Benetton Group

Résumé du document

The Benetton Group is currently one of the world's largest garment producers and retailers. Its core business, clothing, represents more than 150 million garments every year and is selling in more than 5000 stores all over the world. This strong Italian company was born in the Treviso country in the 1960s with the idea of becoming a multinational company which is now composed of 7,000 employees and with a $2 billion turnover each year. In the 1990s, there was an emerging challenge for the Benetton Company. In fact, the globalization of the market made a cross-country homogenisation of consumers. And a new factor which is very important is that fashion is changing very fast and all clothes companies have to face and adapt to this fast change. In this context of new technological development and internalization of some operational trends, Benetton understood that the company needed a new network to be more reactive in the international market. At the same time Benetton developed a sport equipment and sport wear business.

Extraits

[...] The Benetton sport business was spread all over the world. For example, rollerblades were made in Minnesota and skis were made in Austria. This entire organisation has changed. First of all, they applied a diversification strategy. They have invested 5 million $ in high technology system. The aim was to make product with high technological contents, to face a high demand, that increase every years. On the contrary in the sport clothing business Benetton is trying to offer a very wide Playlife and Killer Loop collections, ranging from the top level to the most economic items, and offering not strictly technological clothing items, but rather items designed to attract a broader spectrum of consumer. [...]

[...] Then, Benetton has relocated some of its suppliers outside contractors abroad. There are headquarters in a lot of countries such as Spain, Hungary and Croatia, that are composed of a or many subsidiaries which coordinates the production activities of a group of SMEs often set up and managed by Benetton's employees. It is a strong upstream integration. Moreover, activities like quality control at entry and on finished goods and cutting out have been transferred to subsidiaries. The process of moving production to international subsidiaries and contractors has increased the integration of communication to coordinate phases in the best way. [...]

[...] Thanks to these delocalisation, it ensure them a real reduction of costs of the production. But an important point is that Benetton's strategy allows it a high control of quality, and moreover, thanks to Benetton's integrated communication, all the information reach more quickly the point. Furthermore, the upstream integration permits to Benetton to have the aviability to access all suppliers networks and to reduce cost of communication. As a conclusion, I would say that the new network of Benetton compared to the conventional is one of the most famous organisations in the world, as the textile market is concerned. [...]

[...] Thanks to that, Benetton is now making 2 million of turnover. As the retail network is concerned for the sport business, the conventional one was made by small specialized shops, directed by retail agents. This wasn't famous. Then, in their new retail network, they decided to enlarge distribution channels and to find special areas dedicated to displaying and selling Benetton's sport equipment brand. Finally, a new specific network of Playlife retail outlets has been chosen by the official supplier for the Italian Olympic team in Australia. [...]

[...] Then, I will compare Benetton group with its main competitors. One of the most important strategies of Benetton has been its strong vertical upstream integration by taking direct control of its main suppliers of wool and cotton what is to say a gain of quality and lead time thanks to a stronger control. The delocalisation in Benetton group is made by the fact that each headquarters or subsidiaries are owned by Benetton employees what make its suppliers less risky. In fact, there is a reduction of risks for its product and for the company. [...]