Hawaii Pacific University

The United Colors of Benetton

by

Marion Weiler

Table of Contents

I. Executive Summary

II. Introduction

III. External Analysis

A. Customer Analysis
B. Competitor Analysis
C. Market Analysis
D. Technology Analysis
E. Socio-cultural Analysis
F. Political-legal Analysis
G. Economic Analysis

IV. Internal Analysis

A. SWOT Analysis

1. Strengths
2. Weaknesses
3. Opportunities
4. Threats

B. Portfolio Analysis

V. Strategies and Implementation of Strategies

A. Marketing Mix Strategies

1. Pricing Strategies
2. Product Strategies
3. Promotion Strategies
4. Distribution Strategies

B. Growth Strategies

1. Penetration Strategies
2. Product-market expansion Strategies
3. Vertical integration Strategies

C. Differentiation

D. Diversification

E. Global Strategy

VI. Recommendation and Conclusion

VII. References

I. Executive Summary

The United Colors of Benetton: a company of colors and controversies. Offering the world an insight to fashion, as well as, human equality and world issues, Benetton gives us stylish clothing and innovative promotion. While trying to capture an audience favoring Italian character in style and design, the company additionally desires to present the world with contentious campaigns to awaken thoughts and debates. These controversies are jeopardizing Benetton′s position in the industry, and its reputation of being trendily unique and committing to world harmony.

II. Introduction

The United Colors of Benetton (Benetton), an Italian based company, is primarily focusing its business on clothing and controversial advertising. Presented all over the world, the company is available to young and old in combined colors and stylish fashion. In the following pages a complete internal and external analysis of the company will be explained, as well as, a description of the company′s overall standing. The alternatives as seen are described to include the advantages and drawbacks of each alternative. Conclusively, a recommendation based upon all of the findings outlined is prescribed.

III. External Analysis

A. Customer Analysis

Benetton sells women′s and men′s apparel, accessories, shoes and fragrances to clients that are mostly fashion-oriented women and men between the ages of twenty to thirty-five. Color′s is published in three editions and four languages, with a website that is both popular and praised by critics. The magazine is bi-monthly and reaches young people all over the world. Benetton is an interesting trans-national corporation that truly has a social conscience and tries to employ models who look like the human race--even featuring gay models who are HIV positive.

B. Competitor Analysis

The clothing industry is a very broad industry selling products ranging from pants and shirts to accessories. It is affected by the la test trends in design, models, colors and styles, and also by consumer preference. There are several similar companies selling comparable products, so competition is incredibly fierce. Benetton does not outsource any of its procedures, but is in charge of design, production and distribution. It is therefore difficult to compare the company with other organizations in the same industry since competitors can be smaller and concentrate on only one aspect of the commercial chain. Consequently, Benetton’s competitors were selected by viewing the www.hoovers.com web site. According to the organizations available here offering approximately the same products as Benetton the main competitors are Industria de Diseno Textil (Inditex), GAP and Hennes and Mauritz (H&M). It is assumed that these three organizations are Benetton’s closest competitors due to the fact that they target the same consumer segment. According to the CBS Market Watch the competitors are not all present in exactly the same industry due to the fact that Benetton and Inditex actually produce clothing and fabrics, design and retail fashion products, while GAP only retails, and H&M retails and designs its goods.

It is assumed that the exact industry is irrelevant because all companies still aim for the same target market and therefore compose a threat to Benetton. Furthermore, all four organizations originated from four different countries, but this is also looked at as unimportant because they are a global company with global customers.

1. Inditex 

Inditex is the closest competitor to Benetton because it is present on the stock market and it also designs and retails its fashion. It is a global company with more than 1,300 shops in almost 40 countries. It is most popular in Europe, just like Benetton, perhaps due to its origin: Spain. Inditex introduces new products by answering to popular trends presented by customers. The company has a larger market share than Benetton in the clothing and textile industry with sixty-eight percent compared to Benetton’s twelve percent (CBS Market Watch). This could be as a result of Inditex’s six banners compared to Benetton’s five, and also because of the fact that Benetton has been having several difficulties selling its products after its highly noticeable marketing campaigns were banned in several countries.

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