The document discusses options for the Italian clothing brand Benetton to address declining profits. It is facing a dilemma whether to expand in Europe, where sales are expected to grow 15%, or enter new markets like the US and Japan. Option 1 is to expand into the large US market and increase global visibility. Option 2 is to diversify product lines by outsourcing new items like perfumes and shoes. Option 3 is to diversify product design into related clothing categories while maintaining the brand's core strengths. The recommendation is to diversify product lines through a suitable manufacturing partner and distribute the new items using Benetton's existing channels.

1. Rishabh Kapoor
Sumit Rathi
PratapChandar
Nitika Goel

2.  Situation Analysis
 Problem Statement
 Options
 Criteria
 Options Evaluation
 Recommendation
 Action Plan
 Contingency Plan

3.  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.

4.  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

5.  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

6.  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.

7.  Effect on long term growth prospects of
the company.
 Effect on revenues, market share and
brand equity.
 Effect on company's core strengths (as
in, its unique pricing, retailing, store
location, manufacturing strategies) and
values.

12.  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

13. Could opt for change in product design
and diversify into other related clothing like
underwear, hosiery, etc.