Analysis Report of Benetton Company - Essay Example

Analysis Report of Benetton Company Introduction Benetton is the largest clothing manufacturer in Europe and the largest consumer of wool in the clothing sector. The group has 120 subsidiaries in different parts of the world and over five thousands sales outlets which generate more than 2 billion Euros annually. The growth of the company can be attributed to intense diversification of its operations, an aspect that has contributed immensely in reducing the risks and uncertainties associated with concentrating on a single market (Mullins & Walker 2013).

CompetitorsThe company’s major competitors are Industria de Diseno Textil (Inditex), GAP, and Hennes and Mauritz (H&M). These are multinational companies that have been able to segment the market, position themselves strategically in the market, and attract the loyalty of the customers towards their products. In addition, these firms have outsourced their operations to different parts of the world. As a result, they are able to produce products at very low prices, an aspect that has been inserting pressure on Benetton Company to come up with an effective pricing strategy in order to retain its competitive advantage in the market (Maguire 2007).

The companies are considered a threat to the future of the business. This is because they target the same market segment. In addition, they have a huge financial base which enables them to afford the rising advertising costs by the traditional media houses. In addition, they have diversified their operations to different markets across the world, an aspect that makes them to be financially stable (Maguire 2007). PublicBenetton mainly sells women’s and men’s apparel, accessories, fragrances, and shoes.

These are clients that are fashion-oriented and have a disposable income which can be used to purchase high-quality products by the firm. The major target market by the company is the young people. This generation accounts for the largest market segment in the whole population. The firm targets the young people who are at the age of twenty to thirty five. Through its internationalization program, the business has a customer base which emanates from different parts of the world. As a result, it publishes its magazines Colors in three editions and four languages.

This is in an attempt to reach all customers irrespective of their race, gender, religion, and cultural background (Kapoor & Kulshretha 2012). This aspect has played a significant role in enabling the business to remain competitive despite various economic challenges in the world. Political, legal, and regulatory analysisOver the years, the Benetton Group has always been able to maintain high levels of transparency, thereby, confronting various advances regulations of corporate conduct. For instance, after the implementation of Regulation for Markets Organized and Managed by Borsa Italiana SpA, the board of directors was able to come up with a code of conduct to tighten timing and improve strict securities than the new law.

However, the company has been marred with various controversies with the latest one being the Institutional Campaigns. The advertisements had pictures of priests kissing, body parts that were labelled as HIV positive, and military cemetery that were filed with corpses. (Some of controversial adverts by Benetton Group that raised moral eyebrows) (Burgoyne 2011). This forced the Advertising Councils in different countries to ban these adverts. This aspect had a major impact on the reputation of the business in the market.

Marketing StrategyThe company has been spending a large part of its revenue in advertising its products in the global market. However, social media provides a cheaper alternative to reach the global market. Therefore, the firm should change its attention towards social media marketing. This is because the platform is cheap and provides the organization with an opportunity to interact with the customers, conduct a research on their consumption behaviour, and understand their grievances (Books24x7 2005).

This is significant in incorporating these grievances in the production process, an aspect that would play a significant role in increasing customer loyalty.ReferencesBooks24x7. 2005. Why some companies emerge stronger and better from a crisis: 7 essential lessons for surviving disaster. New York: American Management Association. Burgoyne, P. 2011. Creative Review - Benetton wants the world to UNHATE. Retrieved from http://www.creativereview.co.uk/cr-blog/2011/november/benetton-unhateKapoor, A.

, & Kulshretha, C. 2012. Branding and sustainable competitive advantage: Building virtual presence. Hershey, PA: Business Science Reference. Maguire, M. 2007. United colors of Benetton - A company of colors and controversies. München: GRIN Verlag GmbH. Mullins, J. W., & Walker, O. C. 2013. Marketing management: A strategic decision-making approach. New York: McGraw-Hill.