The Benetton group

Founded in 1965, the Benetton Group started with limited resources that necessitated the strategy that ultimately resulted in rapid international growth. Since the beginning, Benetton concentrated on devoting its skills to the design and manufacture of quality clothing instead of providing direct consumer retailing. Benetton established a competitive advantage by establishing its brand as the best-known Italian apparel manufacturer, concentrating mainly on fashion-conscious young consumers from their mid teens through mid thirties.
Since almost 85% of its production is subcontracted to approximately 500 contractors both in Italy and abroad, and most retail stores are independently owned, Benetton does not have direct managerial control over production and sales operations. Additionally, Benetton’s in-house operations and manufacturing partners are largely centralized in Italy (as much as 82% of core manufactured products were produced in Italy), making them susceptible to exchange...