Mktg 605 - Patagonia Team Case - Opportunity Analysis: Understanding Market Opportunities
Autor: lilianaua • November 8, 2015 • Case Study • 1,787 Words (8 Pages) • 1,291 Views
Marketing Strategy
MKTG 605
Towson / UB MBA Program
Fall, 2015
Team Case Analysis
Opportunity Analysis: Understanding Market Opportunities
Case: Patagonia
- Evaluate Patagonia’s business model. How important to Patagonia’s business model is its environmental position?
To understand better any problem, we need to look deeply into it and try to reply on four main questions: who, when, what and why? WHO and WHAT? Patagonia is well known company in the high-end outdoor apparel industry and it includes four main product lines, such as sportswear, technical outerwear, knits and hard goods. The last one introduces packs, luggage and related materials. Being a private company, allows them to make their own business decisions based on environmental concept which is very risky and brings extra costs through environmental activities.
WHEN? Patagonia was established in 1979 and during 80-s the company could expand from $ 20 million to $ 100 million company by expanding to an international level.
Ultimately, the main question WHY, suggests the understanding of the environmental differentiation strategy, philosophy and business model of the company. Let’s take a look on value chain. Primarily, the company makes their products with no unnecessary harm to the environment, as well as most of their materials are raw. Patagonia truly believe in quality ( spent over $100,000 on field testing by ambassadors),environmental impact, integrity innovation ($3 million annually on research and development, including lab research and testing new materials) and Zen Philosophy (“oriented its goal away from profits and toward “doing things right”) (HBS, Patagonia case, 2). Due to responsible business decision, Patagonia decreased the number of suppliers from 200 to 41. The company provided new services such as repair, refund and replacement of any of their items, in turn, they increased the number of customers patronizing them. The product line strategy is based on quality, durability, as “clothes with history”.
Spearheading innovation, Patagonia remains a leader company in this area. Their projects aimed at durable fabrics and 100% recyclable zippers. Patagonia also succeeded in patenting technologies and designs, such as Synchilla (recycled polyester fleece), Capilene (moisture-wicking polyester fabric), wetsuit with chlorine-free wool, etc. The footprint products and catalogs helped not only sell products, but also pay attention to the environmental problems.
The organic cotton innovation in the early 1990s, helps to decrease large number of pesticides, chemicals and water use. Even the fact that organics cost triple the price of conventional cotton, Patagonia sold 8% more organic products than competitors in the same comparable product lines.
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