Harvard Case - Levi Strauss Japan K.K.
"Levi Strauss Japan K.K." Harvard business case study is written by David B. Montgomery, Elizabeth Carducci, Akiko Horikawa. It deals with the challenges in the field of Marketing. The case study is 37 page(s) long and it was first published on : May 11, 1994
At Fern Fort University, we recommend Levi Strauss Japan K.K. (LSJ) adopt a multi-pronged strategy to revitalize its brand in Japan. This involves a renewed focus on brand positioning, product innovation, and digital marketing, while leveraging its strong heritage and customer relationships to drive growth. This strategy aims to re-engage younger consumers, attract new demographics, and solidify LSJ's position as a leading denim brand in the Japanese market.
2. Background
Levi Strauss Japan K.K. (LSJ) faced a declining market share in the Japanese denim market, particularly among younger consumers. The brand's image had become outdated, and it struggled to compete with fast-fashion retailers and emerging local brands. LSJ's traditional marketing approach, heavily reliant on print advertising and department stores, failed to resonate with the digitally savvy youth.
The case study focuses on the efforts of LSJ's new CEO, Mr. Iwai, who aimed to revitalize the brand by introducing new products, expanding distribution channels, and adopting digital marketing strategies.
3. Analysis of the Case Study
To analyze the case, we employ the following frameworks:
1. SWOT Analysis:
- Strengths: Strong brand heritage, established distribution network, loyal customer base, global brand recognition.
- Weaknesses: Outdated brand image, limited appeal to younger consumers, reliance on traditional marketing, slow product innovation cycle.
- Opportunities: Growing demand for premium denim, increasing online shopping, digital marketing opportunities, potential to tap into new demographics.
- Threats: Competition from fast-fashion retailers, changing consumer preferences, economic fluctuations, rising raw material costs.
2. Porter's Five Forces:
- Threat of New Entrants: High, due to low barriers to entry in the fast-fashion industry.
- Bargaining Power of Buyers: High, due to numerous choices and price sensitivity.
- Bargaining Power of Suppliers: Moderate, as LSJ has established relationships with suppliers but faces potential price increases.
- Threat of Substitutes: High, with alternatives like synthetic fabrics and other clothing styles.
- Rivalry Among Existing Competitors: High, with numerous local and international brands vying for market share.
3. Consumer Behavior Analysis:
- Target Market: Younger consumers (18-35 years old) with a strong interest in fashion, social media, and online shopping.
- Motivations: Desire for unique and stylish clothing, brand authenticity, value for money, social acceptance.
- Influences: Social media, celebrity endorsements, online reviews, peer recommendations.
4. Competitive Analysis:
- Direct Competitors: Fast-fashion retailers (Uniqlo, H&M), local denim brands (Edwin, Momotaro Jeans), premium brands (A.P.C., Acne Studios).
- Competitive Advantage: LSJ can differentiate itself through its heritage, quality, sustainability initiatives, and global brand recognition.
4. Recommendations
Redefine Brand Positioning: Shift from a traditional, mass-market brand to a more contemporary, aspirational brand that resonates with younger consumers. This involves:
- Modernizing the Brand Image: Reimagine the iconic Levi's logo and branding elements with a fresh, modern aesthetic.
- Highlighting Heritage and Authenticity: Emphasize the brand's long history and commitment to quality craftsmanship.
- Embracing Sustainability: Promote LSJ's ethical and sustainable practices, appealing to environmentally conscious consumers.
Product Innovation and Development:
- Expand Product Range: Introduce new, trendy styles and fits catering to diverse tastes and body types.
- Collaborate with Influencers and Designers: Partner with fashion icons and emerging designers to create limited-edition collections and generate buzz.
- Leverage Technology: Utilize AI and machine learning to analyze consumer trends and predict future demands, guiding product development decisions.
Digital Marketing Strategy:
- Invest in Social Media Marketing: Create engaging content, run targeted advertising campaigns, and leverage influencers to reach younger audiences.
- Develop a Strong Online Presence: Optimize website for search engines, enhance user experience, and offer seamless online shopping.
- Utilize Digital Marketing Channels: Explore email marketing, content marketing, and influencer marketing to build brand awareness and drive sales.
Optimize Distribution Channels:
- Expand Online Sales: Partner with online retailers and marketplaces to reach a broader audience.
- Revamp Retail Experience: Create interactive and engaging in-store experiences that encourage customer engagement.
- Develop an Omni-channel Strategy: Integrate online and offline channels to provide a seamless customer journey.
Customer Relationship Management (CRM):
- Build a Loyalty Program: Reward loyal customers with exclusive offers, personalized experiences, and early access to new products.
- Collect Customer Data: Utilize data analytics to understand customer preferences and personalize marketing messages.
- Provide Excellent Customer Service: Offer responsive and helpful customer support across all channels.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: LSJ's core competencies lie in its iconic brand, global reach, and commitment to quality. The recommendations align with the company's mission to create timeless and durable clothing while adapting to evolving consumer preferences.
- External Customers and Internal Clients: The recommendations cater to the needs of younger consumers while empowering internal teams to embrace innovation and digital marketing.
- Competitors: The recommendations address the competitive landscape by focusing on differentiation through brand positioning, product innovation, and digital marketing.
- Attractiveness: The recommendations are expected to increase brand awareness, drive sales, and improve profitability by attracting new customers and retaining existing ones.
6. Conclusion
By embracing a modern approach to brand positioning, product development, and digital marketing, LSJ can regain its relevance in the Japanese denim market. The recommendations aim to revitalize the brand, attract younger consumers, and solidify LSJ's position as a leader in the denim industry.
7. Discussion
- Alternative Strategies: LSJ could consider a more aggressive price-cutting strategy to compete with fast-fashion retailers. However, this could damage the brand's image and profitability.
- Risks and Key Assumptions: The success of the recommendations depends on the effectiveness of brand repositioning, the ability to innovate and respond to changing consumer preferences, and the successful implementation of digital marketing strategies.
- Options Grid: A comprehensive options grid can be developed to evaluate the potential impact of different strategies on various key performance indicators (KPIs), such as sales, market share, brand awareness, and customer satisfaction.
8. Next Steps
- Phase 1 (Short-Term): Implement a pilot program to test the effectiveness of the proposed marketing strategies.
- Phase 2 (Mid-Term): Based on the pilot program results, refine and scale up the strategies.
- Phase 3 (Long-Term): Continuously monitor market trends, adapt strategies, and invest in ongoing product innovation and digital marketing initiatives.
By taking these steps, LSJ can successfully navigate the evolving denim market and achieve sustainable growth in Japan.
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Case Description
As a result of a coordinated strategy to establish Levi's as the original, premium American jean, Levi Strauss Japan K.K. has become the leader in Japan. Japan's jeans market is changing: the market is contracting, competition is increasing, and structural changes are occurring in the distribution channel. The issue for Levi is to develop a strategy for success given these changes in Japan.
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