Patagonia: A Sustainable Outlook on Business - Strategy Analysis

This report provides an analysis of Patagonia's sustainable business practices, focusing on the risks and opportunities the company faces. It explores environmental strategies like Cradle to Cradle, social sustainability through Carroll's CSR pyramid, and economic sustainability via the circular economy model. The report assesses Patagonia's strengths and weaknesses, utilizing SWOT and Porter's Five Forces. Ultimately, it recommends strategies for improving Patagonia's sustainability performance and competitive edge, emphasizing the importance of resource utilization and ethical practices. This analysis aims to provide insights into how Patagonia can enhance its profitability and sustainability by aligning its business operations with environmental and social values.

Patagonia A Sustainable
Outlook on Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Risk and opportunities for the Case company........................................................................1
Explaining sustainable strategies...........................................................................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Sustainable development is related with formulating effective strategies which is capable
of eliminating prevailing challenges. In the current era, there is requirement to pay attention on
possessing effective strategies in turn proper outcome to derive success can be derived. The
current report is based on assessing the sustainable challenges faced by the company. It will
focus on assessing the opportunities available for Patagonia. The currents study will give
emphasis on providing depth insights for having environmental, social and economical
sustainability. The current report will comprise an effective strategy selection by evaluating
appropriate justification in turn higher positive outcome can be derived. It will be helpful for the
organization to give much emphasis on providing appropriate recommendation in turn proper
ability to incline competitive edge can become possible.
MAIN BODY
Risk and opportunities for the Case company
Patagonia is one of the successful privately owned outdoor clothing organization which
offers different kind of products for sports, travel and every time. It becomes essential for the
organization by identifying appropriate opportunities and threats in turn better functioning can
be conducted (Holmberg and Sandbrook, 2019). There are several threats and opportunities
which are faced by Patagonia which need to be taken into consideration in turn higher
productive outcome can be derived.
Strengths
 Popularity among customers
 Eco conscious market
 Fair treatment for the employees
 Effective marketing strategies
Weaknesses
 Involvement in politics
 Higher utilization of resources
 Small commercial footprint
 over dependence
 lagging on technical sector
Opportunities
 Renovate the product line
 Higher number of customer due to
good social compliance with social
Threats
 Unpredictable environment
 Higher number of competitions
 Effectiveness in complying with legal
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responsibilities can allow expanding on
more areas
 Improving the quality of products by
implementing eco-friendly actions
 Emergence of digitization can allow
improving overall performance.
requirements
frequent Tech issues. etc
Patagonia can as well assess the opportunities and threats through applying Porter's five forces.
It is as follows:
Threats of new entrants
There is higher number of threats from the other similar organization which can be
tackled by applying innovating products, building economies of scale, etc.
Bargaining power of suppliers
It supplies the goods from the numerous suppliers which presents low t bargaining power
from suppliers.
Bargaining power of buyers
The bargaining power of customer for Patagonia is high as it forces it to decline price
and offer discounts, etc which is the biggest threats (Silvestre and Ţîrcă, 2019).
Threats from substitute products
It has this threat which can be overcome by being more service oriented than product
and increasing switching cost for clients.
Rivalry among the existing players
It inclines risk of decreasing prices which has threat of lowering profitability margin.
On the basis of provided information it can be identified that company has these opportunities
which can lead firm towards success (Polasky and et.al., 2019.). It can face mentioned threats
which are required to be eliminated by applying suitable course of action. These are the issues
faced from the economic, social and environmental perspective.
Explaining sustainable strategies
Environmental strategy
There are several strategies which can be applied by firm for improving performance of
company. Patagonia is facing issue to decline the carbon emission which has adverse impact on
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the performance of enterprise. Cradle to cradle is one of the significant strategy that can be taken
into consideration by organization for overcoming the prevailing environmental issues. It
mimics regenerative cycle which is helpful in reusing (Sachs and et.al., 20190. Cap and trade is
one of the strategy which is taken into consideration by the organization for ensuring proper
ability to reduce emission through setting limit on the pollution and creating strictness over the
time. It is one of the technique which is taken into practice for overcoming challenges of both
economic and environmental. From the evaluation of the presented details regarding prevailing
risk for specified organization is that appropriate course of action for making improvement can
become possible. In addition to this, there is need to assess proper justification for applying
significant processing.
It is recommended to the company to use Cradle to cradle is the strategies which can be applied
by Patagonia. In order to make improvement it becomes crucial for the specified enterprise in
order to incline the productivity and sustainability through ensuring optimum utilization of
resources (Khosla and et.al., 20210. Cradle to cradle is one of the significant technique which
can provide larger number of benefits to Patagonia for improving overall its environmental
situation. It can permit the enterprise to get ability to lowering cost, improved competitiveness,
reduced waste and increased resource utilization.
The specified technique will be useful in having system into the organizational process which
focuses on offering products to the targeted audience which can be appropriately disposed by
eliminating waste. On the basis of this it can be interpreted that applying this specified strategy
can be helpful in inclining opportunities to increase optimum utilization of resources. It is
basically considered with having life cycle analysis to describe a recycled process which tend to
create new product at the end of its span of life. Executing this specific course of action will be
helpful in gaining zero waste which will prevent firm to decline emission and pollution which
has adverse influence on processing of environment. On the basis of this, it can be justified that
firm will become able to increase the profitability & sustainability of organization through
getting positive impact from environment.
