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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Patagonia, Inc. is a proof to the often-debated question of economic value in green business practices, and this idea acts as an outline as to how they arrived at such an impressive presence in the business world while still growing financially, maintaining a global influence, and maintaining their environmental priorities. Through its transparent and environmentally conscious supply-chain management, Patagonia has effectively set the scene for other producers to follow its lead in a time where redesign and innovation is the only answer to depleting natural resources and the need to eliminate waste. The crucial connection that Patagonia maintains with its consumers can be seen through the inherent environmental psychological analysis of Patagonia's mission to create the highest quality product while doing the least amount of harm to the environment. The consumers who are buying products to engage in outdoor recreation presumably attach high value to those natural lands and waters that they are venturing out into. Therefore, with this deep emotional significance comes motivation to protect the sanctity of those places on Earth, and support those organizations and businesses that are driven by this same passion.

 Yvon Chouinard, decided to make his own reusable hardware. In 1957, he went to a junkyard and bought a used coal-fired forge, a 138-pound anvil, some tongs and hammers, and started teaching himself how to blacksmith. The word spread to friends and before he knew it he was in business. In 1965, he went into partnership with Tom Frost, who was an aeronautical engineer as well as a climber. On a winter climbing trip to Scotland in 1970, Chouinard bought a regulation team rugby shirt to wear rock climbing. It was blue, with two red and one yellow center stripe across the chest. Back in the States, Chouinard wore it around his climbing friends, who asked where they could get one. They ordered a few shirts from Umbro, in England, and they sold straight off. They couldn't keep them in stock, and soon began ordering shirts from New Zealand and Argentina as well. Other companies followed suit and they soon realized that they had introduced a minor fashion craze to the United States. They began to see clothing as a way to help support the marginally profitable hardware business. As they began to make more and more clothes, they needed to find a name for our clothing line. To most people, especially then, Patagonia was a name like Timbuktu or Shangri-La, far-off, interesting, not quite on the map. Fast forward to more recent dates, sales at the 1,265-person company stood at $315 million in 2009, and still growing.

    Patagonia grew out of a small company that made tools for climbers. Alpinism remains at the heart of a worldwide business that still makes clothes for climbing – as well as for skiing, snowboarding, surfing, fly fishing, paddling and trail running. Patagonia's values reflect those of a business started by a band of climbers and surfers, and the minimalist style they promoted. The approach they take towards product design demonstrates a bias for simplicity and utility.  For them a love of wild and beautiful places demands participation in the fight to save them, and to help reverse the steep decline in the overall environmental health of our planet. They donate time, services and at least 1% of sales to hundreds of grassroots environmental groups all over the world who work to help reverse the tide. Knowing their business activity – from lighting stores to dyeing shirts – creates pollution as a by-product, they work steadily to reduce those harms. They use recycled polyester in many of the clothes and only organic. In addition, Patagonia is committed to sourcing responsible materials in all aspects of their business. Patagonia's Packaging and Merchandising Policy and Implementation Guidelines were created to ensure that their environmental purchasing practices are consistent across all business operations.

Communication is an important part of Patagonia's success. In his book “Let my People go Surfing”, Yvon Chouinard, founder of Patagonia, inspires us with some simple techniques on how to use communication to build a successful business. There are several communication lessons inspired by the way they do business at Patagonia.  Choosing the right team is important when creating a brand. Yvon surrounded himself with a leadership team and employees who shared his passion and accepted his values.  By doing this, Yvon eliminated one communication challenge; having to convince people of the ‘why' behind his decisions.  He created a team that understood his vision, believed in it, and wanted to help build the company by being ambassadors for that vision. Patagonia was also consistent in communicating their values through actions and words. There were many changes at Patagonia that the company faced during its growth, but a lot of effort was given to keep in place the internal activities. These activities supported the cultural values that aligned with what the employees expected when they joined Patagonia.   Yvon believed it was important to communicate Patagonia's values to their suppliers and contractors as well as their employees. To promote effective communication, and grow the business at a manageable rate, Patagonia subscribed to the idea that, “100 people in one location” was a good size.  It helped to keep it small enough to manage, promote personal accountability, and avoid bureaucracy. Lastly, Patagonia's marketing aimed to be honest.  In a time when most companies were paying professional models for their product catalogues, Patagonia used photos of everyday people, both men and women, doing real things, while wearing their very own Patagonia clothing.

Patagonia is a certified B corporation. It has a score of 151.5 which means it's in the top percentile of B corporations and is beneficial to the environment. Each year, B Lab releases lists honoring the top-performing Certified B Corps in each Impact Area and overall, broken down by size, on the annual Best for the World lists. Patagonia has won Best for Community 2018, Best for Environment 2018, Best for Overall 2018, Best for Changemakers 2018, Best for Community 2017, Best for Environment 2017, Best for Overall 2017, Best for Changemakers 2017, Best for Environment 2014, Best for Environment 2013, Best for Environment 2012 and so on.

