FEASIBILITY ANALYSIS FOR EXPORTING LEVIS

This paper will reflect the business decisions necessary for establishing a business designed to export Levi's clothing into Canada.

Levi-Strauss & Co. is the world's largest clothing manufacturer with 26,000 employees worldwide and annual sales in the 5 to 7 billion-dollar range. However, in 1997, top management began a belt-tightening campaign designed to shave $80 million in overhead, primarily through a reduction of hourly laborers("Jeans giant. . .", 1997, 13).

Although the company promised cuts across the board, in fact, most of the cuts took place in the American sector where employee hourly costs were considerably higher than the costs in the overseas markets. Recently, many of those job cuts took place in Canada, reflecting what some people call the declining popularity of the Levis image in that nation.

This has resulted in the reduction of North American market share from 30 percent in 1990 to 14% today. As Hoover's Analysis explains, "To undo the financial damage, LS&CO. has moved to close 29 US, Canadian, and European plants" (Hoover's Capsule Data, 1999).

Naturally, before embarking on this venture, it was necessary to determine if a sufficient source of supply could be found to provide the needed Levi's products to export. According to the research uncovered concerning the clothing distribution market in Canada, there is a stro

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oration, if a corporation. D. A commitment to purchase at least $150,000 worth of product at wholesale. (The wholesale price would depend on actual and projected volume. 4. Tariffs and Regulations The United States-Canadian Free Trade Agreement (USCAFTA) is a specific addendum to the NAFTA and eliminates all tariffs and removes or moderates a host of other barriers to the free flow of goods, services, and capital over a 10-year period that started on January 1, 1989. Products were originally divided into three branches according to their perceived readiness for free trade. For the first tranche, covering about 15 percent of all goods traded bilaterally, tariffs were eliminated with the start of the agreement on January 1, 1989. For the second tranche, covering another 35 percent of traded goods and including most machinery, telecommunications equipment, chemicals (excluding drugs and cosmetics), and paper, pulp, and printed matter, duties were to fall in five equal steps between January 1989 and January 1993. For the rest, tariffs are being phased out in 10 equal installments. 5. How to Clear Customs Imported clothing is one of the items that has some restrictional elements, mostly in terms of documentation. Canadia
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Approximate Word count = 1871
Approximate Pages = 7 (250 words per page)