Essay about Patagonia Hbs Case

Decent Essays

Question 1: How successful has Patagonia been as a company? Evaluate Patagonia's strategy. Analyzing the industry using Porter’s Five Forces, it can be seen that the Outdoor Apparel industry is very competitive. The threat of entry is very high, with several large conglomerates making acquisitions in the industry and established apparel companies such as Polo Ralph Lauren making expansions into sports apparel. With several brands such as North Face in the high end of the industry, as well as Columbia and several private labels dominating the middle and lower ends, a large number of substitutes are available. Buyers have large bargaining power, as end consumers could easily switch to another brand, while at the same time wholesalers are …show more content…

Dirtbags want outdoor apparel that will be able to perform in extreme conditions. Patagonia tapped into that market segment by offering high quality products that can deliver the required performance, increasing the perceived benefit received by the consumer and thereby allowing Patagonia to charge higher prices for their products. Having identified the target market of their products, Patagonia was also able to more effectively develop innovative new products. Knowing that their core users wanted high performing fabrics and that they were willing to pay for it, Patagonia was able to make the necessary investments to develop superior fabrics over longer development cycles than their competitors. The new innovations in fabrics and materials trickled down from the higher end lines like Alpine, allowing Patagonia to add value across all their lines and maintain a high price point. To develop the innovative and high-quality products required by their customers, Patagonia succeeded in a third strategic area, specifically quality control. Despite being a huge cost for Patagonia, quality control was necessary to enable them to deliver on the two aforementioned strategic goals. To obtain a high level of quality, Patagonia developed long term relationships with reliable vendors for production of goods and procurement of materials, which resulted in a drastically lower defect rate than competitors

Get Access