For Patagonia, a private company, becoming a B Corp ensured that they could classify into their corporate agreement the values they hold dear, including their ongoing funding of grassroots environmental organizations because protecting the wild places they love and play in is so integral to their business. Moreover, as they face the challenges of global climate change, disruption of their financial markets, pressures on water and food supply and the unbridled consumption threatening the planet, it becomes ever more clear that a community of companies must now emerge to stem the tide of ecological disaster and share and evolve a new vision of responsible business.

    The privately held company has been known to promote used wear and ask consumers to think twice before buying its products. In spite of what looks like an anti-marketing effort, the company has seen its revenues grow in the last few years despite the recession.  Consumers were interested in goods that lasted long, and Patagonia saw an opportunity there to offer its own long-lasting wares. This led to the company's running an advertisement during the 2011 Thanksgiving season that read “Don't Buy This Jacket.” The advertisement talked about the cost to the environment of one of the company's best-selling fleece sweaters and asked consumers to reconsider before buying the product and instead opt for a used Patagonia product. The company saw its revenues grow about 30 percent to $543 million in 2012, followed by another six percent growth in 2013. The company was estimated to reach over $750 million for 2017.

       Patagonia is a very simplistic company that strives to do as little promotion as possible they discourage against excessive buying and focus on quality of product to the selling.

Patagonia has multiple channels of retailers such as stand-alone stores, online shopping, and partnerships with other stores in Europe, Asia, and South America, as well as the U.S. Patagonia is known to be very expensive, usually running around 99 dollars a jacket. This can drive customers towards the competition; however, Patagonia can afford to keep their prices high because of the quality of the product and the loyalty of their customers. Their marketing strategy is based largely on simply the product; they believe strongly in having great quality products and focus on making durable products that last and are useful to their customers. Patagonia markets toward health nuts and people who are outdoorsy, so in order to attract those people they do a lot for the environment instead of taking traditional routes of marketing.

Patagonia is a prime example of a company that pays remarkably close attention to their supply chain. They are a unique organization because not only do they make some of the highest quality and sought after clothes, they do so in a way that is socially and environmentally conscious while earning respectable profits. Patagonia reduces their transportation costs and their impact on the environment by strategically and ethically sourcing manufacturing plants closer to their suppliers of raw materials and shipping ports. By strategically placing manufacturing closer to suppliers and shipping sources this cuts down material costs and reduces the distance needed to transport raw goods and finished products. Patagonia also accounts for shipment efficiency by using more fuel efficient methods of transportation and by consolidating products into larger but fewer shipments. For conscious consumers this company is the pinnacle of excellence.

 Patagonia doesn't own farms, mills, or factories but they are still responsible for all the workers who make their goods and for all that goes into a piece of clothing that bears a Patagonia label. They have high sewing standards, even for casual sportswear, and exacting standards for technical clothes. To meet quality requirements, the production staff  always has been drawn to clean, well-lighted factories that employed experienced sewing operators. Although they had always bargained with their factories over price and terms, they never chased lowest-cost labor. Patagonia has its own Code of Conduct that prevents factories from subcontracting work without permission and requires them to maintain a quality-improvement plan.

First, it was just one man selling handmade pitons out of his car and fueling his passion for rock climbing. Fast forward to a multimillion dollar company making high-quality, sustainable outdoor apparel that's leading the environmental movement and is now tackling regenerative agriculture as its next initiative. Patagonia Inc. is known for doing things differently, and what they're doing is clearly getting the best of their people, who take them to new heights. A leader has a long-term vision, picks the mountain, and motivates people toward a common cause. At Patagonia, it's a lot more like a network rather than a pyramid or triangle. Communication can happen directly from the CEO or Yvon Chouinard as chairman to an entry level role, depending on who needs to get the work done. There's just no reverence for reporting relationships or traditional hierarchies. Patagonia's managers like breaking them because, often, the best ideas aren't from the manager; they're from the person whose hands are dirty doing the real work. If one person's doing the work, you don't need their manager, their manager's manager, and so on, to get things done; you just need the right person. “Our philosophy is that the manager is more of a mentor and a resource; they give you coaching and direction, they ensure the work is aligned to the highest business priorities, and they allocate resources,” states Patagonia's Vice President of Human Resources and Shared Services, Dean Carter. They give people context so they know their role, how things work, and the direction they're headed. After that, it's up to individuals to get work done. Decision-making is by far the biggest challenge because of the low hierarchy and the independent nature of the people hired. When you don't have specific hierarchy, it can be difficult to determine, "Who makes this decision? Can we move forward?"

Dean Carter is the Vice President for Human Resources and Shared Services. In his role, Dean Carter provides strategic leadership and direction of Patagonia's global human resources, finance and legal teams. Carter brings a wealth of global human resources and business leadership to Patagonia. “Dean will elevate our game in our objective to expand our influence and develop our team, while remaining true to the values of environmental and social activism,” said Marcario. “I'm looking forward to partnering with him to support and grow our organization and the people who push us to embody our mission every day.” Dean is an avid hiker, snowboarder and swimmer and he looks forward to getting in the ocean more often once he arrives in Ventura so he fits the perfect character to work at Patagonia Inc.

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