BENETTON IN THE FAST LANECASE 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.

2

TABLE OF CONTENTS

TOPICS PAGE

a. Introduction …………………………………………………………………..4b. History of the case ………………………………………………………...4c. SWAT analysis …………………………………………………………….…6d. Mission of the organization …………………………………………..…8e. Long-term objective …………………………………………………….…8f. Organizational Strategy

………………………………………………….9g. Production Strategy

…………………………………………………….11h. Marketing Strategy

……………………………………………….……...11i. Human Resource

Strategy………………………………………………11j. Recommendations to the

managements…………………………..12k. Appendix

………………………………………………………………………13

3

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.

4

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.

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

5

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.

6

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.

Marketing improvements are needed in marketing management.

Improvements are needed in Human resource Management.

7

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.

8

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.

9

ORGANIZATIONAL STRATEGY.

Current strategy:

10

CEO

Personnel Finance

BRITIAN GERMANY ITALYPORTUGAL BELGIUMFRANCE

MarketingGovernment

RelationsOffice

Operations

Production Marketing

Domestic Division:

Machinery

Domestic Division:

Tools

Domestic Division: Dyeing

Int. Division

Future strategy:

11

CEO

Personnel Finance

BRITIAN GERMANY ITALYPORTUGAL BELGIUMFRANCE

MarketingGovernment

RelationsLegal Dept

Office Operations

Production Marketing

Domestic Division:

Machinery

Domestic Division:

Tools

Domestic Division: Designing

Domestic Division: Dyeing

Int. Division

USA

PRODUCTION STRATEGY.

Evaluation of performance measures (in particular throughout of the systems)

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.

12

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

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

13

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.

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 standardsGOAL 2: Harmonization of Government policies and strategiesGOAL 3: Development of incentive and support schemesGOAL 4: Availability of information

14