Zara vs. Benetton: Business Strategy and Market Performance Comparison

This report provides a comparative analysis of Zara and Benetton, two prominent players in the fast-fashion industry. It examines their business models, highlighting the differences in their supply chain management, marketing strategies, and market performance. The analysis delves into Benetton's historical dominance and subsequent decline, contrasting it with Zara's rise to global prominence. The report explores factors such as product development, store management, franchise systems, and the ability to adapt to changing fashion trends. It also investigates the impact of marketing campaigns, ownership structures, and revenue growth on their respective market positions. The report uses multiple sources to compare and contrast their approaches, providing insights into the strategies that have contributed to Zara's success and the challenges faced by Benetton in maintaining its competitive edge. The report also touches upon the significance of understanding consumer preferences and the ability to quickly respond to market demands in the fashion industry.

Running head: Management Quality 1
Zara vs. Benetton group of companies.
Name:
Institution:
Course Code:

Management Quality 2
Zara vs. Benetton group of companies.
Sarah Vizard (2013). Benetton aims to restructure for clearer differentiation between brands in
restructure. Retrieved September 9 2017.
https://www.marketingweek.com/2013/11/29/benetton-aims-for-clearer-differentiation-between-
brands-in-restructure/
Sarah Vizard (2013) Product development and store management is a function that has
worked across all its brands. The firm now seems like it will separate its teams and to work
separately on each brand. The teams will take decisions that will be based in boosting growth of
each brand instead of what might be best for the Benetton group as a whole. The Benetton’s
company also rules out a new concept of each brand and currently testing in-store
communication and merchandizing. This is a management strategy move aimed at rebooting the
Benetton group and to also help them stay in competition with the Zara group of companies.
United colors of Benetton are among the leading European fashion because it has edgy campaign
ads that worked on all stereotypes. It later lost its leading position to the Zara brand.
Reuters (2017). Italy’s Benetton’s group of names new boss to help revive brand. Retrieved
September 9 2017. www.reuters.com/article/benetton-management/italys-benetton-group-names-
new-boss-to-help-revive-brand-id-US16N1H002F
Benetton being an Italian clothing group named a new boss who is a fashion industry
expert. This is a plan to help revive its brand in the growing competition from rival brand Zara.
Benetton has really suffered over the years has finally decided to hire someone who is an expert
in the fashion industry to revive their suffering wholesale department. The company is now
embarking on rebuilding and restructuring that will be aimed on reducing its losses and taking its

Management Quality 3
place once more as a leading fashion brand in the world. This is a good move to keep its rival the
Zara brand on its toes. In the 1980s Benetton group was the leading group in fashion, it has
however not being able to compete with rapid trendier rivals such as Zara.
Tony Barber (2012). Benetton’s tactics miss the big picture. Retrieved September 9 2017.
https://www.ft.com/content/4533f712-8466-11e1-a3c5-00144feab49a
The Benetton group franchise system used to work initially when the company was still
at its young days. It later lacked capital to enable it to operate in its own stores. This system later
became the companies’ weakness that helped its competitor the Zara brand to take it spot
globally as the number 1 fashion brand. The companies lack of control on how to independently
distribute to a lot of countries and manage how it sold its merchandize. In fact it was an able to
go hand in hand with the new upcoming changes and trends alike the Zara brand. Its competitor/
rival brand Zara happened to learn from Benetton’s mistakes by being able to easily respond to
fashion changes in bringing new products to the maket monthly.
Maelle Alquezar (2013). Why Benetton’s has failed to boost its popularity. Retrieved September
9, 2017 www.wolfestone.co.uk/blog/why-benetton-has-failed-to-boost-its-popularity/
The famous fashion symbol has been falling behind for a while now. Its major mistake
was the lack of ability to bring in new products to the market in over two years while its rival
Zara was releasing its products on a monthly basis. In the 1980s Benetton’s was famously known
for its marketing campaigns that encouraged diversity. The company got comfortable in the
leading position while other fashion brands worked hard and finally beat them and got the
leading position. Other factors that contributed to the fall of Benetton’s group of companies is by
not owning up to 75% of its shops all over the world while the Zara brand owns all its shops in

