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 stipend off of quality clothing instead of providing direct consumer retailing. Benetton doed a competitive advantage by put uping 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 take is subcontracted to most 500 contractors both(prenominal) 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 concentrate in Italy (as much as 82% of force manufacture products were produced in Italy), making the m 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 nail 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 everydayness in layout, stocking, or décor from store to store.

Additionally, the payment structure for agents only encourages sales. There is little d irect inducing to assign best practices w! ith new(prenominal) agents in different territories, to share business watchword with Benetton, or to devote resources to helping cast the Benetton brands. In other words, the agency system encourages the free-rider effect. It is recommended that Benetton alter its schema in 4 steps to defend its core markets, and to organise itself for future world(a) expansion into new markets. In other words, Benetton needs to reach out 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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