International Fashion Textiles Marketing - Essay Example

International Fashion and Textile Market Analysis: Levi Strauss & Co. International Fashion and Textile Market Analysis: Levi Strauss & Co. Levi Strauss & Co. is an American fashion and textile privately branded company founded in 1853 and headquartered in San Francisco California. The company operates in the global textile and fashion industry. As on November 2914, the company had 15,000 employees and revenue of $4.8 billion (MarketLine, 2013, p. 3). The company is a designer and marketer of jeans and several casual wear for women, men, and children. The company operates in the Americas, Asia pacific, and Europe. Textile and apparel industry in India The Indian textile sector ranks closely with agriculture. It developed from early manufacturing stages to its current status as one of the largest globally. The textile and clothing industry constitutes over 4 percent of India’s GDP (MarketLine. 2015, p. 4). The Indian market consists of all the menswear, children swear, and women swear. The menswear consists of the casual, essentials, outerwear, and formalwear-occasions. The women swear consist of active wear, essentials, formalwear, and casual wear. The children’s wear consists of both the girls and boys wear such as essentials, formal wear, and active wear for girls. The PESTEL analysis for Indian textile and clothing industry Political: the political stability in India is a good incentive for the Levi Strauss to invest. The political instability will ensure that the manufacturing facilities of the company are safe (MarketLine. 2015, 6). Economic: the Indian economy is among the few economies that were not affected by the 2008/09 great recession. Coupled with the increasing GDP, the consumer power for fashion and textile products is increasing as more disposable income also increases (MarketLine. 2015). Social: the Indian population is increasing steadily and this will increase the market base for textile products. In addition, the Indian people are undergoing a cultural change as they embrace the western culture, and this may include embracing products manufactured by Levi Strauss (MarketLine. 2015). Technological: the Indian market has moved from manual manufacture of clothing to use of high tech machines in designing and manufacturing clothing products. The developed Indian technology will improve Levi Strauss’ efficiency and improve its productivity (MarketLine. 2015). Environmental: the Indian government has strong environmental protection regulations that require companies to produce the minimum carbon dioxide. Going against the environmental regulations negatively affect the company’s image within the market (MarketLine. 2015). Legal: the Indian economy is a highly regulated market with strong tariffs and restrictions for foreign companies for example, the foreign companies are highly taxed and this may interfere with Levi Strauss’ productivity (MarketLine. 2015). Five forces analysis The buyer power is moderate. Small size of buyers who are individual consumers weakens buyer power. However, less loyalty due to negligent switching costs makes them stronger (MarketLine. 2015, p. 14). The supplier power is moderate: the small size of suppliers makes retailers to source from both of them and this weakens the supplier power. However, labor intensiveness of the apparel industry make suppliers of labor stronger (MarketLine. 2015, p. 15). New entrant’s threats are strong. The strong growth of the Indian market is appealing to potential entrants who do not need huge initial capital outlay. Low level of product differentiation plus negligible switching costs makes the industry more competitive and open to new entrants (MarketLine. 2015, p. 16). The threat of substitutes is assessed as weak. The substitutes in this industry involve direct buying from the manufacturers. However, counterfeit products are high and people fear buying counterfeit products, and together with the need for individual or group identity, the substitute threat is weakened (MarketLine. 2015, p. 17). SWOT analysis for Levi Strauss Based on appendix 4, the strengths, weaknesses, opportunities, and threats can be assessed. Strengths: the company has brand portfolio that leads to repeat purchases. In addition, the company has wide operation bases in Europe, America, and asia pacific. The wide network provides a stable customer flow (MarketLine. 2013, p. 3). Lastly, it has multiple distribution channel that increase its ability to penetrate opportunities. Weaknesses: the company has high pension expenses that not only affect its reputation with former employees, but also affects it financial performances. The company also over depends on a few customers for its substantial revenues (MarketLine. 2013, p. 4). Opportunities: the rise in the online retail may provide the company to access wider market base. Also, the growing apparel industry shows that there will be market for the products offered by Levi Strauss & Co. Threats: the increasing competition in the apparel industry may affect the company’s market share and financial performance. In addition, the over dependence of the industry on contractors for the procurement and manufacturing may affect the company’s bargaining power (MarketLine. 