Submitted by Chaitali Ranae P.

Manikandan Rakesh Sharma Santosh Kumar Sheetal Balid

28

Started as a typical cottage industry firm in 1960. It exceeds $1 billion of revenue on 1988. Main business:- Production and sales of woolen garments. Produced about 45 million garments a year and sold them through 7 ,000 retail outlets round the world.

Design Purchase Manufacture Warehousing Distribution

Styling and design is done by many freelance designers Guiliana Bent ton is one of the company "interprets" the creations of these designers and turns them into models and produce 600 styles in every seasons Finally 50 styles selected in the 'hit styles' presented in the fashion shows of the season.

Largest purchaser of wool tread (10 million kg/yr) Centralized process

Stages of manufacturing Knitting Assembly Dyeing Finishing

90 to 95% is done by external subcontractors There are 200 subcontractors 70-80 in knitting 100 in assembly 20 for finishing Dyeing is 100% in-house

Nearly all of them are located in same geographical region Benetton specifies the machines subcontractor use Provides financing and easy payment scheme to enable subcontractors to purchase them

By early 80s,

Company established 31 shops in Japan and 27 U.S. They sold through 7,000 retail outlets throughout the world.

Key players in distribution process:There

are about 80 agents throughout the world, coordinated by 7 area managers None of these agents are the employees of Benetton and they work on commission basis. The agents then recruit shop-owners and help them with the set up.

The shop-keepers are required to follow the strict merchandising rules such as:The

shop has to be exclusively Benetton The look and layout of the shop is standard and defined by benetton Furniture to be used in the shop must be provided by one of the three designated Italian suppliers

Tile

advertising material is to be supplied from the headquarters Even minor achievements in local newspapers have to be approved by Benetton No discount sales are permitted Shop maintain no inventory Everything must be displayed on shelves at all the times.

The company has one single central warehouse in Italy Goods are shipped directly from the warehouse to the shops, not even through agents There are no other warehouse.

The fall/winter season runs from early September through December. Guiliana Benetton finalize the styles to be offered that season, as described earlier. Agents inform to shop-owners, getting them to commit orders. Although major commitments are made up to seven months before the selling season, there are several on-line adjustments which are made as the season unfolds.

At the beginning of the season, upto 30% of the total orders from each shop can be unspecified colours. Further, during the last one-third of the selling season, a process called reassortment It allows shop owners to add orders to their original order, based on what items are selling well in the first two-thirds of the season

The company has subscribed to General Electrics Value Added Communication network available in 250 cities in 25 countries. Agents are required to keep constant touch with the headquarters. Orders from store to headquarters are transmitted over this network. Finance related information of the stores are not put on companys information system.