2019

United Colors of
Benetton
CSB STUDENT:
ELENE CHACHUA
 1) Is Benetton multinational enterprise?

In order to answer this question, firstly, we need to know the definition of multinational enterprise. A
multinational corporation (MNC) has facilities and other assets in at least one country other than its
home country (They are operating in more than one country). Such companies have offices and/or
factories in different countries and usually have a centralized head office where they coordinate global
management. Very large multinationals have budgets that exceed those of many small countries.
Multinational corporations are sometimes referred to as transnational, international or stateless
corporations. (Chen, 2019)

According to this definition, Benetton definitely is not multinational enterprise. Even though, they have
lot of branches around the globe, they mainly manufacture their goods only in Italy. It means that
Benetton is export company rather than multinational enterprise.

2) What are the country-specific factors that have boosted Benetton’s success?

There are several things that have boosted Benetton’s success:

• Italy is home country of Fashion, which is great place to start clothing business. Also, people are
already skilled and know how to make clothes, so it is easy to find relevant workforce;
• Benetton is mainly popular, profitable in Europe, almost half of its profit comes from European
countries. This means that Italy is somehow geographically ideal for them as well;
• It is a well-known fact that Italians are family oriented, they more value their own heritage, So
they would value local businesses more rather than exported goods or foreign corporations;
• Another thing may be that, some highly developed European countries such as Germany,
France, Austria, Belgium and i.e. have harsher tax policies than Italy; this might be an advantage
for a business operating in central Europe.

3) What are Benetton’s firm-specific advantages?

There are a lot of firm-specific advantages:

• First of all, Benetton is still a business owned by family, which subconsciously makes good
impression on customers. (as it shows that loyalty and trust exist within the company)
• They have really good marketing campaigns. As mentioned in text, they even have made some
charity activities, financed formula 1 and i.e.
• Raw materials come from their own source, as they own sheep (in Argentina they have lands)
and control the quality themselves.

Bibliography
Chen, J. (2019, February 14). Retrieved from Investopedia:
https://www.investopedia.com/terms/m/multinationalcorporation.asp