United Colors of Benetton

IExecutive Summary The get together Colors of Benetton a political party of colors and contr everyplacesies. Offering the foundation an brainstorm to style, as well as, human equality and world issues, Benetton gives us classy habiliment and innovative promotion. While trying to capture an audience favoring Italian character in style and design, the high society additionally desires to present the world with contentious campaigns to awaken thoughts and debates. These contr all oversies ar jeopardizing Benettons position in the attention, and its account of being trendily unique and committing to world harmony.II. Introduction The United Colors of Benetton (Benetton), an Italian establish company, is primarily focusing its business on clothing and disputable advertising. Presented all over the world, the company is operational to young and old in combined colors and stylish flair. In the following pages a fatten out internal and external analysis of the company will be explained, as well as, a description of the companys overall standing. The alternatives as seen atomic number 18 described to include the advantages and drawbacks of each alternative.Conclusively, a recommendation based upon all of the findings outlined is prescribed. III. External Analysis A. Customer Analysis Benetton sells womens and mens garments, accessories, shoes and fragrances to clients that are almostly devise-oriented women and men betwixt the ages of twenty to thirty- five. Colors is published in three editions and quartet languages, with a website that is both general and praised by critics. The magazine is bi periodical and reaches young people all over the world.Benetton is an interesting trans national fraternity that truly has a social conscience and tries to employ models who look same(p) the human raceeven featuring gay models who are HIV positive. B. challenger Analysis The clothing effort is a very broad labor selling products ranging from pants a nd shirts to accessories. It is affected by the la test trends in design, models, colors and styles, and alike by consumer preference. There are several(prenominal) alike companies selling comparable products, so competition is incredibly fierce. Benetton does non outsource any of its procedures, notwithstanding is in charge of design, work and distribution.It is therefore demanding to compare the company with early(a) organizations in the same industry since contenders takeer be smaller and concentrate on only one expectation of the commercial chain. Consequently, Benettons contentions were selected by viewing thewww. hoovers. comweb site. According to the organizations available here offering approximately the same products as Benetton the main competitors are Industria de Diseno Textil (Inditex), GAP and Hennes and Mauritz (H&M). It is assumed that these three organizations are Benettons closest competitors receivable to the concomitant that they tail the same con sumer segment.According to the CBS Market Watch the competitors are non all present in acquirely the same industry repayable to the fact that Benetton and Inditex actually produce clothing and fabrics, design and retail devise products, temporary hookup GAP only retails, and H&M retails and designs its goods. It is assumed that the exact industry is irrelevant because all companies still aim for the same target foodstuff and therefore compose a threat to Benetton. Furthermore, all quad organizations originated from four unalike countries, but this is also looked at as unavailing because they are a global company with global customers. . Inditex Inditex is the closest competitor to Benetton because it is present on the stock trade and it also designs and retails its fashion. It is a global company with more than 1,300 shops in close 40 countries. It is most popular in Europe, just like Benetton, perhaps due to its origin Spain. Inditex introduces naturally products by a nswering to popular trends presented by customers. The company has a larger market voice than Benetton in the clothing and textile industry with cardinal share compared to Benettons twelve percent (CBS Market Watch).This could be as a result of Inditexs six banners compared to Benettons five, and also because of the fact that Benetton has been having several difficulties selling its products after its bluely noticeable marketing campaigns were verboten in several countries. Furthermore, Inditex is mentioned as number three deoxycytidine monophosphate and ninety on the FT Global 500 the worlds largest companies list, while Benetton is not on this list (Financial Times). 2. GAP GAP is an Ameri arouse-based company with almost 4,250 stores worldwide. GAP only retails its products, but the company is a strong competitor toBenetton. GAP sells basic, causal styles for men, women and children. The company has three irons and all frock are privatelabeled merchandise made specifical ly for GAP. GAP is on the fortune 500 as number one hundred and thirty, and also on the FT Global 500 as number three hundred and forty-eight (Hoovers). 3. H&M H&M is a fashion company from Sweden. It has about 844 stores in 14 countries and is in the midst of exploitation further. H&M designs its vestments by using 90 distinguishable designers who create collections for women, men, teenagers and children.H&Ms intention is to uphold a high fashion content which is up-to-date within design concepts and at the headland of the latest international trends (hm. com). The organization also sells underwear, sportswear, accessories and cosmetics. The competitive structure of the clothing industry can be explained as very assorted and confused to plot. Organizations do not segment by age as much(prenominal) as by lifestyle or theme for example, designer accessories, pro forma wear and casual wear. There are several channels of distribution available, such as catalogue retailing, depa rtment stores and outlets, as well as the typical brand store.The industry can be viewed as jolly fragmented and there is a large amount of distinguishable chains available on the market. The industry is therefore highly competitive. Barriers to entry are low, and chains can expand quickly and grow large in size and popularity. Present companies have to struggle with new competition ofttimes and intensely. Companies are very dependent on customer preference and composition can fluctuate distinctly due to modifications in, for example, fashion and image (Institute for retail Studies). C. Market AnalysisToday, the Benetton Group is present in 120 countries about the world. Its issue business is clothing a group with a strong Italian character whose fashion, design proficiency and enthusiasm are clearly seen in the United Colors of Benetton and the more style-orientated Sisley brands in The Hip Site, the brand for teenagers and in the sportswear brands, Playlife and Killer Loop. Be nettons sports goods brand, Prince (tennis racquets, footwear & apparel), has a 30 percent global market share, and Rollerblade In-line skates also has a 30 ercent global market share. Additionally, NordicaSkis (ski boots & mountain wear) has a 28 percent global market share. Ektelon Racquetball is the market leader. The Group produces over 100 million garments every year over 90 percent of those are in Europe. Its retail ne iirk of 5000 stores around the globe is progressively more focused on large floor-space points of sale presenting high-quality customer services and additionally generating a total derangement of two billion euros net, of retail gross revenue.Benetton has experienced tremendous growth and above-average profitability over the years, and what guides it especially striking is the fact that it has been achieved in mature industry apparel in an apparently hostile environment labor-expensive and unionized northern Italy. Benettons financial reports from 1996 to 20 02 show growth and increasing revenue except in 2002 total sales in 2002 amounted to approximately 2. 