Patagonia free essay sample

Patagonia was initiated by people who were hooked on climbing mountain and traveling around the world. Their business ideas and concepts were originated from their passion and demand of better equipments. Founders of Patagonia even rotate in business management, some of them traveling around and enjoy climbing while others work hard in the company. Their vision and mission which they emphasized environmental sustainability was steadfast. Unlike other normal companies, they seem to put sustainability ahead of maximizing the profit. At the first glance, it sounds radical or hard to understand that business doesn’t set its first goal as profit. However, the business performances and their achievements on preserving environment make us give a second look on Patagonia. Even when their business was difficult to be lucrative, they didn’t compromise by forgiving the quality or sustainability. Also, Patagonia’s tactics for achieving their goal was multi-dimensional. Not simply donating some portion of their revenue or trying to reducing pollutions, they cared human resources, logistics, raw materials, and customers’ behaviors. We will write a custom essay sample on Patagonia or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page These efforts not only realized the vision of Patagonia, but also made Patagonia a brand for representative of eco-friendliness. We can say their vision for sustainability eventually became the core competence of it Question 1 When we evaluate Patagonia’s business model, how important is its environmental position to Patagonia’s business model? At an external level, Patagonia’s goal for achieving sustainability was well fit with the trend. As people have become more interested in environmental issues, some people are willing to pay premiums for products caring for environment. Also, governments encouraged and complimenting the efforts to save environment. Patagonia came to be introduced by government to mass media. The paradox vision for sustainability actually benefits for the consumers as well. If the environments were destroyed and natural attractions are ruined, then it would be the hikers and climbers’ loss. So, the consumer groups could be more supportive to Patagonia’s initiative and less elastic to relative high price. The business model of Patagonia was therefore a practical thing overall. However, there could be a threat at the embryonic or growth stage of the industry cycle. The initial investments and sustaining the environmental operation cost high, so the business itself might not be continued. As shown in Exhibit 1, operating margin for Lost Arrow Corporation was not really good in FY 2004 ~ 2007, when Patagonia tried to expand its efforts for sustainability. Moreover, the sales volume may decrease someday. As they conduct ‘Product Lifecycle Initiative’, products are reduced, repaired and reused. It means purchasing the new product from Patagonia may decrease. Patagonia should keep in mind the long-term profitability of the business model, not only the sustainability.