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Strategic Planning at Br:nr:tton

The Benetton tale began in the 1960s in I taly , when interviews with death-row inmates in North Carolina,
Luciano and Guiliana Benetton began producing col- U.S., was equally Lol1troversial.
orful sweaters in Treviso. Their hand-knitted output
Benetton's trademark efficiency is still apparent, with
was strikingly successful. Ten years later, they built a
a major computer network linking its nine tactories
factory in Ponzano, and in 1968 they fJpened a store
I worldwide with its distributors and retailers. Its trade-
for their sweaters in Paris, France. Today, Benetto!lis
mark supply system was reproduced at Benetton Hun-
a $2 billion company with 7000 stores in 120 co~n-
gary , where the firm coordinated contractors in sevc:n
tries. They are heavily European, with ov~ 70 percent
countries for output into Eastern Europe. But the com-
of sales from that region, with the remainder coming
pany has had its dark moments. Its 600 subcontractors
equally trom the Americas (mainly North America)
are nonunionized. In 1997, a Sicilian subcontractor ,
and other regions. Its major business is its fashion lines
Bronte Jeans, was investigated by the trade unions after
for men, women, and children ("The United Colors of
workforce wages were halved, and allegations that there
Benetton") that accounts for over 60 percent of
were illegal dismissals ofwomen after malTiage. In 1998,
worldwide ~ales. Its current businesses con.~ist of:
a Turkish subcontractor was found to be using child
United Colors of Benetton: Fashion wear, but also in- labor (aged 11-13 years old), and Romanian workers
cludes watches and perfumes (from Europe); dia- were said to work about 250 hours a month to reach
their manufacturing targets and receive the basic wage.
pers (nappies) from the U.S.; condoms (from
Japan); golf/sports bags and equipment But its innovative "try anything" corporate culture
has not lost its spark'. The company has seventy licenses
Playlife: Sportswear
with international companies outside of the apparel
Sisley:Denim garments styled according to latest trends field to produce perfumes, cosmetics, diapers/nappies,
Rollerblade: Global leader in the rollerblade market golf clubs, plates, fluorescent hair dyes, autos (the Re-
nault Benetton Twingo), and colorful telephone
Nordica: World leader in ski boots
pagers. Benetton was the first Western retailer into
Killer Loop: Mainly high-tech snowboarding and Eastern Europe, and its joint venture, Benetton Korea,
snow equipment hopes not only to take advantage ot- the country's low
Prince: A world leader in tennis racquets costs to supply the premium-pricc:d Japanese markct,
but also to be first into the North Korean market.
Benetton's initial successeswere in its fashion gar-
ment area, where its highly efficient supply chain was
linked to its retail stores worldwide and was able to Questions
predict and capitalize on the color-conscious fashion I. Write a mission statement for Benetton that captures
market much faster than other producers. The Benet- the essence of the firm's corporate culture, its target:
ton name and Italy's strong fashion image helped to markets, and its approach to the marketplace.
propel the company to international stardom. The
2. What are Benetton's core competenciesl What:
company also became renowned tor its controversial makes them speciall .
advertising featuring an AIDS victim and his family, a
dead Bosnian fighter in a blood-soaked T-shirt, an oil- 3. Review the company's product and market strategies.
smeared seabird, a nun kissing a priest, and a black What are they doing, and what othe~ products might
woman nursing a white baby. The latest effort, using wnrk for them!

Sources: www.benetton.com. Camuffo, Analdo, Pietro Romano, and Adrea Vinelli. "Back to the Future: Benetton
transforms its global network." MIT S/oan Management Review 43: I (Fall 200 I ): 46-52. Brabbs, Cordelia. "Which of
these ads sells jumpers?" Morl<eting (January 22, 2000). McEvoy, Chris. "The SGB interview: Dennis shafer." Sport-
ing Goods Business (March 8, 1999): 26-29.

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