27 October, 2003
© Beep Knowledge System and case owners, 2002-2003
Digital SMEs Cases
Executive
summary of the case:
Timing of case
The strategy was the introduction of a new business model: the “fully
web integrated company”.
This shift was carried out by the implementation of ICT tools over the
already existent traditional network of connections.
Geographic setting
BasicNet S.p.A. is a sportswear and free time clothing Italian company
based in Turin (Piemonte Region),
Type and use of ICT
Development of KOS (Kappa Operating System)
Trading companies are to be equipped with:
A person responsible for the operating system
Hard Contact: efficient Internet connection, ISDN
e-mail and video-conferences
Intranets
Main contributors
The Group represents a network integrating over the Web several small
firms into a unique company. Manufacturing, wholesale distribution and
local marketing are outsourced to independent businesses, licensee by
the Group, which co-ordinates the growth strategies.
Main beneficiaries
The Group represents a network integrating over the Web several small
firms into a unique company. Manufacturing, wholesale distribution and
local marketing are outsourced to independent businesses, licensee by
the Group, which co-ordinates the growth strategies.
Background
BasicNet S.p.A. is a sportswear and free time clothing Italian company
based in Turin (Italy), marketing Kappa, Robe di Kappa and Jesus Jeans.
The Group represents a network integrating over the Web several small
firms into a unique company. Manufacturing, wholesale distribution and
local marketing are outsourced to independent businesses, licensee by
the Group, which co-ordinates the growth strategies.
BasicNet aims at becoming a global supplier of informal clothing and footwear
for sports and leisure activities, adopting the business model of the
“fully web integrated company”.
Objectives
- Creating an harmonised organisation, within the network, where shared
information on a real time basis works towards accelerating decisional
flows and transactions, with the ultimate objective of shortening the
lead time.
- Integrating all the supply chain processes in a modern IT platform developed in-house by the BasicNet Group and perceived as “a digital nervous system”.
Resources (apart from ICT)
8 Group companies that manage the network and its activities, 37 Licensees
and 3 trading companies.
Activities
The BasicNet Group develops and co-ordinates the network, supervising
its critical building blocks:
- Trademark and product positioning;
- communication and marketing strategy;
- product enhancement and industrialisation, creative thinking, R&D;
- product procurement; sourcing centres;
- network development and operational management
In the production process each business block constitutes a “dot.com” division performing a single process and interacting with other blocks divisions within the same network by using only on-line transactions.
Outputs and results
BasicNet uses the ICT platform developed not only to communicate with
customers and partners but also, and more importantly, to manage the entire
product process and the core business activities.
Consolidating its web-oriented vision BasicNet has restored the brands
international dignity, reached new markets and quadruplicate its earnings.
Lessons and conclusions
The strong entrepreneurial vision of BasicNet’s top management is
a key element in order to move “into the fully web integrated company”
model. Another key factor is the climate of trust between BasicNet S.p.A.
and the network of companies, franchisees and trading companies.
Case
description:
Background
BasicNet S.p.A. is a sportswear and free time clothing Italian company
based in Turin (Piemonte Region), licensee of three of the most important
world clothing brands: Kappa, Robe di Kappa and Jesus Jeans.
BasiNet was born in 1984 when Maglificio Calzificio Torinese and its brands were purchsed by Basic merchandise S.r.l, established in 1983.
The first of these two, Maglificio Calzificio Torinese,
was established in 1916 and its evolution, through the century, has gone
through several events.
During Second World War the company has been able to survive converting
its production to clothing for military forces. During the 60s, thanks
to very innovative ideas, has been completely renewed and transformed
from the simple production of underwear to one of the most active and
modern youth sportive clothing firms.
It’s during the sixties that Jesus Jeans and Robe
di Kappa brands born and Maglificio Calzificio Torinese started moving
towards what will be the most important factor of success in Italy and
Europe: the sportive sponsorship.
The 80s constitute the most successful time for Robe di Kappa culminating
with the sponsorship of several Italian and European football teams and
especially the U.S. athletics national team during the 1984 Los Angeles
and 1988 Seoul Olympic games. 1988 constitutes the beginning of negative
trends for the company which, because of a series of negative events,
comes to failure the year after.
At the failure auction sale, in 1984, Maglificio Calzificio
Torinese and its brands are purchased by Basic Merchandise S.r.l., established
in 1983.
Basic Merchandise S.r.l. has been the first company in Italy and one of
the first in Europe to obtain from the most important football teams the
license to produce and distribute free-time clothing marked with their
brands and distinctive signs. Basic Merchandise S.r.l. was established
in order to face the growth of competition from products signed by world
sportive teams brands. The objective was to optimise the productive processes
and products’ distribution to world-wide markets.
The acquisition of Maglificio Calzificio Torinese constitutes the beginning
of the re-organisation process which saw the development of the BasicNet
Group’s production and commercialisation system.
BasicNet S.p.A. was created in order to regain brands’ dignity and
status, with the final aim of becoming a global supplier of informal clothing
and footwear for sports and leisure activities.The Group represents a
network integrating several small firms into a unique company through
the web.
No product is manufactured directly by the BasicNet Group, as manufacturing is outsourced to the third parties in the network represented by independent businesses to which the trademarks owned by the Group are licensed and with whom growth strategies are co-ordinated, supplying collections of international interests and marketing tools.
