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Patagonia
- 1. By Tori Memmesheimer(vmemmes)
- 2. PROBLEM Patagonia produces high- quality,environmentally- friendly outdoor clothing and sportwear.
- 3. PRODUCTS • Clothing • Sportswear (climbing,skiing, surfing, etc.) • Backpacks, bags, and sleeping bags
- 4. Lost Arrow Project FletcherChouinard Designs
- 5. PERSONA Megan is a25-year-old living in Boulder. During the week, she works in marketing, but Megan lives for the weekends. She is an avid rock climber and climbs whenever she can. Megan is also very environmentally conscious — she never uses plastic water bottles, straws, or plastic bags, drives a Prius, and is working on being vegetarian. Megan wants to make sure that the clothing she wears climbing is tough enough to withstand the elements but is also made by a company that cares about the environment as much as she does.
- 6.
- 7. BUSINESS MODEL •Sell high-qualityclothing with high environmental and social value •By building identity as environmentally-conscious company
- 8. 195 7 Yvon Chouinard, Patagonia’s founder, startsmaking climbing equipment Chouinard Equipment founded 196 5 197 3 Patagonia is founded HISTORY
- 9. HISTORY 201 1 Don’t buy thisjacket ad Rose Marcario becomes CEO 201 2 201 5 Worn Wear Wagon launched New mission statement: “Patagonia is in business to save our home planet” 201 8
- 10. LEADERSHIP: ROSE MARCARIO •CEO since 2012 • Previously COO and CFO since 2008 • Focused on scaling the company “…it’s about making Patagonia as successful as possible to show that business can be a force for good; the example works.”
- 11. WHAT’S HOT: WORN WEARRECRAFTED • Worn Wear pop-up store opened last Thursday in Boulder • Also sold online
- 12. SECRET SAUCE • Provencommitment to the environment • History • Clothing quality • Worn Wear • Other environmental efforts
- 13. COMPETITION Patagoni a The North Face Columbia Sportswea r Marmot Arc’teryx Lifetime warrantyand repairs Uses organic and recycled materials B-Corp certified Privately- owned
- 14. PREDICTION Success! 1. Proven businessmodel 2. Continues to innovate and develop new ventures • Patagonia Provisions • Worn Wear 3. Increasing trend of companies and consumers who care about the environment
- 15. REFERENCES • https://www.patagonia.com/home/ • https://www.patagonia.com/company-info.html •http://www.patagoniaworks.com/faq • https://www.patagoniaprovisions.com/ • http://soldiersystems.net/2018/05/16/the-lost-arrow-project-by- patagonia-military-alpine-recce-system-program-history/ • http://tinshedventures.com/ • https://www.patagonia.com/static/on/demandware.static/-/Library- Sites-PatagoniaShared/default/dw883f0dc2/PDF-US/2016-B- CorpReport-031417.pdf
- 16. REFERENCES (CONT.) • https://www.patagonia.com/static/on/demandware.static/-/Library- Sites-PatagoniaShared/default/dw824fac0f/PDF-US/2017-BCORP- pages_022218.pdf •https://www.patagonia.com/static/on/demandware.static/-/Library- Sites-PatagoniaShared/default/dw08d0f6ed/PDF-US/2018-B- CorpReport-050919.pdf • https://www.inc.com/lindsay-blakely/patagonia-2018-company-of-the- year-nominee.html • https://digital.hbs.edu/platform-rctom/submission/patagonia-a-focus- on-a-sustainable-model/ • https://www.businessinsider.com/patagonia-business-strategy-2014-9
- 17. REFERENCES (CONT.) • https://www.patagonia.com/company-history.html •https://crm.org/articles/patagonias-customer-base-and-the-rise-of-an- environmental-ethos • https://consciouscompanymedia.com/sustainable-business/strategy- models/patagonias-ceo-says-conscious-leaders-need-stand-something/ • https://gearjunkie.com/patagonia-worn-wear-shop-upcycled-recycled • https://www.fastcompany.com/90430378/patagonias-new-line-is-made- from-old-clothes-damaged-beyond-repair • https://bcorporation.net/directory
- 18.
