Patagonia Executive Summary
STRAT: Patagonia
February 19, 2014
Overview
Patagonia is a high-end outdoor apparel company founded in 1972 by Yvon Chouinard, a self-described ‘dirtbag’. The company remains private.
Has experienced strong growth to date (6% sales growth Y-oY) while maintaining its commitment to sustainability and the environment
Industry includes Columbia Sportswear, The North Face (VF Corp.), and many general retailers
Strategy & Business Model:
Customers: median age of 38 years old, average household income of $160K
Products (% revenue): Sportswear (47%), Technical Outerwear (30%), Technical Knits (12%), and Hard Goods (6%). High quality, priced 20% higher than other outdoor apparel. ‘Ironclad Guarantee’ to repair, refund, or replace any product …show more content…
This initiative represented a holistic commitment to lengthen the lifecycle of each product and reduce landfill waste. It constituted Patagonia’s efforts to take responsibility for the products it made, “from birth to death and then beyond death, back to rebirth.” The initiative consisted of a mutual contract between the company and its customers to “reduce, repair, reuse, and recycle” the apparel that they consumed. This case invites you to understand a unique approach to creating and capturing value, assess its sustainability, and evaluate innovative ways to …show more content…
How important to Patagonia’s strategy is its stated mission: “Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis”?
Each of the three parts of the mission statement guide Patagonia day to day business decisions:
- Build the best product: high R&D spend ($3M annually), focus on innovation, ambassador model for testing and feedback
- Cause no unnecessary harm: environmentally friendly manufacturing techniques, supplier selectivity and environmental standards, raw materials sourcing (e.g. organic cotton), Footprint Chronicles to analyze impact, energy efficient buildings and recycling processes
- Use business to inspire and implement solutions to the environmental crisis: 1% of revenue donated to environmental causes, sharing of sustainability processes with other companies / competitors, grants and other campaigns (see Exhibit 10)
3. What is your assessment of Patagonia’s product lifecycle initiative (Reduce, Repair, Reuse, and Recycle)? Will it be a
February 19, 2014
Overview
Patagonia is a high-end outdoor apparel company founded in 1972 by Yvon Chouinard, a self-described ‘dirtbag’. The company remains private.
Has experienced strong growth to date (6% sales growth Y-oY) while maintaining its commitment to sustainability and the environment
Industry includes Columbia Sportswear, The North Face (VF Corp.), and many general retailers
Strategy & Business Model:
Customers: median age of 38 years old, average household income of $160K
Products (% revenue): Sportswear (47%), Technical Outerwear (30%), Technical Knits (12%), and Hard Goods (6%). High quality, priced 20% higher than other outdoor apparel. ‘Ironclad Guarantee’ to repair, refund, or replace any product …show more content…
This initiative represented a holistic commitment to lengthen the lifecycle of each product and reduce landfill waste. It constituted Patagonia’s efforts to take responsibility for the products it made, “from birth to death and then beyond death, back to rebirth.” The initiative consisted of a mutual contract between the company and its customers to “reduce, repair, reuse, and recycle” the apparel that they consumed. This case invites you to understand a unique approach to creating and capturing value, assess its sustainability, and evaluate innovative ways to …show more content…
How important to Patagonia’s strategy is its stated mission: “Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis”?
Each of the three parts of the mission statement guide Patagonia day to day business decisions:
- Build the best product: high R&D spend ($3M annually), focus on innovation, ambassador model for testing and feedback
- Cause no unnecessary harm: environmentally friendly manufacturing techniques, supplier selectivity and environmental standards, raw materials sourcing (e.g. organic cotton), Footprint Chronicles to analyze impact, energy efficient buildings and recycling processes
- Use business to inspire and implement solutions to the environmental crisis: 1% of revenue donated to environmental causes, sharing of sustainability processes with other companies / competitors, grants and other campaigns (see Exhibit 10)
3. What is your assessment of Patagonia’s product lifecycle initiative (Reduce, Repair, Reuse, and Recycle)? Will it be a