Business Strategies: Patagonia and North Face Companies Case Study

This case study examines the business strategies of Patagonia and North Face, focusing on their generic strategies within a competitive market. The core problem identified is the lack of product differentiation between the two companies, despite their close relationship and similar product offerings, leading to missed opportunities for competitive advantage and sustainability. The study applies the differentiation model, analyzing how both companies primarily use high-quality products but fail to differentiate themselves effectively. The analysis highlights the limitations of a high-cost strategy targeting urban centers and proposes three strategic solutions: differentiating products through distribution channels, merging the two companies to increase competitive advantage, and differentiating products from external competitors through innovation, product features, and brand name development. These recommendations aim to enhance their market competitiveness and address the challenges posed by the dynamic business environment.

Running head: GENERIC STRATEGIES PATAGONIA AND NORTH FACE COMPANIES CASE STUDY
GENERIC STRATEGIES PATAGONIA AND NORTH FACE COMPANIES
CASE STUDY
Name
Institution

Running head: GENERIC STRATEGIES PATAGONIA AND NORTH FACE COMPANIES CASE STUDY
DEFINE THE PROBLEM SITUATION
The Problem Situation
The management of the two companies faces critical problem whereby managers are
selling the same products, and they have continued to maintain a close relationship
despite them being competitors. From this observation, it is evident that the companies
are suffering from inability to differentiate their product against those of the
competitors as well as amongst themselves. For this case study, the two companies
appear to lose sustainability development and corporate social responsibility. The two
companies are keenly concentrated on making a profit without paying much attention
to what is happening or what is going to happen to their competitors and environment.
That is why the two managers uphold that they are entitled to do less bad to the
environment (Meltzer, 2017).
SELECT A STRATEGIC ANALYSIS MODEL FROM WEEKS 1-6 AND
EXPLAIN WHY YOU HAVE CHOSEN TO APPLY THIS MODEL TO THE
PROBLEM SITUATION:
Generic Strategies-Differentiation
This model suits as the best to be applied in this case study. This can be attributed to its
elements that appear to suit appropriately. First, differentiation model can be well
applied whereby the company plans to develop a product that is different from the
competitors (Bordean, Borza, Nistor, & Mitra, 2010). This can be perfected through the
distribution channel. Patent protection, brand name, service levels, product innovation,
product features, product reliability and product quality. Both North Face and
Patagonia have applied only the aspect of quality to differentiate their products from
those of the competitors. The amazing observation is that both the two companies are
competitors but do not perceive the need of having different products (Meltzer, 2017).
The two managers have transferred their lifelong friendship and relationship to
business. Bearing in mind that businesses are termed as separate entities that are
deemed to operate in the foreseeable future, the two managers should be more focused
on designing products that are different from one another to establish a competitive
advantage in the market (Bowman, 2008).
APPLICATION OF THE SELECTED MODEL AND DISCUSSION OF YOUR
FINDINGS
Under differentiation model, the firm strives to be unique in its industry by abiding by
some aspects that are largely valued and embraced by the customers (Porter, 2008).
Both Patagonia and North Face have come about to apply this strategy to high-quality
products. However, the challenge remains that both companies to differentiate their
product from one another. Secondly, two managers are using the strategy of the high

Running head: GENERIC STRATEGIES PATAGONIA AND NORTH FACE COMPANIES CASE STUDY
cost to target the market only in the urban centres. As much this may sound like a good
strategy, it cannot supersede the benefits associated with the low-cost strategy.
The high price strategy used by the companies seem as a way to prevent low-income
earners from purchasing their products. This contradicts the companies' profit goal
because the aim objective of every business is to have a large market share by targeting
as many customers as possible. In this case, both the Patagonia and the North Face uses
differentiation strategy through manufacturing of high-quality products not to meet the
needs of the as large target market as possible but to meet the requirements only small
target market.
Patagonia and North Face can use differentiation strategy through application of
several attributes such as product innovation, product features and brand name to reach
as many customers as possible. On the aspect of product innovation, the companies can
use it develop a different variety of products apart from gearing wears. Besides, the
companies can use the element of innovation to manufacture different products that are
affordable by the different classes of the people in the target market. This means that
the company will produce products for the low-income earners, for the medium
earners, and for the high-income earners. This is because the customers of these
products do not only consume them for the sports purposes but they also use them
during the day to day activities.
Again, the two companies can use the element product features to make goods that are
different from the competitors. This will help them to create uniqueness in the market
by having specific products that can be associated with their business. For example,
today the red colour is largely associated with the Coca-Cola Company. Likewise, both
Patagonia and North Face can use colour or product make up to differentiate their
products from their competitors.
PROVIDE THREE FEASIBLE STRATEGIC SOLUTIONS/
RECOMMENDATIONS BASED ON YOUR FINDINGS
Differentiating the products between Patagonia and North Face
There is no existing different between Patagonian products and North Face products.
The two companies are selling similar products and their CEOs have gone ahead to
transfer their long term relationship into business. Therefore, there is a need for both
Patagonia and North Face to establish differentiating strategies that will see each
company design different products. However, this should not affect their relationship.
The best strategy to differentiate their products will be through distribution channels.
This means one of the company should target a different market that is not within the
geographical area of the other. The application of different distribution channels will

Running head: GENERIC STRATEGIES PATAGONIA AND NORTH FACE COMPANIES CASE STUDY
allow the two companies to continue producing similar products but selling in different
markets. The profits realized by the two companies will also increase through increased
sales.
Merging both Patagonia and North Face Companies
From the analysis, it has come out clearly that the two companies are selling similar
products and there is a very close relationship between the companies' CEOs. To avoid
competition between the two companies, it would be appropriate for the two companies
to merge and expand their business through increased business operations. The
merging of the two companies will come across with the following benefits;
First, the merged company will increase its competitive advantage in the market from
combined efforts of financial strength and innovativeness. The skills and knowledge
attributable to the employees of the two companies will be integrated and used to
develop products that have differentiating features from the “external “competitors.
Secondly, the new company will use the marketing skills and strategies available for
both companies to reach the new markets through the adoption of new distribution
channels.
Product Differentiation from External Competitors
As much there is a problem of differentiation between Patagonia and North Face
companies, the same problems exist with other external competitors. The two
companies seem to only focus on amassing as much profit as possible without putting
into consideration what are the activities of the competitors. Therefore, adopting the
attributes of brand name, product features, and product innovation, the two companies
can create a product that meets the needs of the customers even though different.
It is also important to note that, the business is always operating in a dynamic
environment. Therefore, through the applicability of innovation, both Patagonia and
North Face Companies will be able to improve their products and maintain their market
competitiveness through improved product designs. This will enable them to overcome
the competition offered by other competitors. Additionally, the company can apply
innovation element to create a brand name that is different from the competitors.

Running head: GENERIC STRATEGIES PATAGONIA AND NORTH FACE COMPANIES CASE STUDY
References
Bordean, O. N., Borza, A. I., Nistor, R. L., & Mitra, C. S. (2010). The Use of Michael
Porter's Generic Strategies in the Romanian Hotel Industry. International
Journal of Trade, Economics, and Finance, 173-178.
Bowman, C. (2008). Generic strategies: a substitute for thinking? The Ashridge Journal,
1-6.
Meltzer, M. (2017, March 7). Patagonia and The North Face: saving the world – one
puffer jacket at a time. Retrieved from Guardian News and Media Limited:
https://www.theguardian.com/business/2017/mar/07/the-north-face-patagonia-
saving-world-one-puffer-jacket-at-a-time
Porter, E. M. (2008). Competitive Advantage. New York: The Free Press.