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BENETTON

A CASE STUDY

A case signify that how a company has grabs opportunity areas of improvement and how its implement its strategy to success in business.

• Basic concept.• Core competencies/ competitive advantage• SWOT/ PESTLE Analysis

Introduction

THE COMPANY PROFILEHeadquarters Venice Area, Italy

Industry Apparel & Fashion

Type Public Company

Status Operating

Company Size 9,500 employees

2006 Revenue 1,911 mil [EUR] (8%)

Founded 1965

Website http://www.benetton.com

MISSION

To bring a sense of social responsibility to Benetton's $2 billion-a-year apparel line...

PESTLE AnalysisPolitical• Cemetery Conflict

Economical • neoconservative political philosophy• new post-Fordist production techniques• minimum state intervention

Social • close relations with its local origins by culture activities and sports.

Continue…… Technological• commitment to innovation• communication to IT• research into new materials to integrated logistics

Legal • Non related message

Environmental• recycled packaging• importance of environmentally responsible branding

www.themegallery.com

CASE ANALYSISGlobal network TechnologyBusiness process ReengineeringRelated DiversificationCustomization Globalization

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CORE COMPETENCY

Color makes Benetton unique. Benetton is an international company with a

global brand imageBenetton retains classic designs and saves costs

by avoiding too much varietyThere are strong contractual arrangements

with key suppliers around the world.

core competency

Sophisticated IT systems are utilized in both design and manufacture.

Purchasing is centralized and bulk.Benetton strictly controls the design, layout,

ambience and price in every store.

SWOT ANALYSIS

Strength•Worldwide brand recognition•Successful business model•Successful track record of recent collections.•Efficient and fully industrialized production process

Opportunities •Expansion in emerging Markets•Strong operating leverage•Benefits from USD weakness.•Delocalization of production for basic casual lines •Increased weighting of ‘flash’ collections on total group sales

•Weakness•Brand appeal has declined•No control of commercial Partners•Longer time-to-market vs. pure retailers•Still limited role of retail in group’s business model

Threats•acquisitions in retail•Lower growth vs. its peers•Small size in several markets•Zara entering the Italian market in 2002

Competitive advantage

Assembly line production –

The dyeing garments were manufactured by assembly form of production. This gave a cutting edge to Benetton

Extensive use of IT sophistication –

The use of CAD/CAM in production

The use of robots in the warehouse

United Colors of Benetton Watches

UNIQUE SELLING PROPOSITION(USP)

Perfect use of patent rights & the classic designs gave them a unique place & enhanced their global image.

The blend of colors were the manifestation of their quality & impeccable variety.

CORPORATE VALUES Active and extrovert:

Visible and active in the market and present in word and deed. Guts:

Always on the lookout for opportunities and having the guts to be a trendsetter.

Transparent: Open, honest and always clear in our communication.

Fair: A trustworthy and integer partner, doing business in a conscious and responsible manner

Service minded: Customer oriented, with focus on problem solving.

VALUE CHAIN IN BOUND LOGISTIC OPERATIONS OUT – BOUND

LOGISTICSMARKETING & SALES

SERVICES

SUPPLIES RELATIONSHIP MANAGEMENT

ASSEMBLY LINE PRODUCTION HELPS IN QUICK MANUFACTURING

CENTRAL WAREHOUSING USING ROBORTS

MASS ADVERTISING

GOOD CUSTOMER SERVICE BY ITS FRANCHISEES & RETAILERS

CONTRACTUAL AGREEMENTS IN PRODUCTION

USE OF IT SOPHISTICATION

GOOD STOCK MANAGEMENT & IN TIME STOCK AVAILABILITY

CREATING BRAND EQUITY WITH PUBLICITY

PROVIDE TRENDY & QUALITY PRODUCTS

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WHAT IS BENETTON’S COMPETITIVE STRATEGY?

Benetton's corporate and competitive strategy is designed to convert resource into customer value.

The company is able to achieve this value through innovation in production, information processing and product design

Its competitive and corporate strategy enables Benetton to overcome market restraints

Benetton's competitive strategy enables it to manage the value-added network (links with manufacturers, retailers, suppliers and distributors) in an effective and integrate

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HOW DOES IT ACHIEVE COMPETITIVE ADVANTAGE?

Dying assembled garments to response fashion change.

Take a help of IT to maintain stock quickly.Develop CAD and CAM technology.Warehouse maintain by robots.Excellent Stock management to reduce cost.Innovative design and research regularly.

How does it achieve competitive advantage?

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Broad spectrum of color shadesCentre message by advertisement throughout

the world.Unique Selling Proposition

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HOW DOES BENETTON USE

NETWORKS AND PARTNERSHIP

TO GREAT EFFECT?

www.themegallery.com

Benetton use Exclusive distribution network and having no mediators.

Directly one shipment to 6000 retailers in 83 countries.

Benetton works with 85 agents through worldwide.

All manufactures and retailers directly have IT link with Benetton

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Joint venture with WIDE resultant reduce rationalization

Work with more then 300 subcontractors sake of flexibility in technology, manufacturing, distribution.

Centralized buying in bulk quantity in Australian with various partner

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vertical integration Strong partnership with racing car to create

brand Image

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IN WHAT WAYS WOULD IT BE

DIFFICULT FOR COMPETITORS TO TRY AND COPY THE SUCCESS?

www.themegallery.com

strong relationship with suppliers assembly line productionwith subcontract agreementUSP - color blendhigh brand equityextensive use of IT sophistication

CONCLUSION

The success of Benetton is not a cake walk , it is a consequence of eccentric business strategy, innovative technology Uninterrupted research and integrated ideas, which the Benetton one the best company in world.

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