It's said that imitation is the sincerest form of flattery, and that mantra holds true in business, as well. When one company draws a roadmap for success, others are sure to try and follow -- except some key ingredient is often missing.

Currently, Nike and Disney are inspiring two companies with small stock prices and big plans. Levi Strauss & Co. (LEVI -1.98%) is following the former's direct-to-consumer (DTC) playbook, while Nintendo (NTDOY -0.88%) is trying to replicate the latter's monetization of kid-friendly intellectual property. If they succeed, those low stock prices could climb. Investors should be encouraged by the similarities so far.

1. Levi Strauss & Co.

For many, buying new clothes has always meant browsing the local department store. That creates two problems for a manufacturer like Levi's. First, it doesn't know who bought its product, why they bought it, whether they had a good experience, or what might make them more likely to buy again.

Selling directly to the customer lets Levi's control the end-to-end customer journey and collect data along the way. All of that information helps it develop a great experience and more targeted and timely marketing in the future. Second, any third-party seller needs to take its cut of the profits. So selling directly to a customer offers a higher share of profits on each sale.

For Levi's, transactions through e-commerce and its brick-and-mortar stores are considered DTC. In 2011, only 22% of revenue was generated through that channel. By early 2021, the number had climbed to 36%, and thanks to continued focus, it's still rising.

It isn't all working out as planned. Higher input costs put a dent in profitability over the past year. But adjusted gross margins are still 1.2 percentage points higher than before the pandemic. 

Chart showing Levi's Direct-to-Consumer sales as a percent of total sales climbing from Q1 2021 through Q1 2023.

Data source: Levi Strauss & Co. Chart by author.

Management is still executing the strategy, despite the challenges. Fears of a consumer-spending slowdown haven't materialized, but there has been a marked shift toward splurging on services like travel over tangible products like clothes and electronics. And inflation remains stubbornly high.

Still, Nike stock has more than doubled since it took the DTC approach in 2017. There's no reason Levi's can't follow the same playbook and achieve the same result. 

2. Nintendo

When most people think of Disney, they think of theme parks across the globe, blockbuster movies, and multiple fictional universes. The company has drawn from those universes to generate content for its streaming network and theaters, helping it outpace the S&P 500 index for much of the past decade.

Nintendo might be a household name, but it's a niche brand, compared to Disney. And despite having a sizable $49 billion market capitalization, its stock trades at about $10. But it's making progress by following the Disney model by leveraging the video game content beloved by multiple generations to expand its entertainment portfolio in the same way as the House of Mouse.

The Super Mario Bros. Movie -- released in April -- has now grossed about $1.3 billion worldwide. That trails only Frozen II on the all-time box-office list for animated films.

Ironically, Disney's digital remaster of 1994's The Lion King doesn't count, even though it brought in $1.66 billion. It was classified as live action, not animated.

In an interview, actor Chris Pratt -- who voices Mario -- seemed to give away that a sequel to the blockbuster is already in the works. That places Nintendo firmly in the category of a kid-friendly entertainment company leveraging its intellectual property for recurring theatrical releases.

Chart showing highest grossing global animated films.

Data source: Nintendo, IMDbPro's Box Office Mojo. Chart by author.

In another similarity, the company partnered with Comcast's Universal Studios Hollywood to open Super Nintendo World. It's only an expanded portion of the existing park, but it adds to the flywheel of parks, products, and movies giving Nintendo multiple points of engagement with its fans.

Of course, the key is the popularity of Nintendo's games and gaming consoles. Those look strong, too. It's 46th Zelda game -- Legend of Zelda: Tears of the Kingdom -- recently set the Guinness World Record for fastest-selling game of all-time and is currently the highest-rated game of the year.

This is remarkable, since Nintendo's Switch gaming console is nearly seven years old. Predictably, sales of the device have been falling. But there are strong indications that Nintendo will launch a new Switch console next spring. That should be even more wind in its sails.

It's an amazing run over just a few weeks with hints of further success in the near future. With the strategy validated and a ton of momentum, it's up to management to execute.