Patagonia Strengths & Weaknesses SWOT Essay

1658 Words Nov 22nd, 2014 7 Pages
1. Strategy: Patagonia’s product differentiation as their strategy, through CSR, which involves sustainability, philanthropic initiatives, moral obligations, and reputation. They operate in ways to secure long-term economic performance by avoiding short-term behavior that is socially detrimental or environmentally wasteful. They do this all while keeping their quality high and having their core consumers in mind.
Activities Patagonia employs to support the customer’s willingness to pay: Suppliers & Resources
Works closely with suppliers
To create the technical innovations required
Collaborates with fabric and fiber producers to create superior fabrics
Does not buy commodity fabrics
Over ½ the products were made in North America & Europe
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From 1991 to 2003, a 13-year period, annual net sales have increased an average of 8.4% annually
2003 they had a 1.6 % increase in net sales
2003 the clothing industry reported net sales down by 6% to 7% (http://www.answers.com/topic/women-s-clothing-stores)
Gross margin is at an average of 47.1%, went up 9% from 1991
SG&A Expenses decreased by almost 14% from 1991
Operating Margin increased almost six folds, from 2.1% in 1991 to 11.75% in 2003

To justify these philanthropic initiatives:

Philanthropy
Environmental initiative
Social Impact
Main Stakeholder
Cost
Strengthen long-term competiveness (Y/N)
Environmental Grant Program
Helps sustainable agriculture, water/marine, forests, community activism, and biodiversity
Outside Environment Groups $ 1,862,901
Some Yes* Some No**
Non-cash Donations
Create advocacy ads
Environmental Groups $ 318,149
Not Justified**
Company Campaigns
Educate staff and consumers on particular issues staff and consumers $ 225,933
Yes Justified*
Employee Internship Program
Strategic alliance to learn from each other
Employees
$ 58,000
Yes Justified*
Conservation Alliance
To help encourage others to donate to environmental organizations
Environmental Organizations $ 10,000
Not Justified**
1% for the Planet
Gives grants to grassroots environmental organizations
Grassroots Environmental Organization $
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