0 billion euro, low from 2. 1 billion in 2001. The main reason for this loss is that the schedule for the disposal of the sports equipment business resulted in the steep decrease in turnover in the sports sectors.It hurt the Groups overall performance. Moreover, Benettons dialogue campaigns played an important role in establishing its brand identity. On the otherwise hand, they alienated the target market and Benetton retail merchants. For example, in Germany, Benettons second-largest market, partly because of the disputed print- media campaign, awareness of Benetton had significantly increased relative to other clothing brands, in part due to the controversial print- media campaign however, measures of likeability relative to competing brands decreased.Also in 1995, several of the 600 German retailers that used to carry the Benetton line banded together in a boycott. Thus, th e Group attributed much of its 1994 sales drop to the campaign. Additionally, the company partnered with Sears for a more affordable line of Benetton USA, then lost the contract when Benetton intend to release an ad campaign with death-row inmates. Thus, Benetton lost its place in the U. S. market, as the company became better known for its infamous P. R. than its clothes.The understated image of the fling replaced the aggressive social advertising of Benetton in clothing campaigns as the 90s came to a close, but Benetton is Europes largest clothing manufacturer and the worlds largest consumer of wool in the garment sector. As a result, the market share in the United States has gradually decreased, even in the European area. In contrast, the Benettons market share in Asia area has been increasing, for example in, Japan, Korea, and mainland China due to being the Groups core targets. In 2000, the revenues by geographical area showed European (74. %), the Amercias (12. 3%), and Res t of the world (13. 4%). However, Benettons 2002 revenues by geographical area sho wed a different trend as European (68. 9%), the Americas (9. 6%), Asia (8. 9%), and other (12. 6%). D. Technology Analysis Using communication and information technologies is a very effective strategy for Benetton. The company is referred to as quick response, in which manufacturing, warehousing, sales and retailers are linked together. In this strategy, a Benetton retailer reorders a product through a direct link with Benettons mainframe computer in Italy.Due to the strategy, the company is capable of shipping a new order in only four weeks, and that is several weeks faster than most of its competitors. Furthermore, the company is using integrated information systems therefore, the company retards daily sales data from its own boutiques, which is integra ted with CAD and CIM. Also, global EDI network links agents with production and inventory information. The EDI is ordering transmission to headqua rters, and it links with air carriers, as well.Recently, Benetton plan to curve radio frequency ID (RFID) chips into its garments to track its clothes worldwide. The chips would help the Italian clothing manufacturer cut costs by eliminating the need for workers to spend a penny inventory by manually scanning individual items of clothing. It would also harbor the garments against theft. However, the RFID chips could pose significant risks to customers privacy because they would allow anyone with an RFID receiver to locate customers habiliment Benetton clothes, including companies that want to sell them their products.Therefore, consumers would be bombarded with intrusive advertising because a biography of customers purchases and their identities would be linked with the tag even after they leave the store. It would weave the technology into the collar tags of clothes that cost at least 15 dollars to keep track of them as they ship. The RFID technology offers Benetton a number of advantages, not the least of which is its ease of use. Unlike a bar-code scanner, which must be held presently in front of the item being scanned, mployees with RFID receivers or shelves with the technology can scan entire boxes of items from up to five feet away. The technology would thus claim fewer people to scan clothing items for inventory purposes. RFID technology also provides business managers easily with store detailed information about customers get habits that could spur further sales. The tagging system may also save the company money by reducing theft, because the RFID tags can be programmed to set off an alarm if nearlyone leaves a store without paying for an item.Similarly, the technology would make it harder for merchants to sell stolen or bootlegged versions of clothing in flea markets and other venues a retailer who spots an item that she suspects is either stolen or illegally manufactured could check its origin using the tagging system. It may also help cus tomers find the clothes they want in the store and even make it easier for them to return items without a receipt because the store would have recorded the RFID tag. E. Socio-Cultural Analysis From a socio-cultural perspective, fashion is a cultural and societal issue that varies from culture to culture and from area to country.It also varies within a specific culture with time. A company like Benetton must monitor trends for new opportunities or threats because as the fashion trends change, so does the customer base, and the ethnic/multicultural consumer is the fastest growing segment. Clothing, however, is a visual representation, which fulfills the de sire of each individual who wants to be noticed in a society in a particular way. Because of this, the apparel industry will never falter or suffer abrupt changes, but will adapt and change due to various conditions.Linked to this phenomenon is the aspiration of different types of individuals with different desires to either have t he newest or most significant types of apparel, particularly in the industrialized nations. This requires participants in the industry to offer the newest styles of clothing in order to retain market share. Despite this overall socio-cultural trend, there is some indication that majority of consumers are not purchasing as apace as they have in the past due to the fact that the delivery is recovering.Markets for lower-end brands continue to exist, however, in developing nations where individuals cannot afford the cost of newer styles. As a result, the fashion industry is an industry where the socio -cultural environment is of prime importance. The firms in this industry above all, must bring out new designs and keep snarf of Form Bottom of Form