A ‘Dirtbag Business’
Q1 - Evaluate Patagonia’s business model. How important to Patagonia’s business model is its environmental position? It all started out in 1957 when Yvon Chouinard–Emeritus and a couple of friends began to make pitons. Nine years later in 1966, Chouinard opened a shop I Ventura, California.
To understand Patagonia’s business model, it is necessary to gain an insight into the company mindset. This could seem as a challenging job but Patagonia’s Mission Statement explains it quite well: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”.
Patagonia is a manufacturer of high quality outdoor and adventure sport clothing. So they strive to act as environmental as possible when producing the best available product. To break it down, Patagonia sells
I will in the following review the Triple Bottom Line, also called the three P’s – with focus on the environmental aspect for Patagonia.
To be hired at Patagonia the candidates have to be aligned with the right mindset, a ‘dirtbag’ like Chouinard and Sheahan are highly valued in the firm. That means sustainable thoughts and innovative-environmental-attention is important, so they can achieve the best possible quality while it has to be multifunctional. The R&D department is crucial because they develop new workflows and new ways to produce as eco-friendly.
Chouinard, the founder of Patagonia started to donate 1% of the revenue each FY. It resulted in an organization called ‘1 % for the planet’ which have several hundreds of members worldwide all donating 1 %. Furthermore they invest in optimizing the production facilities so it is as eco-friendly as possible – cause no unnecessarily harm.
Patagonia’s net sale has grown since 2003 and with a gross profit margin on 52.6% it is doing better than Timberland and Nike. The constantly increasing turnover is a result of...