Benetton's Diversifications

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Case Details:

Case Code : BSTR145
Case Length : 18 Pages
Period : 1980-2004
Organization : Benetton's
Pub Date : 2005
Teaching Note : Available
Countries : Italy
Industry : Diversified

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"You take Benetton's power, its extremely efficient sourcing and distribution, and its knowledge of world markets, and you apply that to brands like Nordica, and you can develop a sports clothing brand as well as a sports brand“1

- Keith Wills, retail analyst at Goldman, Sachs & Co. in London, commenting on the sale of Benetton Sportsystem to the Benetton Group by Edizione Holding.

"Ah, being purchased by Benetton: the kiss of death."2

- Matt Titus, a former product manager at Oxygen Skates, a competitor of Rollerblade's, commenting on sports equipment companies purchased by Benetton.

“I know we would be better off giving details, but I don't want to make pronouncements we can't respect, especially when we don't know the company well.” 3

- Marco Tronchetti Provera's (CEO, Pirelli) response when asked about Pirelli and Benetton's plans for their new acquisition, Telecom Italia.


Since the 1980s, the Benetton family has diversified into several businesses through acquisitions by its holding company Edizione Holding (Edizione). These businesses are unrelated to its core business of clothing and accessories.

The Benetton family entered the areas of sports equipment through Benetton Sportsystem; food outlets and catering through Autogrill; motorways construction and management through Autostrade; the telecom business through Telecom Italia; and merchant banking and private fund management through 21 Investimenti. Some of these acquisitions proved profitable, while the others lost money for the parent company. Some of the acquired companies were later sold.

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Not only did Benetton lose money through some of these acquisitions, but it also had to face investigations by the Italian Competition Authority for anti-competitive practices and non-compliance with the stipulations regarding acquisitions.


The Benetton family comprised four siblings - Luciano, Giuliana, Gilberto and Carlo. In the early 1960s, they started a sweater business out of their home in Ponzano Veneto, a small town 30 kilometers north of Venice, Italy. The business began with Giuliana knitting the sweaters at the kitchen table, but as the business grew she became responsible for design and fabrication, and Luciano took up the responsibility of marketing and sales. Luciano went to England to study a new technique of dyeing; instead of dyeing the yarn, the sweaters were dyed after they were made.

That way, the sweaters could be dyed in the colors that were popular and in fashion. In 1963, the Benettons began opening their own shops in Italy and created a network of exclusive distributors using subcontractors. In 1965, the Benetton Group was established and the first factory was set up in 1966. This was a true family business, as all four siblings were involved in various capacities.

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1] “A cozy deal at Benetton?”, July 17, 1997.

2] Paul Hochman, “The Brand Killer,”, April 30, 2002.

3] Financial Times, August 1, 2001.


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