2013, p. 6). The value chain analysis The supply chain Appendix 3 illustrates Levi Strauss’ value chain. Levi Strauss & Co. is a vertically integrated company and owns all its factories at every level of production for its products. Levi Strauss’ products are sold in ‘first quality values and off-price channels. There are four customer service centers that receive and distribute the company’s merchandise (Şen, 2008). The value-channel merchandise is moved through a network of over 160 outlet stores and other discount retailers. Value chain and satisfaction Value chain analysis, according to Hoffman (2001, p. 13), refers to the attempts made to establish key organizational activities, their relationships, and how they lead to the creation of core competencies that lead to the production of synergistic benefits. Value chain analysis helps organizations to identify the flow of services and products and the chain between the primary and secondary activities. Azevedo, Pereira, Ferreira and Miguel (2009, p. 59) illustrates that value chain analysis can be sued by a firm to determine where it can capture value for it s customers, and covers the inbound logistics, operations, outbound logistics, the marketing and sales, and service delivery. Marketing channels Levi Strauss uses both direct and indirect marketing channels to distribute its products and reach its customers. Through direct selling to its customers and use of outlet stores, the company always reaches a significant market base. However, the company over relies wholesales to distribute to products ((DataMonitor. 2011, p. 25). Competition There is an intense competition in the apparel and textile industry and this can affect the company’s market shares and sales. The US market is a fragmented market there are large number of players within the US textile and apparel industry and this makes rivalry so intense (DataMonitor. 2011, p. 22). Based on appendix 1, it can be seen that major competitors that Levi Strauss is likely to face in the Indian market include Future Retail Ltd, Lilliput Kidswear limited, Trent limited, and marks &Spencer Group. Marketing mix: 4P’s Products After losing its monopoly during the early 1980s, Levi Strauss & Co. decided increase its product base offering to cover a wide population. The company manufactures high quality jeans for men and other fashionable wears for men, women, and children (MarketLine. 2013, p. 5). The wide range of products offered by the company is meant to capture new markets so that its market share can also increase. Through organic production of jeans, the company differentiated its jeans from the general jeans offered by its competitors. In addition, through the use of copper rivets to reinforce the company’s jeans formed the basis of differentiation from other jeans as cloths made by Levi Strauss Company were normally durable. Pricing strategies Most of Levi Strauss & Co’s prices are wide ranging and affordable prices. Customers who purchase orders of more than $100 can be given free shipping (MarketLine. 2013, p. 3). Students who purchase online are provided with 20 percent discount. In addition, the company offers frequent discounts for its frequent customers. Promotion Levi Strauss is a company that promotes its products through the print and televised media. The televised media is especially important as it reaches a wider market base. With the improvements in social and digital marketing techniques, the organization should take the advantage of emerging social media networks such as YouTube, Facebook, and Twitter to promote and advertise its products (Şen, 2008, p. 581). Place: Levi Strauss & Co. operates in American, European, and Asian markets. The America’s market also includes the north and South American markets (MarketLine. 2013, p. 2). The European market is especially important for Levi Strauss’ products as it includes individuals with great awareness of organic products as well as people who are conscious with high quality products. Conclusion Levi Strauss has already mastered the America’s markets and should now join the Indian market. The growing textile industry India provides a good opportunity for the company. However, the company should be weary of the increasing competition in the industry. The company’s value chain consists of opportunities that can be found in its value chain, marketing mix, and its competitive advantages. The company produces high quality clothes and charges premium for those products. Reference list Abernathy, F. H., Volpe, A., & Weil, D. 2006. ‘The future of the apparel and textile industries: prospects and choices for public and private actors.’ Environment and Planning A, Vol. 38, No. 12, 2207-2238. Azevedo, S., Pereira, M., Ferreira, J., & Miguel, R. 2009. Fashion Marketing & Theory: Chapter 5: Factors That Influence The Clothes’ buying Decision. In Fashion Marketing & Theory (pp. pages-55). DataMonitor. 2011. Global Textiles, Apparel &Luxury Goods. Viewed 29th October, 2015: http://content.ebscohost.com/ContentServer.asp?T=P&P=AN&K=61932013&S=R&D=bth&EbscoContent=dGJyMNLe80SeqLc4zdnyOLCmr02eprdSsKm4TbOWxWXS&ContentCustomer=dGJyMPGntUmxrbRMuePfgeyx44Dt6fIA Doeringer, P., & Crean, S. 2006. ‘Can fast fashion save the US apparel industry?’. Socio-Economic Review, Vol. 4, No. 3, pp. 353-377. Hoffman, K. C. 2001. Levi-Strauss Revamps Value-Channel Supply Chain To Keep Pace With Outlet Shoppers. Global Logistics & Supply Chain Strategies. Viewed 29th October 2015: http://www.supplychainbrain.com/content/industry-verticals/retail/single-article-page/article/levi-strauss-revamps-value-channel-supply-chain-to-keep-pace-with-outlet-shoppers/ Jones, R. 2006. The apparel industry. Wiley-Blackwell. Kilduff, P. 2005. ‘Patterns of strategic adjustment in the US textile and apparel industries since 1979.’ Journal of Fashion Marketing and Management: An International Journal, Vol. 9, No. 2, pp. 180-194. MarketLine. 2013. Levi Strauss & Co. viewed 29th October, 2015: http://content.ebscohost.com/ContentServer.asp?T=P&P=AN&K=91249379&S=R&D=bth&EbscoContent=dGJyMNLe80SeqLc4zdnyOLCmr02ep65SsKq4S7eWxWXS&ContentCustomer=dGJyMPGntUmxrbRMuePfgeyx44Dt6fIA MarketLine. 2015. Apparel Retail in India. Viewed 6th November, 2015: http://eds.a.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=207ddb32-cf76-4955-9e02-cca0e7f103d2%40sessionmgr4004&vid=0&hid=4102 Şen, A. 2008. ‘The US fashion industry: a supply chain review.’ International Journal of Production Economics, Şen, A. 2008.Vol. 114, No. 2, pp. 571-593. Appendices Appendix 1 positional map Appendix 2: positional map Appendix 3: value chain Appendix 4: Read More