Situation Analysis Problem Statement Options Criteria Options Evaluation Recommendation Action Plan Contingency Plan
Benetton is a very successful clothing brand with mass following in Italy with expertise in the field of knitwear. The case describes the strategic and competitive advantages of Benetton, which have allowed it to maintain a foothold in the Italian market for a long time. However, with increased competition their profits have considerably dropped in the recent years.
The dilemma for the management team of Benetton is to decide between expanding in Europe or in other geographies like US or Japan The expected sales growth in Europe is 15% whereas there is a significant opportunity to open more than 1000 retail stores in the US The decision to expand in the US is to be made after evaluating the pros and cons of the expansion
The problem for Benetton is tackling low profits in Italy though expansion in rest of Europe or through exploring new territories like US and Japan
Option 1: Benetton can choose to expand its market into U.S and increase its global visibility Option 2: Benetton could seek to add its other new ventures such as perfumes, shoes by outsourcing of manufacturing Option 3: Could opt for change in product design and diversify into other related clothing like underwear, hosiery, etc.
Effect on long term growth prospects of the company. Effect on revenues, market share and brand equity. Effect on companys core strengths (as in, its unique pricing, retailing, store location, manufacturing strategies) and values.
Find a suitable partner for supplying new quality product lines for respective products Label it with Benetton logo Distribute using existing Benetton channels Allocate enough shelf space Advertising to be clubbed with clothing products
Could opt for change in product designand diversify into other related clothing likeunderwear, hosiery, etc.