Editor's Notes
- #2 Hi everyone, my name is Tori and I will be presenting on Patagonia today. I chose to do my presentation on Patagonia because about a year ago, I was listening to a podcast called How I Built This. It talked about the founder of Patagonia and how Patagonia became so successful. This podcast really piqued my interest in Patagonia because of how unconventional the company is. The founder, Yvon Chouinard, is a self-described “reluctant businessman,” and much of the company’s focus is on saving the planet. In this presentation, I will tell you guys more about this unconventional company and explain why it’s so successful. 0:30
- #3 The problem that Patagonia solves is the production of high-quality, environmentally-friendly outdoor clothing. Environmental activism is at the core of Patagonia’s philosophy. Their mission statement is “We’re in business to save our home planet.” 0:15
- #4 Most of Patagonia’s products are in outdoor apparel. They produce and sell high-quality outdoor clothing articles like t-shirts and jackets for men, women, and children. Their Snap-T Pullover is especially popular and is pictured in the top right on this slide. They also sell some sportswear clothing, like for trail running, climbing, and surfing, as well as backpacks, bags, and sleeping bags. Most of their clothing has earth tone colors, and some have vibrant colors as well. 0:20
- #5 Patagonia, Inc. is part of a collective company called Patagonia Works. The other companies in Patagonia Works include Patagonia Provisions, which sells food for backcountry hikers, and the Lost Arrow Project, which manufactures cold weather combat uniforms for US special forces. There’s also Worn Wear, which produces used and upcycled apparel, and Fletcher Chouinard Designs, which manufactures surfboards. Tin Shed Ventures is Patagonia’s venture capital fund for investing in environmentally- and socially-responsible start-ups. In this presentation, I will be focusing on Patagonia, Inc., the apparel company, but I wanted to show that the Patagonia companies are much bigger than just Patagonia apparel. 0:40
- #6 The persona for Patagonia is anyone who cares about the environment, especially people who partake in outdoor sports, like Megan. Megan is a… Because Patagonia is such an environmentally-conscious company, it really caters to this type of persona. 0:40
- #7 Patagonia is a privately-owned company, which means its difficult to find financial information about it. However, since 2002, Patagonia has contributed 1% of its annual net revenue to environmental non-profits. This contribution is called “1% for the Planet.” This graph is based on those contributions, and it should only be viewed as an estimate of Patagonia’s annual net revenue. It is also reported that since 2012, which was when Rose Marcario became CEO, Patagonia’s revenue and profits have quadrupled, and that sales exceeded $1 billion in 2017. Although all this revenue information is estimated, it’s clear that Patagonia is very profitable, and that its profits have been growing rapidly in the past few years under Rose Marcario. 0:50
- #8 To appeal to the environmentally-conscious persona like Megan, Patagonia’s business model focuses on building its image as an environmentally-conscious company. Patagonia does this through its various initiatives, like its annual 1% for the Planet contribution and its investments in environmentally-responsible start-ups. It also uses new technologies to recycle old materials and develop better and more eco-friendly materials. Patagonia uses a circular economy model by repairing and upcycling worn clothing. By making clothing that is both high-quality and environmentally-conscious, Patagonia places a lot of social and environmental value into its clothing and is able to charge a premium price for them. 0:50
- #9 Patagonia’s story started over 50 years ago, in 1957. It’s founder, Yvon Chouinard, was 18 years-old and an avid rock climber. At the time, he was unsatisfied with soft-iron pitons, which are a climbing tool pictured on the slide, because they had to be left in the rock. He decided that he wanted to use steel pitons instead, because they would be reusable, but they were not being manufactured anywhere in the US. So, Yvon purchased a coal-fired forge and taught himself how to blacksmith, so that he could make his own. Word spread about Chouinard’s steel pitons, and he soon was in business, selling pitons for $1.50 each in the winter when it was too cold to climb and rock climbing the rest of the year. He did this for several years, until eventually he couldn’t meet the demand for his pitons. In 1965, he went into business with an engineer named Tom Frost, and they started Chouinard Equipment. During the nine years that Frost and Chouinard were partners, they redesigned and improved almost every climbing tool, to make them stronger, lighter, simpler, and more functional. By 1970, Chouinard Equipment had become the largest supplier of climbing hardware in the U.S. However, Frost and Chouinard eventually realized that their pitons were damaging the fragile rockface, and they decided to begin phasing out their production of steel pistons in favor of the more environmentally-friendly aluminum chocks. In the 60s, men did not wear colorful outdoor clothing, and the standard climbing uniform was cut-off chinos and white dress shirts. On a climbing trip to Scotland in 1970, Chouinard bought a blue and yellow rugby shirt to wear climbing. The collar kept the climbing hardware from cutting into the neck. Back in the States, the shirt was popular, and Chouinard realized that he should sell climbing clothing in addition to climbing tools. Choosing to create a company separate from Chouinard Equipment, he founded Patagonia in 1973. 1:45
