Benetton Case Study
CASE STUDY: "Building The Benetton System", Werner Ketelhoehn.Benetton, having been around since 1965 has had some massive changes and events to respond to and so I feel that a timeline of the events since the company was founded to be of significant use.1960's; Development of Lucianos competitive advantage (discussed later).1965 - Benetton was founded and the first factory was opened in Ponzano.1966 - Widening of the existing company-subcontractor relationship.1968 - First Italian store opened in Belluno.1969 - First foreign shop opened in Paris.1970's; The Benetton Group expansion to represent a family of brands which include 012, Sisley and Jeans West.1970 - Hasten expansion by building upon the partnership system developed in Italy.1972 - Revolutionary production system concerning garment dyeing (discussed later).1975 - 'Benetton' logo becomes a well known retail symbol and their product range is expanded to include the 30+ age group.1980's; The growth strategy of Benetton was based around the acquisition of subcontractors and raw material suppliers.1983 - Advertising and sponsorship campaign in preparation for the global launch.
One thing became apparent whilst reading through the case which is the number of things that Benetton do which are seen to be unique to themselves. Benetton now have 5000 shops around the world and there are plans being made to make Rocky Mount (NC) the distribution facility for the US market. 1989 - Benetton have a total of 80 agents (internally known as Centurioni). Finally I will take a brief look at the technological innovation employed at the plant in Castrette. Sport continues to play a key role in Benetton with the sponsorship at Olympic Games, Italian rugby and skiing to name a handful. Automatic packaging and an automated distribution system have meant that efficiency and speed of customer service has improved combined with a reduction in the transport costs. Furthermore, he sort to keep his costs to a minimum (because of the difficulties associated with borrowing) by establishing subcontractor agreements (revisited later) and up-taking employee suggestions, note the example on page three concerning the buying and converting of obsolete machines. The quote I should refer you to here is the one from page 2 of the case; 'what Luciano and Guiliana have invented was a pullover for a season or a year, not a traditional pullover for life'. An automated distribution centre containing a system capable of dividing deliveries into the finest of detail such as individual client is in place. Having said this, it doesn't seem like failure for an agent is an option with the detailed stages Benetton went through to get the right people to be agents. The major agreement to note is the one between the agents and Benetton, with the following quote summing up what I am trying to show, "We are Benetton agents and we are at the disposal of the shop. They have also furthered their controversial image with the art director producing communications posters with images of a dying AIDS patient and a nun kissing a handsome priest. Benetton claimed that there were synergies to be exploited from their diversification following the saturation of the Italian market. Not the stereotypical franchise, a great deal of time and effort went into the selection process for the entrepreneurs - one of the Benetton success factors. Agents, as reward for their commitment and motivation were earning a tidy sum but were greatly encouraged to reinvest the profits for the benefit of Benetton and for the agents.
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