Operations management is the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.

1. B E N E T T O N
BENETTON GROUP
Term Project

2. Presented By:
Abhishek Chaudhary
Ishanee Bajpai
Deepali Singh Parmar
Nishant Kumar Bhatnagar
Vikram Malik
B E N E T T O N

3. Benetton
Group
The evolution of a network
to face global competition
This case study on Benetton group provides Benetton’s effort as an anticipation
strategy, aimed at interpreting and reacting to the changing environment and to the
new competition.
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4. UNITED COLORS OF
BENETTON
Present scenario
▪ Today, Benetton group is present in 120 countries around
the world and provides employment to 7,987 people
around the world.
▪ The group produces over 130 million garments every year.
Ts retail network of 6000 stores around the world, offers
high quality customer services and generates a total
turnover of over 2 billion Euros.
▪ Benetton group is listed on Borsa Italiana, the Frankfurt
Stock Exchange and the New York Stock Exchange.
▪ In 1984,Benetton Group hired photographer Oliviero
Toscani as their creative director.
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5. Benetton: the archetype of network organisation
Factors of Success(now outdated):
Unique and original marketing
and communication strategy
World recognized example of counter-intuitiveness,
irony, and disruption both in marketing and
advertising.
Network organization for
manufacturing
Use of a network of ‘contractors’ and
‘subcontractors’
Network organization for
distribution
➢ Franchising
Innovative operations
management techniques
Resequencing for postponement (tinto-in-cap-
strategy)
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6. ▪Globalization
▪Cross-country homogenization of consumer’s lifestyles
▪Manufacturing
▪Information and Communication Technology
▪Real time response to market
▪Product development and manufacturing
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EMERGING CHALLANGES

7. ▪International production network
➢Labor cost global Scanning
➢Minimization of foreign trade constraints effects
▪The role of retail outlets(Megastores)
➢Draw the customer into the firm’s world
➢Communicating its image and philosophy
➢Twofold, turnover increase per square meter
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Challenges in the casual wear business

8. Global competitors in the casual wear business
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9. Benetton new global network
Benetton is there involved in global competition on two , very different fronts both of which
poses considerable challenge
Casual wear
The traditional causal
wear business which
has to face up to
innovative and
aggressive competitors
Sports wear
The sports clothing and
equipment business which
is having to develop and
establish itself in a market
that is not going to expand
much further as many firms
have already consolidated
their positions
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10. Benetton’s new global network casual wear
The traditional causal wear business which has to face up to innovative and aggressive competitors.
Product design in the
causal wear business
➢ The task of selecting the models
best suited to each different
clientele was left to individual retail
agents.
➢ Benetton's developing flash
collections to keep up with fast
changing market trends.
➢ Research of new materials that can
be washed and need not to be
ironed.
Operations management in
casual wear business
➢ Benetton has adopted the original
Castrette model in the other
countries like Spain, Portugal,
Tunisia, Croatia and Hungary.
➢ Benetton gradually increased the
degree of upstream vertical
integration to incorporate its textiles
and threads.
➢ Automating logistic process in order
to achieve total integration within
production cycle.
Reshaping the retail
network
➢ Enlarging its retail outlets, wherever
possible, so as to display whole
range of Benetton
➢ Each retail outlet in one market
segment or product(men/women)
➢ Opening new large retail
outlets(500-200 sqm) in the main
shopping streets and areas of big
cities.
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11. ▪The worldwide distribution chains
➢Inclusive relationship of actors of business with Benetton
➢The worldwide chains dictate the rules of the game
▪Highly competitive industry
➢The world market is already virtually saturated.
➢A market that is not going to expand much further.
➢Many of the firms have already consolidated their positions.
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Challenges in the sports business

12. ▪Currently:
➢The world market for sports equipment and clothing : 20% sports equipment and 80% soft clothing
➢Benetton Group: 88% sports equipment and 12% soft clothing.
▪New Approach:
➢Expand its sportswear(clothing)
➢Offer very wide Play life and killer loop collections, ranging from the top level to most economic items
➢Attract a broader spectrum of consumers
➢In sports equipment: highly innovative and professional.
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Reorganization of the sports business

13. Benetton’s new global network sports wear
Benetton intends to expand its sportswear business with respect to its sports equipment business
Product design in the
sports wear business
➢ $5 million investment in high
technology system of designing.
➢ All R&D activities: Venegazzu,
Treviso county.
➢ An open space of about 200 sqm,
100 people work together.
➢ Exploit possible synergies within the
product innovation process to the
maximum.
Operations management in
sports wear business
➢ Concentrating production of ski
boots, skates, skis attachment and
accessories.
➢ Delocating the whole or part
production of products where labor
cost is lower.
➢ Concentrating management and
control of sportswear production at
Casterette.
Reshaping the retail
network
➢ Large shops dedicated to displaying
and selling Benetton’s sports
equipment brands.
➢ Constructing a new specific network
of play life retail outlets.
➢ Make-to-order production approach
called Blade Express Formula
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14. Benetton Global Value Chain
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Productive and logistic
Units: Hungary, Croatia,
Tunisia, Italy
logistic Units: India, Thai
china(Shenzen)
Contemperary1, Trend,
Continuative items, Just in
time
Contemperary1, Trend,
Continuative items, Just in
time
China Warehouse shangaiWarehouse for Europe
(Castrette-Treviso)
Just In Time & Heavy usage of IT(EDC) to integrate information to ensure responsiveness

15. Localisation of the foreign production poles
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16. UNITED COLORS OF
BENETTON NETWORK
Network Organization
▪ Factors contributing to success
➢ Delayed dyeing
➢ Network organization for manufacturing
➢ Network organization for distribution
▪ Benetton’s strategy in supply chain
management
➢ Product design(customized by region)
➢ Supply and production(strong upstream vertical
integration)
➢ Retail network(mixed downstream vertical integration)
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17. Benetton Live windows Fabrica
Fabrica is the center for research and development of communication and gathered young
people and experimental artist from all over the world.
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Fabrica is developing a new communication
channel for the Benetton megastore, using
technology to shape a new customer experience.
The main goal is to transforming the customer
approach to the store in a participative experience.
The BENETTON LIVE WINDOWS project was born from this idea.

18. B e n n e t o n
Thank you!