Submitted by: Anzar Khan

Reg #: 1511106041
Program: BBA
Semester: 9th
Subject: International Business
Submitted to: Sir Ahmed Butt
Case Study Answers
 BENETTON IN THE FAST LANE

Is Benetton a multinational enterprise?

Benetton is a Multinational Enterprise as it is headquartered in

Italy and has operations in other countries. It has built up to a
global network of over 7000 retail stores in 120 countries. Over
80% of production still takes place in Italy & the company is still
72 % owned by the Benetton family. As one of the characteristics
of MNEs is that the company and its business partners have a
common strategic vision, Benetton and its independent stores
across the globe are working towards a common strategic vision.
Another characteristic of a Multinational Enterprise is that it draws
on a common pool of resources. In this case Benetton allows the
independent stores to use its brand name and part of the
manufacturing savings are done by outsourcing to neighboring
subcontractors.

What are the country-specific factors that have helped

Benetton be a success?
Benetton is one of those successful global companies that was
partly successful as to its production & design was built on a
strong home base Italy. The EU countries have close economic
linkages with each other and Benetton being in Italy benefited
from this fact. The same European culture and lifestyle in many
countries helped Benetton apply similar strategies. However, the
number of outlets reduced from 700 in 1988 to 150 by 1995 in US.
and it might be difficult for the Benetton family to understand the
American Lifestyles from its European bases.

What are the Benetton’s firm specific advantages?

Benetton’s 80% percent production takes place in Italy and 72% of

the enterprise is owned by Benetton. Benetton has its firm specific
advantages in advertisements. It goes I for cutting-edge advertising
that grabs public attention. Benetton’s closely monitored
independent stores were able to use Benetton’s brand name,
distinctive colors and were supported by clever international
advertising. Benetton doesn’t advertise its products directly. Rather
its advertisements are for a lifestyle. The “United colors of
Benetton” ads are designed for a homogeneous global consumer
interested in fast cars and a fast lifestyle. This creates an image of
new age awareness as Benetton advertising has featured Formula 1
cars, AIDS, high art and “attitude”.