Diversification Strategies Case Study

UCB: Expanding through Unrelated Diversification

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Abstract:
United Colors of Benetton (UCB), the reputed international fashion house from Italy, is losing its shine. UCB, founded in the year 1965, has had a bullish trajectory right from its inception. It has presence in many parts of the world and its apparels and accessories were much sought after by the global customers. At a point of time, when the competition in fashion industry was limited, UCB was the manifestation of not only Italian fashion houses but the entire Europe's. However, with many players entering the arena and competition intensifying, the family-owned UCB was losing steam. The company which was ranked within the top 200 family-owned business in the world was struggling. Its attempts to diversify its brand were not paying off. The revenues started to plummet and the family-owned company decided to open its share to outsiders. The company also started diversifying into unrelated sunrise ventures like infrastructure and aviation. Whether this attempt to revive the family's fortune would pay-off, is yet to be seen.

Pedagogical Objectives:

• Trends in the European fashion industry
• UCB’s growth in its apparel business
• Need for diversification
• Analysing UCB’s diversification strategies
• Can UCB sustain a diversified profile?

Keywords : UCB; United Colors of Benetton; Acquisition; Diversification Strategies Case Study; Family Business; Benetton group; Fashion Apparel; European Fashion house; Luciano; Perfumes; Mergers; Unrelated Diversification