Benetton’s strategic intent was ‘to put fashion on an industrial level’. Its success was based
on a creation, design and distribution system, which enabled it to be – with McDonald’s and Nike – one of the largest virtual structures in the world. The entire supply chain was concerned with
externalization. This system was based on the ‘short circuit’ principles, and had been optimized in the early 1980s by Aldo Palmeri when he replaced Elio Aluffi, an engineer, as CEO of the group. Palmeri was a former top executive at the Italian ministry of industry, and a deputy director of the Bank of Italy. Its manufacturing organization enabled Benetton to maintain essential reactivity in a business dealing with fashion, while reaching the same efficiency as a large industry. However, the implementation of this system was expensive. Until 1992, Benetton’s debt was equal to its net capital.