In times of globalisation, engineering progress and extremely aggressive competition as well as continuous growth of dynamic and complexity within business, strategic changes are crucial for organizational surviving. Consequently, organisations have to be permanently harmonized with their environments to react to external developments effectively and to form the business proactively so they are operated in timely.1 As an excellent example for global expansion by successful management of strategy changes, the Benetton Group is classified.
Benetton is an Italian producer of high quality design clothing, which is active since the early 1960s. The company started as a family business and until today, the family of Benetton has the control over the firm. The company is not only famous for its high quality and sophisticated design, as it is known for its advertisement campaigns against racism, discrimination and ine-quality. In the 1980s, the Italian photographer Oliviero Toscani started to work for the Benet-ton Group as the designer for the marketing campaigns. Within several years, the advertise-ments of Benetton were not only about cloths, as the fight against racism and discrimination became almost more important than the clothing itself. The company did even change its name in order to express their fight against inequality in the world, into United Colors of Benetton.2
Major aim of this report is to clarify the essential importance of strategic change management on the basis the successful story of Benetton Group. The report contains several chapters that highlight the strategic changes of the company in the past and in the future, which gives infor-mation about the Benetton Group and shows the strengths and weaknesses of the company in comparison to the market. Thereby, chapter two contains information about the past and future strategic development of the company.
Table of Contents
1 Introduction
2 Strategic development of Benetton Group
2.1 Strategic profile of Benetton Group
2.2 Classification of Benetton Group´s strategic development
3 Strategic change of organizations
3.1 Strategic change
3.2 Strategic change of Benetton Group
4 Product-market choices of Benetton Group
5 SWOT – Analysis of Benetton Group
6 Conclusion
Objectives and Topics
This report aims to examine the essential importance of strategic change management through the case study of the Benetton Group. It analyzes how the company has navigated past and future strategic developments, evaluates its current market position using the Ansoff matrix, and identifies organizational strengths and weaknesses through a SWOT analysis to determine the factors behind its long-term success.
- Evolution of Benetton's strategic business profile
- Distinction between revolutionary and evolutionary strategic changes
- Application of the Ansoff product-market strategy matrix
- Analysis of global distribution and franchise models
- Internal and external factors influencing future growth
Excerpt from the Book
2.2 Classification of Benetton Group´s strategic development
According to de Wit, there are two different approaches to change a firm-strategy. Firstly, in a discontinuous way where a fast changes of the basic strategy takes place in a very short time. Those changes are irregular in appearance. Due to the high speed and the irregular appearance, organizations might face some problems. According to de Wit, the major problem is the missing stability for the organization and strategy, as HR and organizational problems can occur after a major change. Many companies collapse after such a major change.
Secondly, there is the way of continuous enhancements for the organization and strategy. This way is less dangerous than discontinuity because it is an ongoing development, which presents safety for the organization and employees. However, there are as well some disadvantages. Organizations face too less innovations and a danger for getting too inflexible to react on environment-based changes like new laws. In spite of everything, this way is seen as the best for organizations, as continuity normally leads to better outcomes than impulsive actions or reactions. In theory, this is compared with a marathon run in which only one can win with continuity and not with short speeds and many breaks.
Coming back to the main question which way was chosen by Benetton. Benetton chose a mixture of both ways in its long history. The company reached a continuous way of growth and boosted it with some innovations and strategy changes. These changes are partly based on discontinuity and partly on continuity. Benetton found a way to link both in a reasonable and functional way in order to achieve objectives efficiently. This was constantly proven by Benetton’s success.
Summary of Chapters
1 Introduction: Provides an overview of the report's purpose, emphasizing the role of strategic change management in the context of the Benetton Group.
2 Strategic development of Benetton Group: Outlines the historical development of the company, from its origins as a family business to its international expansion and franchise model.
3 Strategic change of organizations: Defines the theoretical concepts of revolutionary and evolutionary change and analyzes how Benetton applies these within its business operations.
4 Product-market choices of Benetton Group: Uses the Ansoff matrix to explain Benetton's growth strategies regarding market penetration, development, and diversification.
5 SWOT – Analysis of Benetton Group: Conducts a SWOT analysis to evaluate the company's internal capabilities and external market opportunities and threats.
6 Conclusion: Summarizes the key findings regarding Benetton's ability to maintain success through balanced strategic management and consistent organizational purpose.
Keywords
Benetton Group, Strategic Management, Strategic Change, Revolutionary Change, Evolutionary Change, Ansoff Matrix, SWOT Analysis, Franchise Model, Global Expansion, Business Reengineering, Fashion Industry, Organizational Development, Market Development, Value Chain, Brand Strategy
Frequently Asked Questions
What is the core focus of this case study?
The report focuses on the strategic evolution of the Benetton Group, examining how the company has managed internal and external changes since its foundation to maintain a global competitive position.
What are the primary themes discussed in the report?
Key themes include strategic change management, the classification of organizational growth, international business expansion, product-market strategies, and the competitive environment of the global fashion industry.
What is the main research goal?
The primary objective is to clarify the importance of strategic change management using Benetton as a successful example, while highlighting its strengths, weaknesses, and future opportunities.
Which scientific framework is applied to the analysis?
The study utilizes de Wit's theories on discontinuous versus continuous strategic change, the Ansoff product-market strategy matrix, and a comprehensive SWOT analysis to evaluate the company.
What topics are covered in the main body?
The main body covers the strategic history of Benetton, the theoretical background of organizational change, detailed product-market choices, and an evaluation of the company's internal and external environments.
Which keywords best characterize the work?
The work is characterized by terms such as strategic change, reengineering, Benetton Group, global expansion, SWOT analysis, and fashion retail management.
How does Benetton manage its production flexibility?
Benetton achieves flexibility by postponing the dyeing process of garments until market demand and color trends are clear, allowing for more responsive and effective production cycles.
Why did Benetton's expansion in the US face challenges between 1988 and 1995?
The company faced a setback because its brand was perceived as having a "too European" image that did not resonate with American consumers who were looking for different local dress styles.
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- Olga Sokolowski (Autor), 2010, International Strategic Leadership: Case study of Benetton Group, Múnich, GRIN Verlag, https://www.grin.com/document/168125
