Patagonia Strengths & Weaknesses SWOT
1. Strategy: Patagonia’s product differentiation as their strategy, through CSR, which involves sustainability, philanthropic initiatives, moral obligations, and reputation. They operate in ways to secure long-term economic performance by avoiding short-term behavior that is socially detrimental or environmentally wasteful. They do this all while keeping their quality high and having their core consumers in mind.
Activities Patagonia employs to support the customer’s willingness to pay: Suppliers & Resources
Works closely with suppliers
To create the technical innovations required
Collaborates with fabric and fiber producers to create superior fabrics
Does not buy commodity fabrics
Over ½ the products were made in North America & Europe
Production
Paid double compared to competitors for world class professional athletes’ feedback on products
Invested heavily to maintain a laboratory for developing and testing fabrics
Continuously researching new ways to create the least amount of harm to the environment while producing products, i.e. recycled polyester
Patagonia considers three main criteria when designing and developing new products
Quality- the reason customers pay the premium on the product is because of the guaranteed quality
Improved raw materials
Better product design
Attention to detail in the manufacturing process
Defect rate was 1/10th the average industry rate
Impact on the environment
Aesthetics
Global
Japan
Marketing as an American brand is attractive to the Japanese, they use their brand association with the “California lifestyle”
Europe
Marketing as an American brand was unattractive to the Europeans
Commitment to the environment was more attractive to the Europeans vs. the Americans
Philanthropy
Slow growth act- reduce growth to reduce harm to environment
Earth Tax- 1% of sales or 10% of pretax profits (which ever was bigger) to outside grass roots environmental groups.
2002 distributed 1.9 million to about 300 organizations
1985 to 2002
Activities Patagonia employs to support the customer’s willingness to pay: Suppliers & Resources
Works closely with suppliers
To create the technical innovations required
Collaborates with fabric and fiber producers to create superior fabrics
Does not buy commodity fabrics
Over ½ the products were made in North America & Europe
Production
Paid double compared to competitors for world class professional athletes’ feedback on products
Invested heavily to maintain a laboratory for developing and testing fabrics
Continuously researching new ways to create the least amount of harm to the environment while producing products, i.e. recycled polyester
Patagonia considers three main criteria when designing and developing new products
Quality- the reason customers pay the premium on the product is because of the guaranteed quality
Improved raw materials
Better product design
Attention to detail in the manufacturing process
Defect rate was 1/10th the average industry rate
Impact on the environment
Aesthetics
Global
Japan
Marketing as an American brand is attractive to the Japanese, they use their brand association with the “California lifestyle”
Europe
Marketing as an American brand was unattractive to the Europeans
Commitment to the environment was more attractive to the Europeans vs. the Americans
Philanthropy
Slow growth act- reduce growth to reduce harm to environment
Earth Tax- 1% of sales or 10% of pretax profits (which ever was bigger) to outside grass roots environmental groups.
2002 distributed 1.9 million to about 300 organizations
1985 to 2002