intercultural management - case study: levi strauss and company: no longer made in usa
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Intercultural Management - Case Study: Levi Strauss and Company: No Longer Made In USATRANSCRIPT
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No Longer “Made in the USA”
Member:1. Nguyen Danh Ha2. Vuong Tat Khang3. Le Minh Quan
Instructor:Prof. Dr. CK.Kwai
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Agenda
1. Summary of the case2. Identification of issues3. Recommendations
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Levi Strauss & Company (LS&C)
Founded in San Franciscoby Bavarian immigrant Levi Strauss in 1853.
Developed, and set the standard for denim jeans for over 130 years.
An American Icon
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$68
Jacob Davis
Levi Strauss
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Levi Strauss & Company (LS&C)
Originality
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Levi Strauss & Company (LS&C)
Premier clothing supplier for
American youth
Sells products in over 100
countries
Proudly manufactures
clothing in the US
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Levi Strauss & Company (LS&C)
Cheaper products from competitors Suffered in decreasing in sales and earnings.
Golden time has passed
Recapture the loyalty of youth
market
Reduce cost by outsourcing
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Levi Strauss & Company (LS&C)
2003End all North American production
Facing the Fact
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Assumptions
The change of Levi causes the
encourage other US companies to
follow.
Closing manufactures in US and outsource its manufacturing outside
the use damaged its reputation.
LS&C is an American icon.
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Outsourcing the manufacturingNo LS&C plant in US
Structural
• The situation has changed! • Gap, Guess and Ralph Lauren…
have long farmed out production overseas.
Change the structure to fit the situation!
“A business needs to be profitable”-- Levi’s spokesperson
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Outsourcing the manufacturingNo LS&C plant in US
Structural Reduce cost by outsourcing the manufacturing
Recapture the loyalty of the youth market.
Cut ~2000 jobs in North America
Close 2 remaining U.S. plants
Outsourcing to cheaper contract factories in Asia and Latin America
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“America’s 50 Best Companies for Minorities”
Close all local plantsCut jobs
?!?
Empathy, originality, integrity, and courage
US is important market for sales
Ethic conflict?
Outsourcing the manufacturingNo LS&C plant in US
Structural
“Excellence in Ethics”
“Community Involvement Teams”
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Focus on product design and marketing
Outsourcing the manufacturingNo LS&C plant in US
Free resources previously devoted to manufacturing
Human Resource
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Outsourcing the manufacturingNo LS&C plant in US
Human Resource
Much lower labor cost
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Outsourcing the manufacturingNo LS&C plant in US
Human Resource
Is the manufacturing techniques of other countries as good as USA?
How about the raising of labor cost?
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Vulnerable to political changes in other parts of the world
Outsourcing the manufacturingNo LS&C plant in US
Political
Not only LS&C but also USA losing ability to manufacture domestically
The suppliers now play an important role
Important positionsales, marketing, design
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Levi’s & Co, an icon of American
Made in …………
Made in ………………
Made in .............
China?!?
Combodia?!?
?!?!?
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Recommendations
To:‒ Reduce the dependency‒ Keep the quality‒ And solve the problem of ethic
Keep manufacturing in
the host and remote countries
Certified Quality Control System1 2
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Conclusion
Outsourcing the manufacturing in Levi’sthe Deindustrialization
• Not a negative phenomenon,
• Natural consequence of further growth in advanced economies.
“the faster growth of productivity in manufacturing
than in services”
Main reason:
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Q&A
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References
• Making sense of Intercultural Collaboration – Allan Bird and Joyce S. Osland
• Case 6: Levi Strauss & Co: No longer “Made in USA”
• http://www.levistrauss.com/about• Bureau of Labor Statistic (http://
www.bls.gov/bls/blswage.htm)
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Presen tation has end
Thank You