North Face & Patagonia: Strategic Solutions for Supplier Management

This report examines the supplier management challenges faced by North Face and Patagonia in their pursuit of sustainable and environmentally friendly products. The core issue revolves around the difficulty in securing suppliers who share the companies' vision for corporate social responsibility (CSR) and are capable of producing eco-friendly materials. The VRIO model is applied to analyze the internal resources and capabilities needed to achieve a sustainable competitive advantage, focusing on the value, rarity, and imitability of resources related to suppliers. The analysis reveals that suppliers' resistance to adopting CSR-focused strategies is a key problem. Based on the findings, the report recommends three strategic solutions: (1) establishing clarity regarding the value of the products and the resource, along with new distribution channels and cost management strategies; (2) finding new suppliers who could deliver the desired raw materials and sharing business practices; (3) addressing cost concerns by identifying efficient processes to manage eco-friendly resource costs. The report emphasizes the need for green supply chain management, supplier engagement, and cost-effective production to achieve sustainable goals.

BRIEFING DOCUMENT
Please be aware that your submission should total and not exceed 1000 words.
I. PREPARED FOR:
II. YOUR TASK:
II.i. DEFINE THE PROBLEM SITUATION:[identify one managementproblemof
the case study and briefly explain it –100 words max.]2 marks
The cases study gives insight into the business of two companies North Face and Patagonia,
both dealing with supplying products hardcore outdoor adventure. However, the products are
taken by urban customers too who do not engage in any adventurous activities. Hence, with
the idea of consumerism, they have decided to sell environmental friendly products as much
as possible to reduce the carbon footprint of products. Their aim is to prevent the earth from
any harm in return of monetary profits (Meltzer, 2017). However, the main management
issue for them in the drive for sustainability and corporate social responsibility (CSR) is they
are finding issues in getting suppliers with the same vision. Developing a fully environment
friendly product is a challenging task and the main challenges for the company is that they are
not getting enough suppliers to fulfill their demand. The company are splitting major suppliers
because they are unwilling to make the changes. Hence, managing the supplier’s contribution
towards sustainability and CSR is the main problem for the company.
II.ii. SELECT A STRATEGIC ANALYSIS MODEL FROM WEEKS 1-6 AND
EXPLAIN WHY YOU HAVE CHOSEN TO APPLY THIS MODEL TO THE
PROBLEM SITUATION: [mention and explain why you think your selected
model is the appropriate to do the analysis of the management problem – 150
words max.]2 marks
To solve problem related to management of business and suppliers to create environmental
friendly products, VRIO/VRIN model has been selected. This is an effective model to make
one’s business unique and identify the resource and capabilities needed to create a
sustainable competitive advantage. This model is in relevance with the management problem
in the case study and it will help to identify the reasons for management problems and plan
appropriate solutions too. VRIO standards for valuable, rare, inimitable and well-organized. It
will help build core competencies required for sustainable business and guide strategy
formulation and strategy implementation too. The VRIO model is specifically effective for
analysis of internal resource (Min et al., 2016). This will help the owner of North Face and
Patagonia to determine the strategies that is needed to sustain competitive advantage and
manage suppliers concern too (Meltzer, 2017). The main concern for supplier is related to
management of resource to produce environment friendly products and VRIO model provides
the approach to analyse resource of the company.
II.iii. APPLICATION OF THE SELECTED MODEL AND DISCUSSION OF YOUR

FINDINGS:[apply the selected model and discuss your findings – 300 words
max.]
3 marks
In relation to the management of suppliers concern and resistance against producing
sustainable non-damaging product, the VRIO model can help to identify the reasons for such
issues and problem in switching CSR approach of business. The following element related to
the management problem can be found out from VRIO model:
 The first question is related to whether the resource can add value to the firm and
defend against threat?
NorthFace owner’s response towards realization of damaging effect of the apparel industry
was to take direct action to save the earth and Patagonia’s response was run business in a
way to minimize environmental effects. To support suppliers to meet this strategic vision,
evaluation of resource is important. The resource of both company is valuable as it is used
both by professional adventures as well as common person. However, their aim is to enhance
the perceived consumer value for product by using materials that are recyclable and
environmental friendly. This will differentiate them and lead to competitive advantage too.
Hence, reviewing the value of the resource is most important before solving the management
problems.
 The second question is whether the resource is rare?
The answer is yes because rarity of the resource is the major reason for resistance of suppliers
and their inability to agree to the CSR related strategic goals of the company. Hence, in such
situation there is a need to find out how suppliers can provide almost 90% of non-damaging
products for environment.
 The third question is whether the resource is costly to imitate?
For this question also, the answer is yes because cost and efforts is also the factor for which
suppliers do not wish to fulfil the demand of supplying low footprint products to owners of
the company.
II.iv. PROVIDE THREEFEASIBLE STRATEGIC SOLUTIONS/
RECOMMENDATIONS BASED ON YOUR FINDINGS:[Based on your
analysis and findings present three feasible strategic solutions/
recommendations for the management problem you chose – 450 words max]
3 marks
Recommendation 1:
Based on the key findings coming out from application of the VRIO model in case scenario, the

following strategic solutions is recommended for solving the management problem:
1. To ensure that suppliers meet the strategic vision of the company, it is necessary to
establish clarity regarding the value of product. The suppliers must be made aware
regarding the value of resource for business as well as their own profit. As the main
problem of suppliers was to identify renewable environment friendly products and
manage cost, this problem can be managed by accessing the scarcity of raw materials
and identifying new distribution channels. There is also the need to find strategies to
lower production cost and preserve customer value of product too (Kumar, Jain, &
Kumar, (2014). Green supply chain management would be an effective approach to
select safe product and design production process that uses less energy. If past
suppliers cannot fulfill the demand for eco-friendly products, then identifying new
suppliers with proven records manufacturing environmental friendly outdoor product
is important (Fahimnia, Sarkis, & Davarzani, 2015).
Recommendation 2:
As the rarity of finding raw materials for eco-friendly product was a major problem for
suppliers, engaging suppliers to fulfill the business vision will depend upon finding other rivals
in market who could deliver the desired raw materials. This problem can be solved by
effective business partner selection and sharing the business practice with them to best align
the production process to go green (Yan, Chien, & Yang, 2016). These activities can help the
company to gain competitive advantage as well as attract new customers towards product.
Another advantage for North Face and Patagonia is that earlier the owners had the worry that
the more consumers buy their product, the more they contribute to environmental damage.
However, with the production of green products, more resource can be used without any
problem and it will reduce overall production cost. The only thing needed is to track down the

best production process according to the context of business
Recommendation 3:
Another findings coming from the application of VRIO model was suppliers were not ready to
meet strategic aims of Patagonia and North Face because of the cost associated with
producing environmental friendly product. Hence, cost issue in managing suppliers can be
handled by identify adequate process to manage cost of eco-friendly resource. The main goal
in transforming into a green organization would to reduce emissions during productions,
minimize energy consumption and reduce the life cycle cost associated with product
Mathiyazhagan et al., (2013). Attention is required in product packaging too to save the
environment from harm and reduce cost.

Reference
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https://www.theguardian.com/business/2017/mar/07/the-north-face-patagonia-
saving-world-one-puffer-jacket-at-a-time
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