- #10 That was the story of how Patagonia was founded. Let’s jump forward a few decades to 2011. Around Black Friday in 2011, Patagonia aired a commercial called “Don’t Buy this Jacket.” The ad talked about the environmental cost of buying one of its jackets and urged consumers to buy a second-hand jacket instead. That year, the company’s revenue grew by about 30%. In 2012, Rose Marcario becomes CEO, ushering in an increase in profits and a focus on scaling the company. More on her on the next slide. In 2015, Patagonia launches the Worn Wear Wagon, a mobile repair shop that travels around the US, repairs Patagonia gear, and teaches consumer’s how to fix it themselves, all for free. In 2018, Patagonia changes its mission statement to show its even greater focus towards helping the environment: “Patagonia is in business to save our home planet.” 0:55
- #11 Rose Marcario is the current CEO of Patagonia. She has been the CEO since 2012. She was previously a very successful COO and CFO at Patagonia. Yvon Chouinard has called her the best leader Patagonia has ever seen. Her focus as CEO has been on scaling the company, and profits have followed. Her goal is to make Patagonia as successful as possible to show that business can be a force for good. 0:25
- #12 Last Thursday, Patagonia opened a pop-up store in Boulder that will be around until February 2020. Customers can buy clothes from Patagonia’s Worn Wear Recrafted Collection that have been upcycled from clothes that could not be repaired. Most of carbon emissions in the clothing industry come from the production of raw materials and manufacturing. The longer clothes are used, the smaller their environmental footprint. Patagonia has always offered a lifetime guarantee and repairs for its clothes, but this new Worn Wear Recrafted collection offers a way to extend the life of clothes that can no longer be repaired. This further diminishes the environmental cost of Patagonia clothing. 0:35
- #13 Patagonia’s proven commitment to the environment is what makes its clothing so special. Patagonia clothing does have superior quality, and its designs are on point, but its really this environmental factor that puts Patagonia so far apart from its competitors. Ever since Chouinard’s decision to manufacture reusable pitons in 1957, Patagonia has been environmentally-focused for the entire history of the company. It’s high quality clothing and Worn Wear repairs keep the clothing in circulation for a long time, thus mitigating the environmental impact of manufacturing the clothes. It’s commitment to other environmental initiatives is shown by its investments in other companies through Tin Shed Ventures and its annual 1% for the Planet contribution. 0:40
- #14 Patagonia does have many competitors, and most of these competitors also care about the environment. Patagonia’s main competitors are North Face, Columbia, Marmot, and Arc’teryx. As you can see, most of these companies offer lifetime warranties for their clothing and use organic and recycled materials in at least some of their clothing, but Patagonia’s larger environmental focus can clearly be seen by its B-Corp certification. A B-Corp is a “benefit corporation,” and these companies face the highest standards of social and environmental performance, public transparency, and legal accountability to balance profit and purpose. There are over 2,500 B-Corp companies around the world, but none of Patagonia’s major competitors are. Furthermore, Patagonia is still a privately-owned company. This allows it to restrict its growth in favor of quality, innovation, and the promotion of anti-consumerism. 0:45
- #15 I believe that Patagonia will continue to be successful for three main reasons. 1. It has a proven business model. Because most companies are trying to decrease their environmental impact, it’s clearly important. But Patagonia is even more committed and has been for the past 50 years. It has proven that its business model is successful by its increases in revenues and it will only become more successful in the coming years, as more and more people are concerned with quality and the environment. 2. It continues to innovate and develop new materials and ventures, like Patagonia Provisions and Worn Wear. 3. People are becoming increasingly environmentally-conscious and focusing more on quality over quantity. Thus, more and more people will be attracted to Patagonia’s brand identity of an environmentally conscious company. These three reasons suggest that Patagonia will continue to be successful in the following years. 0:50