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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Background Contd...

While Luciano handled marketing, Guiliana was in charge of design, Gilberto looked after administration and finance, and Carlo managed production. Also in 1966, they hired French designer Lison Bonfils, who worked with them for 10 years.

In 1969, the Benettons opened their first boutique in Paris. The shop in Paris also did very well with its popular styles, availability of a wide range of colors and affordable prices. Following the success of the Benetton outlets, the Benetton family bought the Villa Minelli4 in 1969, which became the company's head-office in the mid-1980s. In 1972, Benetton engaged Eldorado, a publicity agency in Paris, to boost its popularity further. In 1974, Benetton bought the exclusive rights to use the name of a popular brand 'Sisley', a French clothing brand which had been launched in Paris in 1968. However, Benetton set up the brand as an exclusive line with its own team of creative and sales staff only in 1985. Sisley was aimed at the more fashion-conscious and trendy segments.

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In the late 1970s, Benetton started sponsoring sports teams. It sponsored the Trevisse rugby team in 1978 and Tyrell's Formula One team in 1983. In addition, in 1983, Benetton launched Tip-Top as its footwear brand.

To manage the increased number of clothing labels it had introduced as well as its overseas operations the Benetton family set up Benetton International Holding headquartered in Luxembourg, in 1985. By this time, Benetton had different labels for various age groups, all of which were sold under the brand, United Colors of Benetton. The labels were '0-12' with pullovers, trousers and shirts for children; 'Merceria' with pullovers, and shirts mainly for women; 'My Market' with pullovers and shirts, 'Benetton' with pullovers, trousers and shirts, and 'Tomato' with pullovers, trousers and shirts for juniors. In 1985, they bought the Toleman's Formula One team. The Benetton family took an important step forward for the company when they took it public in 1986...

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4] The Villa Minelli is a complex of sixteenth century buildings in Ponzano Veneto. The buildings with their large picture windows, high ceilings and original frescoes are of great historical and cultural interest. Over the past 500 years, the villa has been used as a monastery, a hospital, an orphanage, a bicycle repair shop, a silkworm farm and a World War II military base. It took architects Afra and Tobia Scarpa over 15 years to complete the restoration and modernisation of the entire complex.


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