BENETTON IN THE FAST LANE

CASE STUDY ANALYSIS

SUBMITTED TO: SIR AHMED BUTT

SUBJECT: INTERNATIONAL BUSINESS
SUBMITTED BY: ANZAR KHAN
REG NO: 1511106041
PROGRAM: BBA
SEMESTER: IX
ASSIGNED TASK: Analyze the case of Benetton and prepare a
report

ACKNOWLEDGEMENTS

First of all, praise to ALLAH Almighty who has given

me strength and power to complete this report.

Special thanks to our teacher Sir Ahmed Butt, due to

his efforts we are able to go this far and make
this report on the Benetton case study.

Also I would like to acknowledge my classmate who

helped me in this regard.

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 TABLE OF CONTENTS

TOPICS
PAGE

a. Introduction
…………………………………………………………………..4
b. History of the case
………………………………………………………...4
c. SWAT analysis
…………………………………………………………….…6
d. Mission of the organization
…………………………………………..…8
e. Long-term objective
…………………………………………………….…8
f. Organizational Strategy
………………………………………………….9
g. Production Strategy
…………………………………………………….11
h. Marketing Strategy
……………………………………………….……...11
i. Human Resource
Strategy………………………………………………11
j. Recommendations to the
managements…………………………..12
k. Appendix
………………………………………………………………………
13

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INTRODUCTION.

Since the 1980s, the Benetton family has diversified into

several businesses through acquisitions by its holding
company Edizione Holding (Edizione).

These businesses are unrelated to its core business of

clothing and accessories.

The Benetton family entered the areas of sports equipment

through Benetton Sportsystem; food outlets and catering
through Auto grill, motorways construction and management
through Autos trade, the telecom business through Telecom
Italia; and merchant banking and private fund management
through 21 Investments. Some of these acquisitions proved
profitable, while the others lost money for the parent
company. Some of the acquired companies were later sold.

Not only did Benetton lose money through some of these

acquisitions, but it also had to face investigations by the
Italian Competition Authority for anti-competitive practices
and non-compliance with the stipulations regarding
acquisitions.

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HISTORY.

The Benetton family comprised four siblings - Luciano,

Giuliana, Gilberto and Carlo. In the year 1955, they started a
sweater business out of their home in Ponzano Veneto, a
small town 30 kilometers north of Venice, Italy. The business
began with Giuliana knitting the sweaters, but as the
business grew she became responsible for design and
fabrication, and Luciano took up the responsibility of
marketing and sales. Luciano went to England to study a
new technique of dyeing; instead of dyeing the yarn, the
sweaters were dyed after they were made.

That way, the sweaters could be dyed in the colors that were
popular and in fashion. In 1963, the Benettons began
opening their own shops in Italy and created a network of
exclusive distributors using subcontractors. In 1965, the
Benetton Group was established and the first factory was set
up in 1966. This was a true family business, as all four
siblings were involved in various capacities.

While Luciano handled marketing, Guiliana was in charge of

design, Gilberto looked after administration and finance, and
Carlo managed production.

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In 1969, the Benettons opened their first boutique in Paris.
The shop in Paris also did very well with its popular styles,
availability of a wide range of colors and affordable prices.
Following the success of the Benetton outlets, the Benetton
family bought the Villa Minelli4 in 1969, which became the
company's head-office in the mid-1980s. In 1972, Benetton
engaged a publicity agency in Paris, to boost its popularity
further. In 1974, Benetton bought the exclusive rights to use
the name of a popular brand 'Sisley', a French clothing brand
which had been launched in Paris in 1968. However,
Benetton set up the brand as an exclusive line with its own
team of creative and sales staff only in 1985. Sisley was
aimed at the more fashion-conscious and trendy segments.

In the late 1970s, Benetton started sponsoring sports teams.

It sponsored the Trevisse rugby team in 1978 and Tyrell's
Formula One team in 1983. In addition, in 1983, Benetton
launched Tip-Top as its footwear brand.

To manage the increased number of clothing labels it had

introduced as well as its overseas operations the Benetton
family set up Benetton International Holding headquartered
in Luxembourg, in 1985. By this time, Benetton had different
labels for various age groups, all of which were sold under
the brand, United Colors of Benetton. The labels were '0-12'
with pullovers, trousers and shirts for children; 'Merceria'
with pullovers, and shirts mainly for women; 'My Market' with
pullovers and shirts, 'Benetton' with pullovers, trousers and
shirts, and 'Tomato' with pullovers, trousers and shirts for
juniors. In 1985, they bought the Toleman's Formula One
team.

The Benetton family took an important step forward for the

company when they took it public in 1986.

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SWOT ANALYSIS.

The SWOT analysis includes the Opportunities, Threats,

Strengths and Weaknesses.

Strengths:

• Customers are brand loyal.

• Benetton is enjoying competitive edge vis-à-vis
competitors in Italy.
• Benetton is maintaining good company relationship
with labor.
• Benetton is having soundness in financial management.
• Benetton system procedures, structures, processes are
consistent with designed industry standards.

