Levi's now faces a decision on whether to further centralize its advertising management, to fully decentralize it, or to maintain the current system of local management under central direction. The current global advertising policy at Levi's has been to place primary responsibility for advertising in the hands of its regional groups, but with substantial input from corporate headquarters.
Step 2: Justification for Problem Definition
The context in which this policy question arises includes the following factors. Levi's is continuing to expand and diversify its operations on a global scale. For the most recent year reported, American domestic scales were $1.888 billion, while European sales were $526 million, and other international sales were $426 million. International sales thus accounted for almost exactly a third of total sales, a proportion which is expected to continue increasing.
Advertising has been largely, though not entirely, in the hands of local groups, and advertising strategies vary widely; for example, advertising in Britain and Northern Europe stresses the American Wild West mythos, whereas Brazilian advertising stresses a European (especially Parisian) connection. Corporate headquarters has expressed dissatisfaction with the quality of advertising campaigns in Latin America, and eyebrows at headquarters have been raised by the sexually suggestive flavor of European advertising.
In the competitive picture, it should be noted that Blue Bell (Wrangler) has chosen to decentralize its advertising, while Y Confecciones Europeas (Louis jeans) has chosen to adopt a single global campaign. It should be noted, however, that neither case is entirely comparable, Levi's is unique in the strength of its brand name, which for millions of people is synonymous with blue jeans.
Step 3: List Alternative Courses of Action
The alternatives now being considered are to a) more fully decentralize, leaving re...