The Benetton group

Founded in 1965, the Benetton Group started with limited resources that necessitated the st come ingy that ultimately resulted in rapid international growth. Since the beginning, Benetton concentrated on devoting its skills to the design and cover off of quality clothing instead of providing direct consumer retailing. Benetton doed a competitive advantage by ratifying its brand as the best-known Italian app arel manufacturer, concentrating mainly on fashion-conscious young consumers from their middle(prenominal) teens through mid thirties. Since almost 85% of its exertion is subcontracted to most 500 contractors two in Italy and abroad, and most retail stores are independently owned, Benetton does non have direct managerial regard over production and sales operations. Additionally, Benettons in-house operations and manufacturing partners are for the most part centralize in Italy (as much as 82% of force construct products were produced in Italy), making them susceptible to exchange rate fluctuations. On the retail side, Benetton utilizes contracted agents working on commission to establish and support retail outlets. The entrepreneurial agency ashes helped Benetton to quickly augment their retail network, and thus, push more Benetton products. However, the agency system does not provide the operational support to retail stores open in centrally controlled retail competitors, like The Gap, and cannot enforce either commonality in layout, stocking, or décor from store to store.

Additionally, the payment construction for agents only encourages sales. There is little direct i nducing to portion best practices with ne! w(prenominal) agents in different territories, to share business experience with Benetton, or to devote resources to helping cast the Benetton brands. In former(a) words, the agency system encourages the free-rider effect. It is recommended that Benetton alter its schema in quartet steps to defend its core markets, and to organise itself for future worldwide expansion into new markets. In other words, Benetton needs to grasp globalization for its long-term growth, and... If you want to live on a full essay, order it on our website: OrderCustomPaper.com

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