Objectives
The main objectives were:
- Seizing opportunities arising from globalisation to put in place international competitive advantage and presence by developing a network, which encompasses 8 Group companies that manage the network and its activities, 37 Licensees and 3 trading companies.
- Creating an harmonised organisation, within the network, where shared information on a real time basis works towards accelerating decisional flows and transactions, with the ultimate objective of shortening the lead time.
- Integrating all the supply chain processes in a modern IT platform developed in-house by the BasicNet Group and perceived as “a digital nervous system”, based on the use of new technologies and applications.
The main goal was the improvement of brands’ dignity and status by the world-wide spread of the network, with the final aim of becoming a global supplier of informal clothing and footwear for sports and leisure activities.
The strategy was the introduction of a new business model: the “fully web integrated company”.
This shift was carried out by the implementation of ICT tools over the already existent traditional network of connections.
Resources
Technologies
Development of KOS (Kappa Operating System)
Trading companies are to be equipped with:
A person responsible for the operating system
Hard Contact: efficient Internet connection, ISDN
e-mail and video-conferences
Intranets
Activities
The BasicNet Group develops and co-ordinates the network, managing the
vital elements of the Group's business directly, in order to guarantee
income and efficiency.
These elements include:
- the positioning of the brands and products;
- the marketing and communication strategy;
- the design and production of the products; creativity,
Research & Development;
- the purchasing of products: sourcing centres;
- the development and management of the network: licensees and the IT platform.
BasicNet uses the ICT platform developed not only to communicate with customers and partners but also, and more importantly, to manage the entire product process and the core business activities.
Functioning
BasicNet Group, via specific source centres or trading companies, co-ordinates
all the manufacturing phases on behalf of licensees, capturing significant
economies of scale and scope achieved by seeking out more suitable production
sources, in terms of cost and quality standard.
BasicNet co-ordinates the network and supervises its business
building blocks.
Each business block constitutes a “dot.com” division performing
a single task of the production process and interacting with other blocks
divisions within the same network by using only on-line transactions.
The productive process (see the figure below) starts with
the purchase of raw materials by the basicsamples division whose task
is the collection design and the creation of a “business opportunity”
for the world wide licensees. The licensees buy the part of the collection
they intend to realise for their selling campaign.
Collections are developed and delivered while the basicforecast division
makes a forecast of the sales based on the products that have already
been sold. Another division, the basicspecs, starts to invest in products’
specifications according to these selling previsions.
According to the product specifications and quantitative previsions of
sales, another dot.com division, called basicbiddings, develops a production
auction for the trading companies that are those realising the final product.
The trading company winning the auction will work with another division,
basicfactory, passing out its indents. From the indent until the final
product delivery no more than three months pass.
During these three months basicforecast works with the licensees in order
to forecast sales and determinate remnants which are bought and sold in
the store located in the headquarters or through the web at www.kappastore.com.
Image
This modular system is highly flexible and turned out to boost the BasicNet
Group growth.
Activities - Key Factor: improved integration of business processes
BasicNet S.p.A. was created in order to regain brands’ dignity and
status, with the final aim of becoming a global supplier of informal clothing
and footwear for sports and leisure activities.The Group represents a
network integrating several small firms into a unique company through
the web.
The strategy was the introduction of a new business model: the “fully
web integrated company”.
This shift was carried out by the implementation of ICT tools over the
already existent traditional network of connections.
Output and Results
This world wide network of productive and commercial units is one the
first company to completely administer its business through the web and
to achieve successful results. Consolidating its web-oriented vision BasicNet
has restored the brands international dignity, reached new markets and
quadruplicate its earnings.
The business to business and business to consumer infrastructure has required a few thousand Euro with a significant return on investment in the first few months after the establishment.
Benefits concern also the franchisees around BasicNet S.p.A: they realise a 20% cost saving and a 10 days reduction in the delivery time.
In November 2000 Basic Net was awarded by the Italian Ministry of Industry as one of the best Italian b2b application.
Output and Results - Key Factor: improved integration of business processes
BasicNet uses the ICT platform developed not only to communicate with
customers and partners but also, and more importantly, to manage the entire
product process and the core business activities.
Consolidating its web-oriented vision BasicNet has restored the brands
international dignity, reached new markets and quadruplicate its earnings.
Lessons and conclusions
The strong entrepreneurial vision of BasicNet’s top management is
a key element in order to move “into the fully web integrated company”
model. The strategic plan is the natural outcome of this mentality, where
a long term vision has allowed the transformation of intangible assets
and competitive factors into a new system of production, commercialisation
and communication.
BasicNet, thanks to a strong web oriented vision, has created an important synergy effect between its different units leading to the creation of an innovative Internet based business to business and business to consumer network model.
Another key factor for the success of the process is a reciprocal climate of trust between BasicNet S.p.A., the head of the group, and the network of companies, franchisees and trading companies.
This climate contributes to the companies’ participation and commitment to the process of change taking place. The system of already existing interactions between BasicNet S.p.A. and the satellite actors surrounding the company has favoured the shift from the old system of business to the new Web-based system, the “fully web integrated company”.
Lessons and conclusions - Key Factor: improved integration of business
processes
BasicNet, thanks to a strong web oriented vision, has created an important
synergy effect between its different units leading to the creation of
an innovative Internet based business to business and business to consumer
network model.
References and links
www.basicpress.com/
Corso Brescia, 86
10152 Torino
Italy
Tel. 011 26171
Fax. 011 2617295
contact@basicpress.com