The paper "Transnational Strategy of Levi Strauss" describes that Levis is considered a status symbol and commands a premium from European and Asian consumers, where in the U.S. its status has been eroded by the competitors like Calvin Klein and Ralph Lauren, it motivates Levis to sell its products in the global market…
Since Levis is considered a status symbol and commands a premium from European and Asian consumers, wherein the U.S. its status has been eroded by the competitors like Calvin Klein and Ralph Lauren, it motivates Levis to sell its products in the global market.
Levis also has to customize its offering as per local taste as different markets have varied needs in terms of size, color etc i.e. achieve national responsiveness and also has to take advantage of low-cost raw material, production facilities where ever they are available i.e. global integration.
A transnational strategy seeks to achieve high levels of both national responsiveness and global integration simultaneously by overcoming the tradeoff between the conflicting demands of the two pressures (Bartlett and Ghoshal, 1991).
Thus Levis has employed the transnational strategy by allowing its foreign subsidiaries to customize the jeans as per local taste with variety of colors and sizes for greater local/national responsiveness - achieving external flexibility and keeping the production facility centralized, at the most cost-effective places, procuring the raw material from the cheapest suppliers and supplying them throughout and transferring of learning from one market to other markets ensures global integration - the internal efficiency. For example, marketing knowledge learned on Decker’s in the U.S. was transferred to Europe.
An organization’s structure is determined by the strategy it pursues. Levis follows a transnational strategy to achieve its goals, which requires a strategic combination of global standardization and local customization i.e. dynamic flexibility. The centralization/decentralization required by a firm depends on demand for global integration and local responsiveness. ...
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