Q1. What are the most important elements of Benettons marketing, manufacturing, logistics and financial strategies?

Marketing: 19-25 yr old target market Youthful, sporty appeal Bright colors Retailers only sold Benetton High advertising and promotion budget Establishing lead stores prior to expanding Many local stores under different names pricing lower than competition Price quality combination with high fashion content w/bright colors Layout of stores - open shelves Several opportunities for retailers to order / Flash collection / Reassortment

Logistics: Limited storage space for back-up stock manufacturing short delivery time items to order Part ownership in everything In-depth knowledge of seasonal issues planning process based on 5-10% of initial orders Receive orders prior to manufacturing Warehouse would save 20% in transportation costs Inventory turnover high considering large variety 5% cost of transportation Freight is included to any location

Manufacturing: Efficient use of plant capacity Increased capacity through outsourcing Dyed garment after assembly - instead of dying the yarn Advances in drying technology and softness techniques

Financial Payment of subcontractor after production Large investments in manufacturing and logistics operations Stores were much smaller than competition with twice the revenue

Q2. How does Benetton gain advantage over competitors in Europe?

backward and forward integrated: Raw material control through ownership of retail stores Advanced centralized distribution center Stores are selling only Benetton Raw material price leverage Differed differentiation Heavy use of promotion Lower production costs Strong brand recognition Lower selling price Efficiency of stores vs. competitors

Q3 and 4. Would you enter US at this time? If so, how would you resolve the questions in the case? What other questions might you address? . Yes, entering US at this time would be a good idea because Good business: Retailer in typical Benetton store has profit of 19% before tax Retailer is given favorable payment terms

Benetton only wants young energetic people: We question what happens in long run If given a choice, it would rather be a retailer of Benetton's vs. competitor its innovative products and low price backward and forward integrated: Raw material control through ownership of retail stores A large storage capacity to stock its products would go a long way in addressing additional demands from customers. Relying on just-in-time production techniques could be beneficial

Q5. Put yourself in the position of Elio Alufi & Albo Palmeiri, as senior managers, given the strategy of implementing whatever strategy you propose what would you do first? Second and third?

First set up large warehouses to address the need of changing customer demand. Second to follow backward and forward integration: Raw material control through ownership of retail stores, and cut down import costs. Third, to introduce new product lines and attract a wider customer base.