Patagonia: A Values-Led Business From the Start, Case Study Example

The environment is not only a very importantly issue for the family who owns Patagonia, but their companies consumers also care a great deal about environmental protection. Patagonia’s mission statement is “build the best product, cause no unnecessary harm, and use business to inspire and implement solution to the environmental crisis” (Carus, 2012).  This affects their business model because in order to pursue environmental protection, they only do business with companies that are up to Patagonia’s standards, hire individuals who share the same desire, and produce environmental conscious products. The environmental effects of production are constantly studied and Patagonia doesn’t prioritize the cheapest manufacturing or transportation practices (Stevenson, 2012).

The Product Lifestyle Initiative is a unique approach to retail because it values selling less and being environment friendly. Patagonia will offer resale programs, repairs on existing products, and new products which are made up of recycled material (Stevenson, 2012). This approach will be effective for Patagonia’s growth because they already have a strong consumer base. Patagonia has already established their brand as a household name, so this new approach won’t deter consumers away from purchasing their products. The Product Lifestyle Initiative stays true to Patagonia’s established business model so it will only add to their competitive advantage due to the added differentiating factor (Stevenson, 2012). Patagonia will grow faster because they will be viewed as a more unique product compared to their competitors.

If Patagonia was a publically owned company, then their business model would be different. This is because publically owned companies have to answer to their shareholders. To put it bluntly, they have to make money for the shareholders. So in order to constantly please existing shareholders and attract new investment, Patagonia would have to abandon their costly environmentally conscious business model for a more cost efficient one (Carus, 2012).

References

Carus, F. (2012, July 17). Patagonia: A values-led business from the start. The Guardian. Retrieved July 27, 2015, from http://www.theguardian.com/sustainable-business/patagonia-values-led-business-benefit-corp

Stevenson, S. (2012, April 26). Patagonia’s Founder is America’s Most Unlikely Business Guru. The Wall Street Journal. Retrieved July 27, 2015, from http://www.wsj.com/articles/SB10001424052702303513404577352221465986612