Benetton group: The evolution of a network to face global competition

Extract

[...] It has managed it more by anticipation than by reaction with a well interpretation and adaptation to overcome the new competition's drivers. Emerging challenges such as globalization and N.I.C.T. lead to radical strategic changes. The increasing cross-country homogenisation of consumers' patterns, lifestyles, and market preferences has made emerge a “Global production demand”. The N.I.C.T. enabled a reduction of information costs, cut-down the geographical barriers and increased the communication for a “real-time” response to market. It also improved the product development and manufacturing processes, enhancing simultaneously the quality, efficiency, effectiveness, and achieving a faster time to market for aggressive market penetration. [...]

[...] Benetton group: The evolution of a network to face global competition Introduction Benetton's story has started in the 1950s from the “idea of color”. The family holding group has been established in 1965. Over the ongoing decade, the first factory and 1000 shops opened worldwide. Benetton has grown through a unique network organisation, flexible and innovative, to stand its successful worldwide famous business model as competitive advantage. Furthermore, it established its worldwide reputation through a brilliant marketing and communication strategy. [...]

[...] Benetton has built its successful development on a direct sales network of small independent retailers worldwide within a “franchise” approach. Then, it tried to readjust its strategy through a progressive vertically downstream integration along the “retail project” It aims to direct monitoring consumers in crucial markets to challenge its major competitors. With medium and large size shops centrally and directly controlled, it can be now closer to the customer and have a better control of its brand image. Hence, it collects market information, and ensures brand visibility. [...]

[...] United Colors of Benetton aims to be global, young, easy (to care/wear/look), and high quality. Implementing huge Megastores in big city, it ensures a better visibility. In term of design and product development process, the market requires to be close to the new trends and changes. To do so, Benetton established an efficient information system interconnecting headquarter with the integrated retail networks. Thus, it gets closer to the customer, and design and produce collections on basis of continuous updated information. [...]

[...] ▪ Operations Management Benetton reorganised the production process in order to: ✓ Cutting costs: manufacturing and logistics (transports and semi- finished good from different company's locations) ✓ Maintain and even enhance the know-how associated ✓ Synergy between casual and sportswear businesses The reorganisation took the form of production concentration in Trevigano plant on the Castrette model. Beside, the labor-intensive production was relocated to low-cost nation producers. The sportswear production control management was also concentrated at the Castrette pole seeking for synergies with the casual wear. ▪ Retail Networks: Previously, the distribution was managed by Benetton Sportsystem European Subsidiaries. Now on, it is incorporated to Benetton group for a commercial and marketing synergy. Thus, it increased the direct control and monitoring of the market, and enabled a closer relation with major customers (world distribution chains). [...]