Camuffo (2001)

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Camuffo (2001) - Benetton

The Benetton Group has 5,500 shops in 120 countries and earns an annual revenue of over $1.8b

Casual wear makes up 74% of its revenue, sportswear, 20% and complementary activities, 6% in 2000

Benetton has a number of methods it employs which contribute to its success.

It has a “tinto-in-capo” strategy, where dyes are not chosen until decisions about colours can reflect the market better.

The company has a network of subcontractors which are owned by current or former Benetton employees, and which supply Benetton’s factories. This reduces manufacturing and labour costs, has reduced risk and improved flexibility

Benetton sells through agents, which are responsible for developing a given market area. Benetton does not own its own stores, but supplies its agents with merchandise and their relationship is something like a franchise.

Globalisation has caused the homogenisation of tastes around the world. Globalisation also causes many firms to perform certain operations in-house. Information technologies also means that information costs a lot less, eliminating distance barriers and allowing a “real-time” response to the market

Benetton has gone for a more vertical integration strategy. It is going backwards to achieve economies of scale in its resources and forwards to compete with other firms on the high street.

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