Name : Dor Biran ID : 302849997 Business Communications – Final Project Benetton Group When Israel was first established
, its main thriving local businesses were comprised of food and textile. My grandfather owned a textile factory, but with the rise of globalization, and the Far East countries becoming the primary setting for manufacturing garments, he had to shut down his factory. He was still young and stayed very connected to the industry, so he decided to buy and develop the Benetton franchise in Israel and in Poland. I will present the story of this company from that day until the day the last store had been sold. Company Profile The Benetton Group whose core business is fashion apparel has branches in 120 countries around the world. A group with a strong Italian character whose style, quality and passion are clearly seen in its brands; the casual 'United Colors of Benetton', the glamour oriented 'Sisley', and 'Playlife' American college style. The Group produces over 150 million garments every year. Its network of over 6,400 contemporary stores around the world offers high quality customer services and generates a total turnover of over 2 billion euro. (Benetton Financial Reports, 2011) Israel Branch Background Benetton Israel wasn't my grandfather idea, a company named "Rasko" imported the brand and opened the first ever Benetton store in the Dizingoff Center mall in Tel Aviv. My grandfather, who was looking for new direction in his business life, heard that "Rasko" are looking to sell the franchise. Based on the success of the brand in Europe and the lack of worldwide brands in Israel, in 1986 he decided to buy the franchise and start its development.
this was specifically great for the Israeli consumer. TV. the fashion country. The arrival of the cable TV caused the Israeli youngsters to get exposed to American culture (music. Opportunities and Threats The opportunities were clear. clothes) and to try to mimic them. climaxed.SWOT Analysis Strengths and Weaknesses
Benetton reached its peak in the mid 80's. The Israeli market lacked worldwide brands and the demand for fresh garments from Italy. Although there was a demand for new and world known brands. Terence. What made Benetton unique were was the variety of colors they offered and the high quality of their garments. Danielle Medina. Since Israel’s fashion lacked a range of worldwide brands.
. Tax authorities can suddenly decide to raise the tax rates. and were sold in relatively high prices. as is in any business. In addition. and Thomas
Walker. the clothes weren't made for Israel’s weather and a significant part of the summer collection was irrelevant to the Israeli market. Walker. which displayed new trends for the fashion industry.
stores opened all around the world. There were a few threats for getting started. who now had the quality and the variety of colors Benetton offered that was never before seen in the streets of Tel Aviv. and their financial reports got better by the second. so the prospects for expansion were great. 1995) The mid 80's were symbolized by the beginning of globalization. There was only one store. People outside of the bubble of Tel Aviv might not buy these high quality high-price garments and other companies might try to eat part of the success cake. The Beginning "New Communication technologies bring multiple cultures to the young. and cultural isolation is less of an option" (Brake. Italy-made clothes were not cheap.
Another aspect of the success. In 1991. The combination of the variety of colors and European quality was new to Israeli buyer and succeeded all over Israel and around the world. the company was able to raise 3 million dollars and got the boost to keep getting larger. At that point. He accepted and began the work in both countries and continued succeeding in achieving high profits. Benetton had three stores. The demand for “foreign look” clothes was high as the expectations. Benetton. did magic. was the issuance of the company in the Israeli stock market. the Dizingoff Center mall. Benetton was one of the biggest and most prestigious clothing stores in Israel. in the best location in Tel Aviv. with huge round glass display windows. they refused. Benetton conquered the fashion industry. The entrance of the Spanish brands and their possibility of offering the same looking clothes in prices Benetton couldn't compete with. the success of the brand induced new and developing malls to contact Benetton and ask them to open a store in a prime location in their mall. in both countries. totaling of 17 stores throughout Israel. Sales were great.The worldwide name. Stores popped in every major city.
Furthermore. The huge success in little Israel made the headquarters in Italy offer the Polish franchise to my grandfather. When Benetton headquarters asked to change their policies to match the new shopping culture. The Downturn The mid 90's were characterized by the growth of the shopping habits of the Israeli consumer. "Ayalon mall" in Ramat-Gan. Globalization took an even greater part in the textile industry. At one point. Benetton opened a store in the first mall in Israel. the flagship store being 250 m. and a method of changing their collections every few weeks. won the Israeli crowd. 3|Business
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com) "We always need to pay attention. "Companies that are paying attention to culture are seeing the results on their bottom lines." (Brake. stereotypes tend to lock us into well-worn channels of perception." (Brake. and have the flexibility to adapt.and other-awareness. Benetton. Cultural competence is no longer a nice skill to have. and Thomas Walker. Terence. Danielle Medina. Cultural competence begins with open attitudes. Walker. felt the downfall and decline in profits. observe. listen. including the ones in Israel. Walker. as part of a worldwide phenomenon. The Italian headquarters were stubborn and refused to adapt to the new consumption habits.
(Benetton group's stock between the years 1992-1996. Benetton. 1995)
. were closed since it wasn't profitable to keep holding the franchise. 1995) This battle was determined from its beginning. Worldwide stores. which need grounding in cultural knowledge for translation into cross-cultural skills. Danielle Medina.The options that the Israeli buyer was exposed to changed the Israeli consumption culture. which facilitate the development of self. Terence. and Thomas Walker. changed his mind from quality to quantity. The Israeli buyer. It is an economic necessity. Unfortunately. world widely.
Conclusion The expose of the Israeli culture in the mid 80's to American and European cultures made the import of the world-known brand of Benetton into a big success. The marketing Benetton used all around the world displayed themes that Israelis had never seen. Shops were starting to lose money and some had to be closed. From building a plant to manufacture and being one of the biggest exporters in Israel. At that point. he sold the few stores that were left and the franchise. The skill to understand the culture and to be able to do great things with it is the greatness of this tale. and Benetton catered their needs perfectly. I hope to embrace this skill and that this is only the beginning of the story. when he saw that the company had no future. the Polish market still operated well and he was centered on keeping the profits there. then advancing to become one of the biggest importers from China and Hong Kong and finally. and it is known that there is no such thing as bad publicity. but his requests got refused. that will write a paper in his business degree about his grandfather's achievement. Biran Dor 5|Business
Communication Final Project
. Proud to write it. maybe my grandchild. The identification of the state of the market and their need for a world-known brand was brilliant. The final step. My grandfather asked. The conservatives tried to censor the ads. and in many years I will have someone. buying and selling Benetton. My grandfather showed great skills to be at the right place at the right time. The Israeli market was seeking new and fashionable clothes. When the culture made its next development in the 90's. which got them even more advertisement. a change needed to be made.
Rep." Doing Business Internationally: the Guide to Crosscultural Success.
. and Elaine Mosakowski.benetton." Harvard Business Review. and Thomas Walker.Interview with the CEO. Christopher.com>. Menachem.
United Colors of Benetton. Brake.
4. New York: McGraw Hill. 3. "Success in Understanding Calture." Personal interview. <http://www. 72-75. Danielle Medina. "Benetton Israel . Terence. Web. October (2004): 139-146. Earley. 1995.Bibliography 1. 28 May 2011. "Cultural Intelligence. Walker. 2011. Ben Dov. Print. 2. Web. P.