1. Patagonia’s Current Strategy: Key Processes and Customer Perception
In the context of our business model our number one key process is our Rules and Norms (a complete breakdown of Patagonia’s current business model and a to-be-proposed business model are available for review in Exhibit I). This ethos that started with the founding of Chouinard Equipment continued through the creation of Lost Arrow and indeed Patagonia. Our self-proclaimed “dirtbag” culture has resulted in some unorthodox business practices over the years. We pride ourselves on our efforts to reduce the social and environmental impact of the lifetime of the goods and services we produce. This is something that our competitors recognize but do not focus efforts on; for…show more content… However, once again (as shown in Lost Arrow: Financials, Exhibit III) we have been operating in the black for the last decade.
This may also be explained by our company ethic. We focus on a curbing of consumption and that focus has limited how much we are willing to spend on advertizing. Conversely our competition holds advertisement as a high priority when establishing sales and brand. This observation is not trivial and could more than account for the balance between our costs and those of our competitors.
3. Moving Forward
As discussed the current model for Patagonia works. You can be a “dirtbag” and make make money. The question is how do we continue on with the goal of 10% growth per year for the next five years? Whatever we choose we must operate within that moral fiber that helped us to achieve who we are today. Following are two suggestions for how to move forward, one uses our current business model, the other proposes a change. Please reference Exhibit I for business model analysis and Exhibit II for strategy.
Strategy: Current Business Model
Tactic One: A Focus on Retail – Our best margins are derived from retail sales however this accounts for just one third of our sales volume. The best type of marketing asset we have are our retail employees. Our Dirtbag Ambassadors are out there skiing, snowboarding, climbing, camping, bouldering, and living the life that Patagonia wants to be an