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Patagonia Discussion

Patagonia's corporate strategy focuses on environmental sustainability, quality design, and building relationships with its core customer base of affluent outdoor enthusiasts. The strategy allows Patagonia to command higher prices compared to other clothing retailers. Key aspects of the strategy include prioritizing environmental practices in manufacturing and operations, cultivating customer loyalty through a lifetime guarantee on products, and promoting environmental causes through activism. Questions discuss whether and how Patagonia's environmental positioning contributes to profitability and shareholder value, and how the strategy might differ if the company was publicly held.

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945 views

Patagonia Discussion

Patagonia's corporate strategy focuses on environmental sustainability, quality design, and building relationships with its core customer base of affluent outdoor enthusiasts. The strategy allows Patagonia to command higher prices compared to other clothing retailers. Key aspects of the strategy include prioritizing environmental practices in manufacturing and operations, cultivating customer loyalty through a lifetime guarantee on products, and promoting environmental causes through activism. Questions discuss whether and how Patagonia's environmental positioning contributes to profitability and shareholder value, and how the strategy might differ if the company was publicly held.

Uploaded by

kaaviyahesham
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Patagonia Corporate Environmental Strategy

Professor Doug Cerf Donald Bren Graduate School of Environmental Science and Management Corporate Environmental Management (ESM 281) Winter 2009

Facts/Issues
Patagonia can command price premiums from its affluent customers Explore the question of non-market strategy and the costs and benefits of social activism in the firm
Non market strategy is strategy with respect to activists, regulators, the media and other actors who do not have direct economic relations with the firm but whose behavior may affect the firms opportunities

How has Patagonias positioning as a champion of environmental preservation contributed to shareholder value? Is Patagonia selling a public good as part of their product?
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Patagonia Activity System


Page 20 of TN

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Questions
1. Evaluate Patagonias strategy. 2. How important to Patagonias strategy is its environmental position? 3. How fast can Patagonia grow? How fast should it grow? 4. How would Patagonias strategy differ if the company were publicly held?
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Patagonias strategy
Pillars of Patagonia strategy
Quality Design Environment Core customer Increase customer willingness to pay (above clothing retailer specialist average)
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Patagonia Strategy
Why does Patagonia own stores? How does this enhance customer willingness to pay?

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Patagonia Strategy
Why is Patagonia the most innovative specialist? How does this enhance customer willingness to pay?

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Patagonia Strategy
Why is Patagonia the only specialist to own a fabric lab? How does this enhance customer willingness to pay?

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Patagonia Strategy
Why does Patagonia build long-lasting relationships with suppliers? How does this enhance customer willingness to pay?

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Patagonia Strategy
Why does Patagonia sub contract production?

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Patagonia Strategy
Why does Patagonia offer the allencompassing ironclad guarantee? How does this enhance customer willingness to pay?

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Patagonia Strategy
Why does Patagonia have 90% less merchandise defects than their competitors?

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Patagonia Strategy
Why is Patagonia is Patagonia located in Ventura and Reno?

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Patagonia Strategy
What is the role of Chouinard in the strategy? How does he enhance the willingness to pay?

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Patagonia Strategy
What do the numbers tell us?

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Patagonia Strategy
Is the environmental positioning an integral part of the strategy? Three possible answers:
Its integral and helpful to the companys positioning and profit. Its integral, but it is a tax from a profitability standpoint It is not integral, its irrelevant
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Patagonia Strategy
Are Chouinards ideas applicable more generally? Does the idea of selling public goods apply to publicly held companies selling other products to middle income customers? Can a company do this in other markets than outdoor wear? What are the product or market characteristics that permit the success of this kind of strategy?
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Is the strategy successful?


I may be a dirtbag, but I am a rich dirtbag
Chouinard quote not mentioned in the case

Arguments that the strategy is successful Arguments that the strategy is not successful What threats do they face? How should they grow? What should Chouinard do?
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Patagonia and Wal-Mart


Compare and contrast
Customer willingness to pay

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Conclusion
Is Patagonia successful because or environmentalism or quality? Has Patagonia helped to define quality with environmentalism?

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