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Project Title: (Benetton A

)
Subject Name: (Written Analysis and Communication)
Date: (14March, 2012)

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2 . the chairman of the Benetton group was planning to expand his base to US. Along with factors like stagnant economy. increasing local competition and imported merchandise lead a doubt in the minds of the Benetton group which eventually lead them to have a relook at their strategy. an Italian apparel company is by far the market leader in Europe. slowly Benetton’s product lines were reaching the saturation point.Executive Summary Benetton. But as the saying goes that change happens along with time. Thus Luciano Benetton. The attached report analyses the possible market in the US and proposes a strategy for market penetration.

...........................05 5.......................................................... Problem Statement....................................................05 4..............................................................................Table of Contents: 1.......................................................................................................... Recommendations................................. Options.04 2........................ Action Plan..................................................06 8............................................................................................................ Criteria for Evaluation............................................... Situational Analysis....06 3 .....04 3....................................................................06 7.......................05 6...................................................................................... Contingency Plan........................................................................................................................... Evaluation of Options.........................................

There are many possible ways of approaching this strategy. 4 . Also the stagnant economy is not helping the cause. For a company which had been a market leader for more than a decade is currently facing stiff completion from other firms which has emulated its strategies. including: • New geographical markets. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. And also        Must allocate the right resources Decide what to sell Decide where to sell Select the criteria for decision making Seek an acceptable equity share Acquire the right fit Design an exit strategy Problem Statement To develop a market development strategy for entry into US and Japan markets. there are some factors that should be considered to check the viability. In this case Benetton attempts to penetrate into new markets with its existing products and thus the strategy according to Ansoff matrix would be Market Development. But growth is never continuous and eventually comes to an end. They had their own unique strategy in the processes. The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy.Situational Analysis Benetton. Although other countries in Europe were new markets but for long term sustainability expanding globally could be the way. for example exporting the product to a new country • New product dimensions or packaging: for example • New distribution channels • Different pricing policies to attract different customers or create new market segments But before entering into foreign territory. They are the political and legal. over the years had been an innovator in the production of knitted overwear and had a much decentralized process. Thus it was planning to expand globally and penetrate to US and Japan markets. economic and cultural factors. Not only was their innovation evident in the production but also in every other process ranging from marketing to logistics.

Degree of Uncertainty 3. But the presence of other firms in the same sector to an extent confirms the availability of the basic resources. This could help the Benetton group in slowly studying the US market and take the appropriate steps according to its long term goal.2 Degree of Uncertainty The degree of uncertainty is again high but lower than option 1 as the huge set up cost is not availed. Availability of resources Evaluation of Options 1.2 Degree of Uncertainty There is a high degree of uncertainty as the Benetton group do not have adequate data about the market and could result in a huge loss if not properly planned out the entry mode. 1.3 Availability of resources 5 . again because of the largely unexplored market and also large set up cost would be saved. Further there would be completion from local players too and it was a unknown name here.1 Profit potential The potential for profitability is huge as this is a untapped market with an economy boom and a huge population. which further could be used for other purposes. Benetton should setup a manufacturing facility at US and directly invest in the US markets 1. Use the supply on demand model to directly ship to their retail stores Criteria for Evaluation 1.1 Profit potential In this case also the profit potential is high. 1. It could capitalize on the strong image of Italian design and thus catering to this huge opportunity.3 Availability of resources Lack of proper data about US restricts any information regarding the availability of resources. Benetton should setup a manufacturing facility at US and directly invest in the US markets 2. 1. Profit potential 2. Build a warehouse and keep inventory of finished products which would be shipped from Ponzano factory 1. Build a warehouse and keep inventory of finished products which would be shipped from Ponzano factory 3. 2. 1.Options 1.

Action Plan Before exclusively investing in the US market. but the shipping costs would be high. Simultaneously a board member of the group should try to study the US market and identify the factors that would change the selling pattern.3 Availability of resources There would be no concern regarding the resources as only the finished products are being delivered directly to the retail stores. we come to a conclusion that option 2 of building a warehouse and keeping inventory of finished products which would be shipped from the Ponzano factory would be the best one. Use the supply on demand model to directly ship to their retail stores 1.2 Degree of Uncertainty In this case the degree of uncertainty is reduced as the finished products are directly delivered to the retail stores according to the demand. They should properly plan their entry into their market either through franchising or through joint ventures.Here the majority of the resources are shipped from Italy and thus it is not an issue. they would be unable to study the market and may fail to establish themselves in the US market. Accordingly a robust supply chain management should be implemented and proper inventory should be maintained. the Benetton group should build a warehouse. The marketing plan and the product mix should be decided according to the local cultural and economical factors after an exhaustive study. 6 . where they could stock the finished products and supply accordingly. 1. But in this case. 1. 3. Contingency Plan Suppose option 2 fails due to political factors or high competition. then they should resort to option 3 temporarily and again implement option 2 after a period of time. Recommendation Based on the above evaluation.1 Profit potential Here the profit potential is the highest as there are no set up costs involved and only the shipping costs are the major costs.