To Our Readers

In retailing, managing the supply chain effectively is crucial to success. In fashion retailing, the supply chain must not only be efficient and cost-effective, it must also be responsive so that changes in fashion trends can be quickly incorporated into the merchandise. Benetton, the Italian clothing company learnt this the hard way. Once a leader in fashion retailing, it saw its dominance vanish in the face of ‘fast fashion’, where nimbler rivals such as Zara and H&M came out with several collections every year, filling their stores with new merchandise frequently, even as Benetton continued with its practice of offering just two collections a year.

Our case in focus in this issue, “Benetton’s Dual Supply Chain System”, discusses the supply chain system implemented by Benetton in 2004 to deal with this problem. Under the new system, production was carried out in different locations depending on the time required to market the product. The dual supply chains used by Benetton consisted of a ‘sequential dual supply chain’ which was used to supply garments ordered by the stores at the beginning of the season, and an ‘integrated dual supply chain’ which was used to satisfy pull-based demand, i.e., demand that arose during the season. With this, Benetton was able to bring out more collections per year, in keeping with the demands of ‘fast fashion’.

The Indian IPO market, in tandem with the secondary market, underwent a significant transformation in the first few months of 2008. Until then, the markets were characterized by unbridled optimism, and all that one could hear was talk of the Indian growth story. Some companies took advantage of the sentiment by raising as much cash as they could from the market—and, the exuberance in the market meant that huge sums could be raised, even with absurdly overpriced offers.

However, when the secondary markets tanked in late January, the repercussions were felt in the IPO market as well. An IPO for Reliance Power, which opened about a week before the market crash, was oversubscribed 73 times; however, when the stock listed, it traded at much below the offer price. Other IPOs were withdrawn, owing to poor response from investors, and it looked like the days of easy money from the primary markets were over. The case study “The Indian IPO Market in Early 2008” discusses how this situation came about.

The third case study in this issue of Case Folio is “Destination Marketing: Tourism Australia’s Controversial Campaign”. The “So Where the Bloody Hell Are You?” campaign was meant to project Australia as a rough and wild but friendly place. However, many people took offence at the words ‘Bloody Hell’ and the campaign was even banned in some countries—surely, something exceptional for an advertising campaign. The campaign was eventually pulled, to be replaced by ‘Australia invites you to get involved’—a less offensive, but much blander campaign.

- S S George