Company Analysis: United Colors of Benetton

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Company Analysis: United Colors of Benetton

1. Briefly summarize the main features of Benetton’s international strategy.

Benetton’s Philosophy : To bring the network of the Benetton image- a global brand with a distinctly Italian personality- to the most prestigious shopping zones in major world capitals. Benetton believes that in this saturated market the customers already have everything they need and they have to be tempted by design, atmosphere, and by the quality of in-store customer services. A group that strongly believes that customers should have an inspiration for their purchase.

Benetton’s International strategy is based on the above philosophy and it can be broadly classified in four different parts.

1. Innovativeness on the distribution front
➢ International showcase of Benetton’s style and image by opening megastores in the historic and shopping centers of the world’s great cities ➢ Provision of welcoming bar inside stores to relax customers (Hamburg store) ➢ Special recreation area for the young ones(Rome megastore) ➢ Benetton’s entry into the world of net-shopping through ➢ Innovative multicultural environment focussing on creativity, free thought and culture(Bologna mega store) ➢ Opening a megastore where different cultures and traditions meet(Lisbon store)

2. Existing Product Improvement/Responding to the Market Change ➢ Continuous up gradation of the existing products and responding quickly to the changing market has been a key to the success of Benetton. ➢ New products( Benetton’s research wing has been very successful in bringing up innovativeness in their products, as a result 20-25 patents filled per year during 2000-02 period. ➢ Playlife- A brand slogan for the whole sports division meant that Benetton could be a one stop shop for all the sports wear. ➢ Benetton USA( Incorporated current trends into affordable fashions ➢ Hip Site( It was aimed at young people who intend to stand out in the world of teenagers for their spirit and personality, with a complete collection of fashionable clothing, accessories and cosmetics

3. Strategic partnerships & Critical decisions
➢ Benetton Group has never looked back in taking tough decisions, at the same time it has made very strategic partnership from time to time. ➢ Agreement with Sears, one of the major retail sector players in the US( Casual clothing division of Benetton, named Benetton USA, gets access to more than 1000 points of sale in Sear’s stores. ➢ Benetton advertising handed over to Fabrica( Advertising for spring-summer 2001 collection was a major hit, Fabric’s multicultural environment, multimedia projects in Benetton’s international stores were great innovative moves to attract customers. ➢ Benetton sells Benetton Formula one and SAB ( It was an excellent decision because it reflected that the organisation very well knew its limitations and wanted to play accordingly. At the same time it wanted to consolidate on its strength.(the cloths division)

4. International showcase activities
➢ Benetton’s support for the Italian team at the Sydney 2000 Olympics( An ideal international showcase for the Playlife sportswear brand of Benetton ➢ Benetton’s collaboration with UN Volunteers for the International Year of Volunteers( A communication strategy, touching on important issues for a civilized society. (493 words)

2. Examine the financial performance of Benetton between 2000 and 2005, and explain the reasons behind the trends you observe between 2000 and 2005.  You should focus your examination on trends in sales revenue, profits and ROI, and you can use graphs to illustrate the main trends (700 words).

The subsequent paragraphs presents the financial performance of Benetton Group for the 2000-05 period. The analysis is the result of studying Benetton’s ten key parameters over a six year period (2000-05).

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