Weaknesses:

• Benetton needs improvement in re-inventing vision,

mission and strategic objective and goals.

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 • Marketing improvements are needed in marketing
management.
Improvements are needed in Human resource Management.

Opportunities:

Economics conditions including all its indicators reflect

positive health of Italy economic conditions.
• Benetton is reasonably equipped to internalize the
social shift.
• Benetton is implementing all the related laws and its
article/clauses.

• Apparently Government policies are supportive towards

industry.
• Benetton is reasonably equipped to maintain the pace
of technological changes.
• International components namely economics, political,
technological, legal exhibit normally in USA.

Threats:

• Italy is experiencing social shift in terms of

customers. Customers are seeking value and they
have become savvy also.
• Legislations are being passed frequently related to
apparel (textile) industry.
• The industry is subject to technological changes and
having a high vulnerability.
• Benetton is facing fierce competition in USA and their
counterparts dominating the market.
• In USA due to cultural diversity customers have
different taste, preferences and they see out
different values from their transactions.

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MISSION OF THE ORGANIZATION.

• Efficiency and customer satisfaction through various

lifestyle products.
• In the lane of the most efficient products providing care
for the customer considering the environmental care as
well.

LONG TERM OBJECTIVES.

• To be globally successful, capturing the global market

and staying there.
• To achieve customer loyalty

• Take responsible for protection of the environment will

be the lead agent and will work to harmonize national
strategies and policies so as to achieve this vision.

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ORGANIZATIONAL STRATEGY.

Current strategy:

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 CEO

Production Marketing Personnel Finance

Domestic
Division: Domestic Domestic
Int.
Machinery Division: Division:
Division
Tools Dyeing

BRITIAN GERMANY PORTUGAL ITALY FRANCE BELGIUM

Office Government
Operations Marketing Relations

Future strategy:

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 CEO

Production Marketing Personnel Finance

Domestic
Division: Domestic Domestic Domestic
Int.
Machinery Division: Division: Division:
Division
Tools Designing Dyeing

BRITIAN GERMANY PORTUGAL ITALY FRANCE BELGIUM USA

Office Government Legal

Operations Marketing Relations Dept

PRODUCTION STRATEGY.

• Evaluation of performance measures (in particular

throughout of the systems)

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 • Optimal control of the production with respect to
appropriate cost functions.
• Adoptions of cross cutting technology related to the
dyeing manufacturing of the apparel.
• Focus on more efficient use of resources.

MARKETING STRATEGY.

• Improving efficient management practices.

• Promoting sustainable development.
• Globally acceptable advertisements as this would
reduce cost, but keeping in mind the different cultures
and perceptions.
• Estimated potential savings for the textile industry can
be made using the results of the facilities that have
adopted the principles most strongly.

HUMAN RESOURCE STRATEGY.

• Particular attention should be given to a number of

programmes including awareness building campaigns,
demonstration projects.
• Encourage dialogue between enterprises and the
communities in which they operate and other
stakeholders.
• Develop workplace-based partnerships and
programmes, including training and education
programmes.
• Provide capacity-building and training to assist relevant
authorities with regard to the implementation of the
initiatives

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RECOMMENDATIONS TO THE MANAGEMENT.

• Identify specific activities, tools, policies, measures and

monitoring and assessment mechanisms.
• Adopt and implement policies and measures aimed at
promoting sustainable patterns of production and
consumption,
• Develop production and consumption policies to
improve the products and services provided, while
reducing environmental and health impacts, using,
where appropriate, science-based approaches, such as
life-cycle analysis;
• Develop awareness-raising programmes on the
importance of sustainable production and consumption
patterns, particularly among youth and the relevant
segments in all countries, especially in developed
countries, through, education, public and consumer
information, advertising and other media, taking into
account local, national and regional cultural values;
• Develop and adopt, where appropriate, on a voluntary
basis, effective, transparent, verifiable, non-misleading
and non-discriminatory consumer information tools to
provide information relating to sustainable consumption
and production, including human health and safety
aspects. These tools should not be used as disguised
trade barriers;
• Increase eco-efficiency, with financial support from all
sources, where mutually agreed, for capacity-building,
technology transfer and exchange of technology with
developing countries and countries with economies in
transition, in cooperation with relevant international
organizations.

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APPENDIX:

Four strategic goals have been identified to overcome the

constraints. Each goal is defined to encapsulate the following
key characteristics:
• Must be completed so as to enable the vision statement to
be reached,
• Necessary to the mission,
• Attainable in the mid-term, i.e., 3-5 years,
• Measurable so that they can be planned, and resourced
• Formulated at situations that will occur in the future
• supported by actions that provide the “how’s” for the
achievement of the objective by the responsible resources
within the target time period.

GOAL 1: Enforcement of appropriate regulatory standards

GOAL 2: Harmonization of Government policies and
strategies
GOAL 3: Development of incentive and support schemes
GOAL 4: Availability of information

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