Benetton has decided to reinvent itself by integrating and centralizing its global network of suppliers and distributors while defying conventional wisdom in the process (Camuffo, Romano, and Vinelli, 47). In response to a number of external influences, including enhanced competition, the aging of the firm's initial target market, and changing fashion trends, Benetton has determined that to remain competitive in the new globalized arena it must have firsthand contact with the end customer, respond in real time to market changes, and find new ways to ensure direct control over the supply and distribution chain.
Part of Benetton's strategy with respect to distribution is to enhance its communication with all actors in is value chain, to restructure its advertising efforts to less controversial, and to use ordinary people rather than models and celebrities in more conventional ads while still focusing on non-controversial themes as racial discrimination, poverty, child labor, and AIDS awareness (Benetton Group..., 3). Camuffo, et al (48) noted that Benetton's traditional approach of direct retailing to third parties for many years was one of its most successful distribution strategies. That strategy no longer seems able to sustain the company's presence in the market. The company risks seeing its locations suffocated by aggressive market penetration strategies of its international competitors whose retail outlets have a much larger average size. Under the aegis of the Retail Project, Benetton has opened over 100 mega stores around the world, developing a network of shops that are directly owned and operated by Benetton. Benetton (2) states that its goal in this strategy is to provide direct interaction with its major reference groups of consumers while providing new opportunities for capitalizing upon existing distribution relationships. The company has begun directing operations through a centralized retail system as well...