Social sustainability
There are few issues which are created by social environment in which firm operates. It is
crucial for Patagonia to concentrate on having relevant actions in turn higher sustainability can
be derived. There are various responsibilities which are required to be accomplished by firm for
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building good image in turn favorable outcome can be achieved. The theories involve social
values and enterprise, Caroll's CSR pyramid, etc. social value theory is concerned with having
personal values which might change under particular change (Carroll’s CSR pyramid, 2021).
Social enterprise approach is related with studying contextual factors that lead social venture
creation. It involves dynamic structure and dynamic which measures social impact, mobilize
resources for having sustainable social change. Caroll's CSR pyramid is one of the technique
which is highly taken into practice by Patagonia for handling social perception of gaining health
conscious perspective of firm.
It is recommended to Patagonia to utilize Caroll's CSR pyramid as it helpful in attaining
economic, legal, ethical and philanthropic corporate responsibilities. It indicates that 4
components of Caroll's CSR pyramid which is need to be accomplished by specified
organization. Economic business survival on long term basis & benefits which can help to gain
profitability (Vinuesa and et.al., 2020). Legal requirement is imperative for comp[any to obey by
adhering laws, regulations, health & safety measures. Philanthropic is the h responsibility of
company to give back to society. Patagonia is highly given focus on achieving the objectives in
turn higher profitability and sustainability development t opportunities can be grabbed.
Patagonia ensures that proper utilization of resources through maintaining effective working
culture environment. In addition to this, it can be justified that applying the particular course of
action can be useful in gaining significant process as it permit deriving distinct benefits like
building trust, enhancing e positive relationship, increasing sustainability, profitability and
encouraging professional & personal growth.
On the basis of provided information it can be specified that organization can effectively apply
CSR approach to get the positive outcome in turn higher valuable outcome achieving can
become possible. From the assessment of the provided case study it can be specified that
Patagonia is maintaining good compliance with corporate social responsibility through focusing
on giving good environment to its employees, customers, children, etc. the main reason behind
applying this strategy is to improve image and relationship in industry through fulfilling
requirements of legal, social, ethical, etc action, in turn better outcome can be derived. It will be
useful in overcoming issues of compliance with prevailing social trends. It will be useful in
meeting social sustainable situations.
Economic sustainability
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In order to become successful in the prevailing competitive environment it becomes crucial for
the company to give focus on having relevant processing that can positively affect functioning of
enterprise. Economic sustainability is highly crucial for having relevant functioning in turn
better productiveness and stability in enterprise can be ensured. There are few economic strategy
which can be executed by company for having appropriate reliability, relevance, etc. it includes
circular economy, ecological modernization, etc. the circular economy It is one of the model
which is used for having effective sharing, leasing, reusing, repairing, refurbishing and recycling
existing products as long as possible (Sachs and et.al., 2021). Ecological modernization is the
theory which is concerned with arguing that economy benefits moves towards
environmentalism. There are several key points which are articulated by the enterprise for
having degree of pattern of social differentiation and reintegration of structure & cultural
components.
It is suggested to the specified enterprise to give focus on applying appropriate technique for
gaining higher profitability and sustainability for achieving appropriate activities. Using circular
economy can be useful can be useful in improving current performance of specified organization
as reduces pressure on the environment, security of supply of raw material increasing
competitiveness, Simulating innovation, economic growth, creation of job, etc, with utilization
of this strategy firm can gain higher & sustainability.
On the basis of provided information it can be articulated that the specified strategy is helpful in
gaining different types of advantages so that meeting objective can become possible. It leads to
result in having appropriate amount of ability to overcome the prevailing situation. In addition to
this, it can be specified that there is rise in the prices of material in the specified region which is
leading to decline the profitability margin of Patagonia which is one of the significant issue that
is required to be taken into consideration. It becomes crucial for the enterprise to highlight all
those action which are leading to declining efficiency of firm & ultimately affecting
sustainability. On the basis of this, it can be justified that there are few crucial benefits which
can be obtained by firm through applying the mentioned course of action in turn improving
prevailing circumstances can become possible.
CONCLUSION
From the above report it can be concluded that sustainability development is crucial for
organization to gain higher competitive edge. The current report has involved proper
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identification of risk and opportunities through applying techniques like SWOT and Porter's five
forces model. It has comprised strategy for environmental, social and economic sustainability
involves cradle to cradle, Caroll's CSR pyramid and circular economy respectively. It is useful
in making crucial improvement in turn higher productive outcome can be derived.
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REFERENCES
Books and Journals
Holmberg, J. and Sandbrook, R., 2019. Sustainable development: what is to be done?.
In Policies for a small planet (pp. 19-38). Routledge.
Silvestre, B.S. and Ţîrcă, D. M., 2019. Innovations for sustainable development: Moving toward
a sustainable future. Journal of Cleaner Production, 208, pp.325-332.
Polasky, S. and et.al., 2019. Role of economics in analyzing the environment and sustainable
development. Proceedings of the National Academy of Sciences, 116(12), pp.5233-5238.
Sachs, J.D. And et.al., 2019. Six transformations to achieve the sustainable development
goals. Nature Sustainability. 2(9). pp.805-814.
Vinuesa, R. and et.al., 2020. The role of artificial intelligence in achieving the Sustainable
Development Goals. Nature communications. 11(1). pp.1-10.
Sachs, J. and et.al., 2021. Sustainable Development Report 2021. Cambridge University Press.
Khosla, R. and et.al., 2021. Cooling for sustainable development. Nature Sustainability, 4(3),
pp.201-208.
Online
Carroll’s CSR pyramid. 2021. [Online]. Available through:
<https://www.toolshero.com/strategy/carroll-csr-pyramid/>.
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