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Levi's Case

In: Business and Management

Submitted By asad143
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Levi’s Personal Pair Analysis
Introduction:
This Case presents Levi’s Strauss and Co analysis.
In the beginning of 1990s Levi’s stratus was a market leader in women’s jeans
But gradually its market share started shaking off, whereas market research
Shows only 24% of the women is satisfied with their purchase of the standard
Jeans.
Levi’s used to work on push market strategy and now trend was changing and Market was demanding a better fit with more colors and styles.
Operating with only 19 retail store, that was not an enough network linking Levi’s
Factory to their customers to get feedback of their customers. And the whole supply chain was too slow .
Though Strauss was truculent to invest for the improving of the their system to
Enhance the production and supply chain capability and reduce the delay which Was about 8 months from ordering to selling.
Strauss started an experiment in its 4 retails store with collaboration of custom
Clothing Technology Corporation, software firm based in Massachusetts US.
This helped Strauss to get custom measurement of their customers and sort out
The best fittings for their customers and has bar code sewn for reordering same
Fitting of personal pair™.
1) Calculation of PRETAX ROIC FOR BOTH CHANNELS

1. PRETAX ROIC FOR BOTH OF THE CHANNELS.

1) Wholesaler Channel

PRETAX ROIC = Pre Tax Operating Profit /Total Investment

PRETAX ROIC = 20%

2) Original Levi’s Store PRETAX ROIC = PRETAX Operating Profit / Total Investment PRETAX ROIC = 12.24%

As we compare both of the Channels Estimates wholesaler Channel is doing much
Better returns, the higher the ROIC the valuable the division or a company.
Original Levi’s Store’s ROIC even after investing lot on assets and charging a good
Margin is not satisfactory due to capitulating kind of vast…...

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