Benetton's Diversifications
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Case Code: BSTR145 Case Length: 18 Pages Period: 1980-2004 Pub Date: 2005 Teaching Note: Available |
Price: Rs.500 Organization: Benetton's Industry: Diversified Countries: Italy Themes: Unrelated Diversification |
Abstract Case Intro 1 Case Intro 2 Excerpts
Abstract
The Benetton family had its humble beginnings in a small town selling handmade sweaters. The handmade sweaters business gradually became a highly successful international clothing business. After achieving such success, in the late 1980s the family began diversifying into various other businesses. The family had set up Edizione Holding, a holding company, which held their clothing business run by the Benetton Group and all the other businesses they acquired. The case examines each of these diversifications and how they have fared. It looks into the issues each of these companies have faced and how they have dealt with them. Particularly, the case examines the problems Edizione holding faced with the Competition Authority, on diversifying into the motorway catering business and highway operation and management businesses.
Issues
The case is structured to achieve the following teaching objectives:
- Understand how a successful company can manage diversifications unrelated to its core business
- Understand the risks of a perceived synergy between the core business and unrelated diversification failing to materialize
- Understand the issues a company faces when two of the businesses it has diversified into are dependent industries
Contents
Keywords
Benetton Group, Edizione Holding, Benetton Sportsystem, Autogrill, Autostrade, Telecom Italia, 21 Investimenti, Italian Competition Authority, Benetton International Holding, United Colors of Benetton, Diversification, Organizational Culture, Host Marriott Group, Unrelated Diversification and Synergies
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