Demanding buyers, fast-moving technologies, intense .global competition, deregulation, and social change create new challenges and opportunities for a wide range of businesses. Developing strategies in this environment of constant change is a key corporate success requirement.

The business" strategy pursued by Benetton Group SPA., the Italian casual wear producer, has enabled the company to successfully compete in the very competitive and rapidly changing apparel market.' After experiencing explosive growth, in the late 1980s management halted the expansion program because of weak demand in the United States . Benetton's growth priorities in the 1990s shifted to Latin America, eastern Europe, and Asia Management plans to open 300 new stores in China in the late 1990s. Strategy changes include upgrading the quality and expanding the range of goods in its core markets in Western Europe (70% of sales). Benetton lost market position in the late 1980s irate United States because of strong competition from The Limited and The Gap, conflicts with its retailers, adverse reaction to its controversial socially active "United Colors of Benetton" advertising campaign, and the termination of many licensing agreements with retailers. The number of U.S. stores fell from 800 in 1988 to only 150 in 1994. The Benetton corporate structure is quite flexible, enabling management to quickly adapt its strategies to new competitive challenges. Benetton's product designs and the cutting, dyeing, and packing are handled in-house. All other production is outsourced. This capability is important in the fast-changing world of fashions. Benetton has a 200-person design team and administrative offices in Pompano Veneto. Italy . The clothing items are produced in raw wool and cotton and-dyed at the time of shipment. This enables Benetton to respond quickly with colors that are in fashion. All of the more than 7,000 retail stores in 110 countries are. licensed to independent owners, who agree to purchase apparel from Benetton in return for using its name for the retail shop. The social-issues advertising campaign pushed the brand into a strong global position. One ad showing the Bloodstained clothes of a Bosnian war casualty created calls for a boycott in France and widespread attention throughout the world. The company continues to set growth records for both sales and profits, though it faces a continuing tough competitive averment. Business strategy consists of deciding the scope and purpose of the business, its objectives, and the actions and resources necessary to achieve the objectives. Marketing strategy is guided by the decisions top management makes about how, when, and where to compete. Because of this close relationship, it is important to examine the major aspects of designing and implementing business strategy. We begin the chapter with a look at the nature and scope of organizational change. A discussion of the sources of competitive advantage and the requirements for achieving advantage follows. Next, several key features of business strategy are considered. Finally, strategic analysis and strategy selection are discussed