In my part of our presentation I am going to analyze the SWOT thesis about Patagonia PDF

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In my part of our presentation I am going to analyze the SWOT thesis about Patagonia. The strength of Patagonia is definitely their position as a pioneer of organic cotton in the textile industry. They are focusing on recyclable and sustainable materials. Since their establishment, they gained a lot of experience and have today an international well-known brand name. Their core business is trendier than ever, because customers are paying much more attention to the environment. Patagonia has very modern working conditions. Their employees are working under a flextime policy which leads to one of the lowest employee turnover rates in their industry. Their policy allows their members to take off time during work for leisure activities, which increases their efficiency.

But there are also weaknesses. The shady side of organic cotton is the fact, that the cost of production triples the price of cotton compared with classical one. This makes their products more expensive. The number of suppliers in a niche market can be a problem too, when one production facility has to close for some reason. This can lead to a shortage of goods. Because their clothes are more practical and expensive, their average consumer is 38 years old. In addition to those points, the size of the company makes it more difficult to invest a high amount of money in advertising.

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This brings me already to the opportunities of Patagonia. The presence on Social Media could be higher and more specific. The fact that it is much cheaper than the regular advertisement makes it attractive. To attract the younger generation, a partnership with GoPro would be a good choice. Their niche market would fit perfectly to the core business of Patagonia. Patagonia is already well known in North America, Japan, and Europe. To increase their market share, they should try to expand internationally, such as in South America for the climbing tourists (Machu Picchu, the salt desert in Bolivia) or even to Asia for expeditions to Nepal or focus more on research and development of new textiles To finance these ideas, they could plan an IPO (Initial Public Offering) and so reinvest the money collected. The fact that the middle class is growing worldwide makes this segment an opportunity worth

Despite all these positive factors, there are also threats The biggest concerns are the international competitors such as the North Face and Columbia Sportswear. They are competing in a very high saturation market and some of those famous competitors might even have a higher advertising and marketing budget as Patagonia has. The US is a very important market for Patagonia but the political uncertainty makes it difficult to plan the future. Are there new laws, penalties and taxes coming on imported goods? The fact that for organic raw materials exist only a few suppliers, makes it difficult for Patagonia to switch in case of political crises in the country of production. 2

Number 6: Based on your SWOT analysis, identify the problem that needs to be addressed

The biggest issue Patagonia has to deal with in the future, is the increase in market share of their competitors. This can be best seen when we are analyzing their actual market capitalization on the stock market. Columbia Sportswear has a capitalization of 4 billion Dollars. North Face’s owner the corporation VF, which owns brands like Timberland or Vans has market capitalization of 23 billion Dollars. For this two companies it is much easier to attract money from investors to expand their businesses. Another threat could be an aggressive takeover from one of these competitors. Therefore, it would be wise for Patagonia to work together with one of these companies and share their experiences and know-hows. This could be a joint-venture or complementary alliance.

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