MBA642 Project Management Techniques: Levi Jeans Type 1 Assessment 3 Answer
Subject Code: MBA642
Subject Name: Project Initiation, Planning and Execution
Assessment Title: Levi Jeans Type 1
Assessment Type: Individual Report
Project Management as defined in PMBOK is a science and art of managing project. The project management has five processes commonly known as IPECC- Initiating, Planning, Executing, controlling and closing. If the process are not followed properly it can lead to failure of the project (Heldman, Baca, Jansen & Jansen, 2007). The output of one process has to be input to other process.
The report studies a very popular real life project failure, “Levis Jeans” project. Despite having a great brand value and lots of investment and funding the project was big failure. The report identifies the reasons of failure of Levi’s jeans and the lack in project management processes that led to the failure of the product.
The report also mentions the right project management techniques that should have been followed in order to make the project of Levi’s jeans a success.
Background of Levi Strauss & Co
Levi Strauss & Co was founded by Levi Strauss a Bavaria immigrant to San Francisco. Looking into the need of hardworking people he though to design clothes to endure anything and hence manufactured the first denim jeans (Levi.com, 2020). These denims nowadays are known as blue jeans. Back in 1873, the tailor named Jacob Davis started to use copper rivets on the points of strain on pants making them very durable and at the same time differentiating from the competition products.
The Levi’s jeans gradually became very popular and had monopoly in the market. The company reached the sales of $1 billion by 1974. However in 1990s the share of the company fell and the market was dropped to nearly half. All the market campaign of the company were falling apart. The failure of Levi was compared to the failed utopian management experiment. The managers of the company had good intentions and were working towards the expansion of the company but they were not guided by any plan or process. The company was technically sound with knowledgeable people who knew how to make good products, a large retail store chain of 220 stores all over the world but lacked project management and adhere to the customer needs and expectation (Munk, N., n.d.).
What is Project Management
PMBOK (Project Management Body of Knowledge) is a collection of various standards, practices and procedures that can help in completing the projects successfully. PMBOK defines 49 processes for effective project management which has been put across five PMBOK process groups as follows:
Source: (lucidchart.com, 2020)
- Initiation - This phase studies the ultimate goal and results expected from the project and prepares the feasibility study for the plan. A project charter is prepared which synchronizes the stakeholders goals with the goals of the organization/project team.
- Planning – This phase plans the activities that needs to be carried out in order to achieve the goals as identified in the earlier phase. The phase includes the detailed plans of the resources needed, the work breakdown structure and develops a schedule.
- The planned activities in the earlier phase are executed in this phase. The phase involves managing teams, monitoring the time schedules and staying in budget and time frames.
- Monitoring and controlling: As the project progresses there are challenges in execution. This phase tracks the progresses and addresses the challenges. Keeping the goals of the project as the guiding force the activities of the project are re-planned if needed, the cost is reassessed and all the dependent processes are kept on schedule. This is one the most important phases of the project as this might lead to complete change in the project plan and required activities (Rouse, M., 2018).
- Closing: This phase ensures that the desired result from the project is delivered. The phase also identifies the strengths and weaknesses of the organization and lessons that can be learned for future projects.
What went wrong with Levi’s Jeans?
Levi’s Type 1 Jeans was launched in 2002 with a huge marketing budget. The product was very different form the usual jeans cut and design and had exaggerated pocket details and super drak denim finish. Levi claimed it to be the bold fashion jean of the decade (Ireland, Hoskisson & Hitt, 2005). The product was however a failure. Market researchers concluded that the failure was because the product was very expensive as compared to its earlier range with no additional quality to support the high cost. The commercial used to advertise the product was considered to be misguiding for the patrons of the jeans. The needs of the customer were not taken care off (Bonander, R., 2020).
It was argued that the market was changing and jeans were not only looked up as a necessity abut as fashionable product. Other brands like Calvin Klein, Gloria Vanderbilt and Ralp Lauren revolutionized the product with stylish jeans and keeping the pricing competitive (Ireland, Hoskisson & Hitt, 2005). This new product was too bold for the existing fan following of Levi and failed to appeal the prospective customers. Thus turning out to be complete failure.
