi Strauss & Company
(LS&C)
Premier clothing
supplier for
American youth
Sells products in
over 100
countries
Proudly
manufactures
clothing in the US

9. 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

10. Levi Strauss & Company
(LS&C)
2003
End all North American production
Facing the Fact

11. 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.

12. 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

13. 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

14. “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”

15. Focus on product
design and marketing
Outsourcing the manufacturing
No LS&C plant in US
Free resources
previously devoted to
manufacturing
Human
Resource

16. Outsourcing the manufacturing
No LS&C plant in US
Human
Resource
Much lower labor cost

17. 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?

18. 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

19. Levi’s & Co, an icon of
American
Made in …………
Made in ………………
Made in .............
China?!?
Combodia?!?
?!?!?

20. 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

21. 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:

22. Q&A

23. 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)

24. Presen tation has end
Thank You