Strategic Management of Patagonia

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Executive Summary
Strategic management is the process of analyzing the market environment of an organization and
getting setting strategies for achieving its major goals. This study will assess the strategic
management of Patagonia. The external market environment analysis and resource and capability
analysis of Patagonia demonstrate its huge opportunity towards expanding in UK market. The
mission statement of the organization should incorporate continuous innovation in their product
range. The study has also demonstrated the SWOT analysis of the organization and made
changed in the business level strategies through using cost leadership strategy.

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Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Task 1.........................................................................................................................................4
2.1 PESTLE Analysis..................................................................................................................4
1.2 Porter’s Five Force Analysis.................................................................................................6
Task 2...............................................................................................................................................8
2.1 Resource Analysis through VRIO Framework......................................................................8
2.2 Competency Analysis through Competency Framework....................................................11
Task 3.............................................................................................................................................12
3.1 Vision Statement and Mission Statement............................................................................12
3.2 Support of Mission Statement in Current Growth and Expansion Strategy........................13
3.3 Recommended Changes in Vision and Mission Statement.................................................14
Task 4.............................................................................................................................................15
4.1 SWOT Analysis...................................................................................................................15
4.2 Recommended Changes in Current Business Level Strategies...........................................16
5.0 Conclusion...............................................................................................................................18
Reference List................................................................................................................................19

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1.0 Introduction
Strategic management is the formulation and implementation of major goals and
initiatives taken by an organization towards fulfilling those goals (Bettis et al. 2016). The
organization chosen for this study is Patagonia. It is a popular outdoor apparel company in USA
selling outdoor sports clothing and accessories (Patagonia.com 2017). The organization is going
to establish its business in United Kingdom. The study will analyze the external market and
industry competition within UK outdoor active lifestyle clothing industry. The study will also
analyze the resource and competencies of Patagonia towards gaining competitive advantage in
UK market. The study critically will assess the mission and vision statement of Patagonia
towards supporting its growth and expansion strategy. Apart from that, this study will also
demonstrate the SWOT analysis and current business level strategies of the organization required
for UK market.
2.0 Task 1
2.1 PESTLE Analysis
Political Factor
Political stability of United Kingdom can help in conducting business opportunity.
According to Ethiraj, Gambardella and Helfat (2016), Government support of United Kingdom
for industrialization can help the business growth of Patagonia. On the other hand, Chen, Delmas
and Lieberman (2015) Changing government rules and regulations can hamper the business
operation of Patagonia in UK. Reduced tax rate of United Kingdom can be helpful for the
business operation of Patagonia. It helps in reducing the cost of business operation. Furthermore,

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Certo et al. (2016) opined that free trade agreement of United Kingdom will facilitate in flexible
international business of Patagonia.
Economic Factor
Developed economic condition of United Kingdom can enhance the return on investment
of the organization. As per Mitchell and Leiponen (2016), fluctuation in inflation rate hampers
the pricing policies of the organization in this market. Growing economic condition of United
Kingdom has decreased the interest rate of the bank, which can be helpful for financial funding
of the organization.
Social Factor
Bergh et al. (2014) pointed out that Growing inclination of people in United Kingdom
towards outdoor sports can increase the business scope of Patagonia. On the other hand, growing
tourism arrivals in United Kingdom and their tendency towards ski driving, climbing, fly fishing
and others has increased the demand of cloths of Patagonia. Increasing favour of people towards
organic cloths can increase the business scope of Patagonia in UK market. Furthermore, Vogel
and Güttel (2013) opined that high disposable income of the people of UK can increase the
business potentiality of the organization.
Technological Factor
Technological advancement of United Kingdom can improve the manufacturing process
of outdoor sports clothing with advanced technical equipment. Sakas, Vlachos and Nasiopoulos
(2014) opined that advanced digital and social media can provide improved promotional
opportunity for the organization.

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Legal Factor
Patagonia can be abided by laws of United Kingdom for operating the business. Cheng
and Lin (2014) stated the organization must adhere to strict employment laws of United
Kingdom.
Environmental Factor
Engert, Rauter and Baumgartner (2016) stated that Patagonia can deal with
environmental standards through its organic clothing. Furthermore, Carbon emission from
manufacturing process can lead to threats for the business.
1.2 Porter’s Five Force Analysis
Threats of New Entrants
According to Shi et al. (2017), the investment cost in sports clothing industry is quite
expensive that can be barrier for the new entrants in this industry. On the other hand, the new
entrants also face great barriers in competition to high brand image of the reputed organizations
like Patagonia, The North Face and others. However, growing demand of sports clothing can
encourage the new entrants in starting up their outdoor sport clothing business. Therefore,
Patagonia can face moderate threats of new entrants in United Kingdom.
Threats of Substitute
The Substitute of Patagonia can be the traditional and normal cotton clothing products.
However, these clothing are not that much stylish and comfortable. Moreover, Yoo (2016) stated
that the qualities of the substitute products are quite low. Therefore, the Patagonia can face less
threat from the substitute products in the industry of United Kingdom.