Tiffany White
MKTG 475
Case # 3
Patagonia Case Study
Question:
Evaluate Patagonia’s business model. How important to Patagonia’s business model is its
environmental position? Why?
What is your assessment of the Product Lifecycle Initiative (Reduce, Repair, Reuse, and
Recycle)? Is this a smart strategy for their product development strategies?
How fast can Patagonia grow? How fast could it grow? What business development
strategies are being or should be implemented?
How would Patagonia’s business model differ if the company were publicly held?
Answer:
Evaluate Patagonia’s business model. How important to Patagonia’s business model is its
environmental position? Why?
In order to analyze Patagonia’s business model, we must first have a good understanding
of what a business model is. A business model is a plan implemented by a company to
generate revenue and make a profit from operations. The model includes the components
and functions of the business, as well as the revenues it generates and the expenses it
incurs. Patagonia likes to do things a little different than the typical business world;
although sales of Patagonia are robust, Chouinard, founder of Patagonia, says, Patagonia
exists not only to make money but also to “prove that it’s possible to do the right thing for
the planet and still make a profit.”
The business model of Patagonia is not hard to understand. The company focuses on
quality, innovation, and economic impact, all while making a profit. Patagonia is
committed to providing newly innovated products at the highest quality available. They are
able to do so by reducing the environmental impact of its products at every step of the
production process. For example, Patagonia decided to use organic cotton for the
production of their apparel even though the price of organic cotton was higher and it
wasn’t as readily available for production. Patagonia benefits tremendously from being a
pioneer in the outdoor market. They are constantly testing their products to provide the
best quality to their consumers. This allows them to define the rules of the game.
Patagonia’s business model is essential to the company’s success and existence. The
business model runs deep from the type of products the company offers to the people the
company employs. You won’t find your typical money-hungry businessman working for
Patagonia. Chouinard firmly believed in Zen philosophy, which he saw as “perfect” for the
business world. He explained, “In Zen archery…you forget about the goal-hitting the
bull’s-eye-and instead focus on al the individual movements involved in shooting an
arrow… If you’ve perfected all the elements, you cent help but hit the center of the target.’
