Benetton Summary

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1.B7801Benetton SummaryOperations ManagementBenetton has created a “machine” (operating system) for effectively servicing itstarget market. It provides end customers what they want (colorful fashion, highquality), when and where they want it (convenient, city-center stores) at a price thatcreates value for consumers and high returns for Benetton and its agents/shopowners.Target Market/Channel- Young, fashion-oriented- High variety (colors)- High quality/moderate price- Autonomous agent network, easy-to-operate store formatOperational Requirements (What they need to do well.)- Flexible production process- Responsive, reliable logistics and information/planning systems- Competitive cost/qualityConfiguration/Capabilities (How they do it.)1) Industrialization of key steps to achieve high quality and economies of scale:- centralized procurement/manufacturing- automated knitting/dyeing- centralized distribution- product development & global advertising- “We gave kept the same strategy all along - to put fashion on an industrial level.”2) Use of technology, subcontractors and agents to provide flexibility andresponsiveness:- garment dyeing- flexible assembly and finishing subcontractor network- flexible store development and operations network3) A focus on key components of the operation that limit the scope of Benetton’sresponsibilities and provides for a consistent pattern of investment and processdevelopment:- focus on limited set of functions (prod. dev., procurement, dyeing, distribution)- focus on capital/technology-intensive operations not labor-intensive operations.- focus on wool processing and knitting technology.- global product- standardized, simplified store format- logistical and information systems expertise to support store operationsStrong synergy between marketing and operations strategies- Market positioning matches Benetton’s operational capabilities very well6 March 1998

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- automated knitting/dyeing - centralized distribution - product development & global advertising - “We gave kept the same strategy all along - to put fashion on an industrial level.” 2) Use of technology, subcontractors and agents to provide flexibility and responsiveness: - garment dyeing - flexible assembly and finishing subcontractor ...

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