Management Quality 4
the globe. In the past 10 year Benetton’s has only grown 2% percent while its rival the Zara
brand grows 10% each year making boosting its brand revenue higher up than that of Benetton’s.
Bright Kite (2012). Compare and contrast the supply chain management Approaches take by
H&M, Benetton’s and Zara. Retrieved September 9, 2017
https://brightkite.com/essay-on/compare-and-contrast-the-supply-chain-management-approches-
take-by-h-m-benetton-zara/
Benetton’s and Zara are both garment brands that are competing on which brand is better
than the other. They are fast fashion providers and their clothes are not made from exceptional
quality, it is just important for them to deliver cat walk designs and quickly seen in shops and
sold at a very reasonable and affordable price. Benetton’s have high quality type of clothes and
are relatively sold at a higher price. The problems with the Benetton’s brand that fails them and
keeps their rival the Zara brand ahead of them is Benetton’s brand are neither fashionable nor
trendy. The target market seems to respond to fashionable and trendy garments that change with
time. These two companies operate in the same environments and are expected to offer
fashionable and trendy products over a very short period of time. For the fashion industry to be
successful, designs have to be made from the right cut, color and pattern. This is something that
fails in most fashion companies.
Suzy Hansen (2012). How Zara grew into the world’s largest fashion retailer. Retrieved
September 9 2017. www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-
largest-fashion-retailer.html
It is normally great when developing long term strategies for identifying advantages on
management in garment companies. The outward modesty of the company shows it its works,

Management Quality 5
employees and even surroundings. The company initially imitates the new fashions and trends
and they quickly bring them to the market at a cheaper price. This strategy has gone a long way
in helping the Zara brand to rise unlike the Benetton’s group that continues to sell at high prices
and does not flow with the new fashions and trends. By being able to reach their target market
Zara has been able to rise and own numerous stores in over 85 countries in the world. Using
these strategies the Zara brand has been able to satisfy the client’s expectation thus making it
very popular among people from different countries that tend to shop more on the Zara brand
than that of the Benetton’s.
Emerald Insight (2015). Fast fashion goes global: Benetton’s changing strategy. Retrieved
September 9 2017 www.emeraldinsight.com/doi/abs/10.11081/SD-09-2015-0131?
journalCode=sd
In order to trace Benetton’s group development and find out the causes for its decline
from the fashion world, one must be able to understand how and where it all started. In the 1980s
it became the leading fashion mogul in the world with its retail shops all over the world. Its
competitors were way below them in terms of sales and type of materials. Benetton’s continued
to gain its popularity through its ways of advertising and the ability to diversely attract different
people in the word. Benetton’s however did not take the risk of trying out new tends and in the
1990s its rival Zara brand started to rise closely and with time it started becoming a fast fashion
and it overtook Benetton’s and remained on top till now.

Management Quality 6
A, Palladino (2010). Zara and Benetton’s: Comparisons of two business models. Retrieved on
September 9, 2017 https://upcommons.UPC.edu/bitstream/handle/2009.1/9620/67041.pdf?
sequence=1&isAllowed=y
The Zara brand has a high degree character compared to other international competitors.
Its business model is very different from other companies that are working in the same industry
and this is what has led to its success. Zara brand mostly focused on its European clients because
of its style and consumer taste. It also uses joint ventures for its important and is markets while
the Benetton’s focuses mostly on the material of the garments. Getting fashion while it is still hot
has creating a very large margin between the two companies. Zara is able to make full prices on
sales with very minimal discount compared to Benetton’s that wants to retain its high society
class and putting high prices that would not cater to all customers.
References

Management Quality 7
A, Palladino (2010). Zara and Benetton’s: Comparisons of two business models. Retrieved
on September 9, 2017
https://upcommons.UPC.edu/bitstream/handle/2009.1/9620/67041.pdf?
sequence=1&isAllowed=y
Bright Kite (2012). Compare and contrast the supply chain management Approaches take by
H&M, Benetton’s and Zara. Retrieved September 9, 2017
https://brightkite.com/essay-on/compare-and-contrast-the-supply-chain-management-
approches-take-by-h-m-benetton-zara/
Emerald Insight (2015). Fast fashion goes global: Benetton’s changing strategy. Retrieved
September 9 2017 www.emeraldinsight.com/doi/abs/10.11081/SD-09-2015-0131?
journalCode=sd
Maelle Alquezar (2013). Why Benetton’s has failed to boost its popularity. Retrieved
September 9, 2017 www.wolfestone.co.uk/blog/why-benetton-has-failed-to-boost-its-
popularity/
Reuters (2017). Italy’s Benetton’s group of names new boss to help revive brand. Retrieved
September 9 2017.www.reuters.com/article/benetton-management/italys-benetton-
group-names-new-boss-to-help-revive-brand-id-US16N1H002F
Sarah Vizard (2013). Benetton aims to restructure for clearer differentiation between brands
in restructure. Retrieved September 9 2017.
https://www.marketingweek.com/2013/11/29/benetton-aims-for-clearer-
differentiation-between-brands-in-restructure/

Management Quality 8
Suzy Hansen (2012). How Zara grew into the world’s largest fashion retailer. Retrieved
September 9 2017. www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-
worlds-largest-fashion-retailer.html
Tony Barber (2012). Benetton’s tactics miss the big picture. Retrieved September 9 2017.
https://www.ft.com/content/4533f712-8466-11e1-a3c5-00144feab49a