Question

Levi Strauss & Co. (LS) makes and sells blue jeans, Dockers, and Slates brand name apparel in more than 60 countries. With the onset of regional integration in Europe and Latin America, LS management decided to revise the firm's production and marketing strategies to make them more appropriate for regional, as opposed to national, operations. Based on regional integration changes underway in these areas, and on your understanding of the business implications of regional integration, what should LS do? In answering , think in terms of LS's major value chain activities, especially production and marketing. What are the pros and cons to LS of producing and marketing its apparel on a regional basis as opposed to a national or global basis? Justify your answer.

Answer 1

The pros to LS of producing and marketing it's apparel on a regional basis as opposed to a national or global basis are as follows:

• Able to match the tastes and preferences of local customers.
• More agile systems to match to consumer demand
• Able to act according to the market conditions, i.e. faster response to changing market trends.
• Able to lure the customers due to regional preferences.
• Higher impact on consumers and comparatively easy market penetration.
• Highly customized marketing and promotional campaigns.

The cons to LS of producing and marketing it's apparel on a regional basis as opposed to a national or global basis are as follows:

• High costs due to different marketing strategies for different localities.
• Production demands for different designs, hence designing costs increase.
• Inventory increase due to region-wise apparel production.
• Operational costs, supply chain management costs rise due to customization.
• Standardization is difficult to obtain.