Patagonia Q\'s PDF

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Patagonia Q's...

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1. Evaluate Patagonia’s business model. How important to Patagonia’s business model is its environmental position? 1. Patagonia’s business model essentially is founded upon the idea of being environmentally friendly. They appeal to the “dirtbag” consumer, who focuses primarily on outdoors-y activities and reducing their own carbon footprint. They are focused in providing ethically sourced products manufactured in the most earth-friendly way possible. Even though this means they offer their products for a much higher price than competitors and have shorter supply, demand is still up. They treat their employees with respect and allow them, and encourage them, to participate in environmentally friendly endeavors. 2. What is your assessment of the Product Lifecycle Initiative (Reduce, Repair, Reuse and Recycle). Is the PLI a good way for Patagonia to differentiate the brand from competitors? 1. I think that in theory, the Product Lifecycle Initiative is a great idea to differentiate its brand from competitors. However, long-term, it may not be a viable strategy for profit making. As the founder suggested, you can be the market leader of innovative initiatives, but if you can’t make and maintain a profit, no one will care. Overall, the goal of this initiative is to make not only its customers, but other businesses, more aware of their environmental footprint and to place more focus on being environmentally friendly, values that encompass the company as a whole. While I agree that it will provide thousands, if not millions, in revenues due to social media and press, I think that long term it is not a viable profit making initiative. Essentially, it is telling the customers that instead of becoming returning customers and to purchase more with the company, wear the same item for as long as possible, and even send it back for (free) repairs. This strategy may work with an extremely large customer base, but even then the trading aspect would be sure to lower profits. 3. How fast can Patagonia grow? How fast should it grow? 1. Patagonia has the potential to grow extremely fast. However, that does not necessarily mean that is the best option for them. Currently, their customer base is expanding due to their core company values and mission. But in order to expand, it requires extensive operational expansions as well. If they were to do this too fast, some of their values – being an environmentally friendly company – could be compromised. Additionally, if they continue to only use ethically sourced products, such as organic cotton, they would need to build a relationship with more suppliers or find a supplier that can handle the demand they would require, because as stated in the article, the one they have was not able to produce the necessary amount. 4. How would Patagonia’s business model differ if the company were publicly held? 1. Patagonia’s business model would differ if it were publically held in the sense that they would have much more urgency in expansion, and be much more focused on profits than they are currently. As Chouinard said “I am not afraid of losing this

company.” That attitude would most definitely change, and their core values of a company may change....