Factors leading to failure of Levi
The problems that led to failure of Levis Jeans can be stated as follows:
- Lack of identification of the desired results of the project – the customers’ needs were not taken care off. There was change in the need and demand of the consumers and the company was completely unaware of this (Espen, H., 1999)
- Lack of scope definition and hence planning of the project – what was expected form the product and how to achieve it was not defined
- Lack of stakeholders’ management – feedback from the stakeholders was not taken. Also their stakes were not identified
- Lack of clear leadership – decision making was not limited to the project manager. In fact there was no project manager. Bob Haas, the then CEO of the company had the tendency to involve everyone into decision making and therefore there was no consensus on decisions and no one to lead the group.
Lack of Project Management At Levi’s
From the project management perspective there was lack of proper project management at Levi Straus & Co that led to the failure of its product and the company in late 1990 and early 2000. The failure in effective project management can be identified as follows:
- Project outcome not defined: The first phase in IPECC of PMBOK requires that before initiating a project the outcome of the project must be clearly defined and the stakeholders should be clearly identified (Roseke, B., 2017).While launching it Type 1 jeans Levi did not consider the target audience and their demands. There was being observed that change in fashion and styling of people. People were looking for more fashionable and comfortable products in jeans. Levi however was struck to its durability and tough product rather than comfort. Thus the project stakeholders were not clearly identified and their needs were not transformed into the output of the project.
- Lack of project planning: The feasibility study of the project of Type 1 jeans was not performed properly. The advertising budget, the pricing of the product were not competitive in the market and the project was highly over budgeted.
- Lack of project control: the agile technologies in project management require that the final outcome is composed of several iterations. In this method while executing the project the intermediate product is put to test for the desired results of the project. If the product is not suitable relevant changes are made in the product until it is as per the desired outcome (apm.org.uk, 2020). In case of Levi’s the company produced huge quantities of the product and put it across all its outlets without out taking into consideration the initial response of the customers. As the result there were large quantities of the Type 1 jeans at all the outlets for which there were no takers. As the result the company has to withdraw it’s product line later suffering huge losses.
Project Management Approach to make Levi’s Successful
The adherence to the project management steps and processes as laid down under the IPECC phases of the PMBOK can lead to success of Levi’s in the following way:
- Project initiation: Levi’s should initiate the project by clearly identifying its customers as the stakeholders and their needs. It is not necessary to meet the demands of all the customers available in the market. Thus the scope of the project should be defined. The company should identify the customers it needs to cater and define their requirements very specifically. Unlimited scope by trying to meet the needs of the customers is not possible and hence should be avoided. Levi’s has loyal customers who prefer the product for its quality and durability over its style and hence make it’s a niche product.
- Project Planning: The planning of the project like the budget, schedule and activities should be planned in detail along with the feasibility study of the project. Spending too much on advertisement and producing large qualities initially was a planning problem in Levi’s.
- Project execution: The project should be executed according to the plan and the plan should be improvised for the challenges and changes in the environment. When launching a new product Levi’s should initially produce limited number of products and see the response of customers to them. Must put in use agile project management technique (theguardian.com, 2020).
- Project control: the project activities should be controlled and managed for any undesirable outcomes. When Levis observed that the products has little takers it should change the style and design on the basis of the feedback given by the customers. They should work on their strengths and release the activities that are not profitable (Bain, M., 2018).
- Closure: The project when closed should ensure the product is liked by the customers and the lessons are learned from mistakes so that they are not repeated.
Project management is a blend of art and science. PMBOK defined the standards and processes that are helpful in project management but every project is unique and no set of processes can ensure the success of the project. The personal skill of project manager is required to make decisions and identify the strategy that will work for a project. Where a planned management of a project can lead to unprecedented success, the lack of proper plan and preparedness can lead to failure of projects. The organizations though should never miss to learn lessons from the failed projects and avoid the similar mistakes in future projects.
Levi’s is the best example of this, the company enjoyed monopoly and huge market share till mid-nineties when it had a decade full of failure due to wrong production of product and unplanned decisions. However the company learned from its mistakes and soon revived as the market leader in Jeans by 2010.