Mukul Mathur

Evaluate Patagonias business model. How important to Patagonias

business model is its environmental position?
Achieving growth, being profitable, and minimizing ecological expenses are the current goals
of Patagonia. Its business model is based on the philosophy of making minimum
environmental impact along the overall value chain to increase the productivity of natural
capital. At the core of this business model is the companys value proposition sustainability,
which acts as both the primary source of its competitive advantage and the basis of its
differentiation strategy. To differentiate itself, Patagonia has effectively positioned itself as a
supplier of superior quality products and at the same time it has continued its commitment
towards minimizing its impact on environment, even if it calls for trade-offs (ex:- by not using
anti-odour chemicals or not using conventional cotton).
Patagonia aspires to build a sustainable business model which is profitable, grows, and solves
environmental crisis. It includes value propositions that are social, environmental &
economic. To be successful, the model should be able to distribute these values along the
whole market chain that includes suppliers, competitors, customers, employees and external
environment. Since Patagonia has positively influenced various players both in the internal
and external environment, so we can confidently say that its environmental position is very
important to its business model.

What is your assessment of the Product Lifecycle Initiative (Reduce,

Repair, Reuse and Recycle)?
Patagonias Product Lifecycle Initiative is based on the marketing principle of maximizing
consumer repeat purchases. This will be a Sell Less and Make More model. On one hand the
company intends to sell less of the physical product by extending its use through repairs and
reuse. On the other hand it aims to charge more by differentiating its product through quality
and value added (environmental benefits through recycling, reduced use of material etc.).
Patagonia may in-fact see an increase in sales through increase in number of buyers, who are
attracted through positive word of mouth publicity, or it could extend its reduce, repair,
reuse, recycle model in the backward direction of its value chain by working for retailers to
recycle clothing that is too worn to be sold. Either way, the Product Lifecycle Initiative aligns
well with the existing positioning of the company and will act as a strong additive to its existing
differentiating factor, thereby adding to its competitive advantage.