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PATAGONIA - Coggle Diagram
PATAGONIA
PRODUCT LINE & PRODUCT DEVELOPMENT
- 4 main lines
- Sportswear 47% of REV)
- Tech Outerwater (30% of REV)
- Tech Knits (12% of REV)
- Hard Goods (6% of REV)
- Average age consumer --> 38 years
- Price 20% higher than the competitors due to
QUALITY
- Simple
- functional
- multifunctional (jacket for ski, sailing, etc..)
REDUCE ENVIRONMENTAL IMPACT
- Reduce packaging
- Only organic cotton
- etc...
INNOVATION
- 3 M$ annualy invested in R&D
- Designers work with an entrepreneurial spirit
- 100% recyclabe zippers, pioneering fabrics, etc..
SALES
WHOLESALE (44% of Sales)
- 1000 dealers
- 2010, 415 M$, 45% GM
- Competitors have 4000 dealers (Columbia)
RETAIL (33%)
- 26 stores in USA, 52 worldwide
- a place to connect to Patagonia beyond commerce
- 100 M$ in sales, 65% GM
DIRECT CHANNELS (23%)
- 75 M$ in sales, 68% GM
- Catalog with only 60% of space for selling products
- Competitors have 90-95% space for selling products
- 2010, 10K people visited Patagonia's website each day
PATAGONIA ENV COMMITMENT
- Provide and implement solutions for the environmental crisis
- Gave 1% of Rev for the Planet, alliance of 1,200 companies in 38 countries
- Office Recycling practice more than 96% of waste recycled
- Paper circulation reduction increased by 65%
PHILOSOPHY
- Lead an examined life
- Clean up our won act
- Do our penance
- Support civil democracy
- Influence other companies
PRODUCT LIFECYCLE INITIATIVE: "REDUCE, REPAIR, REUSE and RECYCLE
- 2010 Initiative
- Mutual contract among Patagonia and customers
- Customers asked to repair their products as many times as possible with postage-paid refund, reuse or reselling
- Online swap market
- Donate to charity org
- Initiative would increase costs while incentivating new opportunities and visilibity/sales
SERVING AS A MODEL FOR BUSINESS
- Env commitment gave the company its competitive advantage but also obliged to share broad sustainability practices
- Impossibile to become zero env impact company but we'll do our best and we'll try to make also other companies to switch
ORGANIC COTTON
- 1996 only organic cotton
- More costs
- Limit availability of fabric
- Changes in supply chain
- Loss in quality
- Impacted the market
- organic cotton market 40% yearly growth
Business conducted upside down and inside-out
- Dirtbag --> temp jobs and long summers
HISTORY
- 1957, started a business making pitons , born Chouinard Equipment
- 1966, set up shop in Ventura (CA) near beach
- 1970, largest provider for climbing hardware
- 1979, founded "Patagonia", an apparel line
- 1980s, Patagonia 100 M$ REV, C.E. sold
- 1990s, 20% workload cut due to recession however there was 6,7% growth
- 2000, 200 M€ REV
MISSION and VISION
- Challenge the conventional wisdom and present a new style of responsible business
- Goal orientation on what's right not on profit
- Build the best product, cause no unecessary harm, and use business to inspire and implement solution to the env crisis
- The values of the mission statement are entreched in the walls of Patagonia, in every employee and every decision
- 1998, chemicals removed from its product
GOVERNANCE
- 3 different CEO from 1990s to 2000s
- The values are so deep and is hard to find a CEO that will grow with the company
- Chouinard experienced his theory called Management By Absence
- 2000s sales average growth 6% per year
- Target is sales growth 10% per year
- Better inventory management, inventory shortage cause inability to satisfy customers
PRODUCTION & LOGISTICS
- Partners must have the same values of Patagonia
- 1/3 of Patagonia good costs come from manufacturing, 2/3 from raw materials
- 80% of raw materials are accounted by fabric that cost 10-15% higher than competitors
- 2010, 41 worldwide partners from 200 in 2003
- 85% of manufaturing outsourced to North America facilities
- Supplier products are shipped to a distribution center in Nevada in which you can access to outdoor recreational opportunities
- It's also a Service Center that repairs, refunds and replaces products
MARKETING
- less than 1% of sales, far less competitors
- Adv with edu messages, decrease consumption
- Receive free publicity
- 1994, from a plastic bottle to apparel
- AMEX Project --> 3 M$ cost for AMEX but it was perceived as a Patagonia spot, donated to ONGs
- Publicity also generated side effects
- 1990, consevative boycott it due to Planned Parenthood support
- 2007, the ambassador Dean Potter climbed the Delicate Arch (Utah) that was forbidden to
HUMAN RESOURCES
- The employees must share the values
- They had to surf when needed
- 2 paid sabbatical months for env activities
- 2K for hybrid cars
- bail payment if arrested during nonviolent expression of activism for env causes
- Both maternity and paternity leave
- Company as a family
- trips together
- HQ had childcare factilities (1984)
- Buildings in an env efficient way, e.g. panel
- The cafeteria is organic, mostly vegetarian
- Best-company-to-work-for 10K CV for 100 seats
- 2007, less than 5% turnover, 53% have at least 6 years experience in Patagonia