How Levi’s Jeans Got into

Wal-Mart
 Levi’s Jeans History
• Levi’s Jeans is a privately held clothing company known
for their denim jeans
• Founded in 1853 by Levi Strauss
• Began producing denim overalls
Modern jeans were not produced until 1920’s
• Levi’s headquarters are in San Francisco
Company employs approximately 10,500 people
worldwide
• Recognized as an American icon
James Dean and Marilyn Monroe
 Levi’s Missed The Trend
• Baggy Jeans trend in the mid-1990’s
• Sales plummeted from$7.1 billion in 1996 to
$4.1 billion in 2003
• U.S. Market share dropped from 18.7 percent
in 1997 to 12 percent in 2003
 Analyzing and Responding
• Fashion-conscious buyers wanted high priced
brands
Blue Cut, juicy, and Seven
• Parents wanted low priced jeans for their kids
wrangter and Lee(Cost about $10 less
than Levi’s)
Found at wal-mart, Target, and T.J.maxx
 Analyzing and Responding(cont)
• CEO Philip A.Marineau came to Levi’s from
PepsiCo in 1999
Had helped PepsiCO surpass Coca-Cola in
sales from the first time
• Marineau recruited David Bergen in 2000 from
Carstation.com
Experience in dothing ,retailing, and
manufacturing
The Gap and Esprit de Corps in the 1980’s
 Wal-Mart Requirements
• Becomig one of wal-marts 30,000 suppliers
was not easy
• Wal-Mart requires up to date IT systems to
manage the supply chain
• Wal-Mart has strict supplt chain management
system requirements
 Joining Wal-mart
• Wal-Mart’s requirement presented Levi’s with a
serious hurdle
Supply chain management systems were in
bad shape
Could not track where products were
moving in the supply chain
• Bergen created across functional team of key
managers
Created network upgrads modfications to
ordering improvement
 Joining Wal-mart(cont.)
• Transformation of Levi’s supply chain
management allowed them to partner with
wal-mart
• Levi’s Jeans sells their signature line at Wal-
Mart
Sell for around $23 and has fewer deteils
than other lines
Qn 1.Achievement of Levi’s Strauss by
using SCM
• Supplier power
• Buyer power
• Switching cost
• Threat of new entrants
 Qn.2) What might have happened to Levi
Strauss if its top executives had not supported
investments in SCM ?

• He would have missed a great opportunity in

the clothing industry .
• Selling Levi ‘s jeans through Walmart is one of
the competitive advantage.
 Qn3. David Bergen,Levi CIO put together a cross-functional
team of key managers from IT,finance and sales to transform
Levi’s systems to meet Walmarts requirements .analyze the
relationship between the 3 business areas ?
• There should be excellent collaboration and
cooperation among the employees and
including the 3 departments.
• The use of SCM system should be done by the
managers and the supervisors for strategic
decisions.
Qn4. Describe the 5 basic SCM components in
reference to Walmart’s business model ?