Patagonia Inc

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A passion for the planet
“Most people want to do good things, but don’t. At Patagonia, it’s an essential part of
your life” -Yvon Chouinard (Founder of Patagonia)
INTRODUCTION

Patagonia is an American clothing
company that sells outdoor clothing
ranging from sports, travel, and
everyday wear. The company was
founded by Yvon Chouinard in 1973 and
is based in Venture, California. The
company went broke in 1989 and split
into a company called Black Diamond
Equipment that sells climbing gear,
combined with Patagonia that sells loft
goods.

They focus on a narrow segment of customers, who are willing to pay a premium price.
They compete in the high end outdoor apparel industry. Patagonia’s product line
consists of four main product categories:
Sportswear
Technical
Outerwear
Hard Goods
Technical Knits(baselayers with special
fabric treatment)
HOW IS THE
ORGANIZATION
SOCIALLY
RESPONSIBLE

Patagonia values working with friends, hiring selfmotivated intelligent employees, and finding ways to
be responsible by restoring or reusing as much as
possible. For example, when opening a retail location,
they choose to open up shop in old buildings that have
been restored. Keeping true to the vow Yvon took to be
as ethical as possible.

Patagonia is also keen on refurbishing products. They
repair products at a fair price rather than having
customers buy a whole new products, valuing ethical
responsibility more than making a profit. They repair
products at a fair price and encourage customers who
want to throw a product away to donate them charity
instead.

Patagonia regulatory audits its factories. It audited 90%
of the factories it uses in 2010. For its material
suppliers, they have an Environmental Health and
Safety requirements as well as Raw materials Social
Responsibility Program. Under this program, suppliers
must audit their factories to measure whether they are
in compliance with safety, social responsibility, and
environmental criteria as well as improvement.
What is
ethical
business
behavior?
Business ethics ensures
the level of trust exists
between consumers and
various forms of market
participants with
businesses.
Ethical business behavior
is when a company follows
ethical standards and help
your business to build
-customer loyalty
-customer trust
-goodwill
HOW DOES PATAGONIA PRACTICE ETHICS

Has strong animal welfare policies. They do not use angora, leather or
fur in their products and they publicly advocate for animal welfare.

They reject fast fashion by creating high-quality, long-lasting products
and offer a repair and reuse program.

Patagonia is currently working with bluesign® technologies in its quest
to reduce resource consumption. For those resources that cannot be
reduced, bluesign helps Patagonia to use more sustainable resources
that will have less of a negative impact on the environment .

Patagonia regularly audits its factories. It audited 90 percent of the
factories it uses in 2010. It also scores factories based on how they
measure up to social responsibility and environmental goals.

Since 1985 Patagonia has committed to donate 1 percent of its sales
to environmental organizations around the world that work to
conserve and restore the natural environment.
HOW BEING
SOCIALLY
RESPONSIBLE
BENEFITS:
The organization: Patagonia shows no signs of slowing
down. The company has become a successful and
sustainable privately held organization since its
beginnings in 1972. It has been able to maintain
average growth rates of 3-8% annually and has annual
sales of approximately $540 million.
Employees: Patagonia believes in a work/life balance
philosophy. Due to this strong relationship with its
workforce, the company has a 25 percent turnover
rate compared to the industry average of 43.8
percent.
Local community: Patagonia, the company seeks to
make quality products that will last a long time.
Patagonia also posts advice on its website for
consumers on how to take care of problems with their
clothes so they will not have to be thrown away.
THE COSTS OF ETHICAL BEHAVIOUR
In 1996 Patagonia
made the expensive
switch to organic
cotton and remained
committed to this
decision despite a loss
in profit in the first
two years.
In 1996, Patagonia
became a founding
member of FLA (Fair
Labor Association),
which conducts audits
and training on factory
conditions. In addition,
Patagonia regularly
audits its factories.
Patagonia audits 100% of their
finished-goods factories for
social and environmental
concerns. This includes most
subcontractors for their
primary cut-and-sew
facilities. Patagonia pays for
all social audits they schedule
directly. They also monitor
their largest raw-material
suppliers and employ an audit
and remediation process at
these facilities. Through this,
Patagonia is attempting to
incorporate corporate social
responsibility among all of its
stakeholders.
Patagonia often require
factories to participate in
specific training,
education or continuousimprovement programs,
which Patagonia helps pay
for in part or full.
Patagonia risked 20% companies stake ($20
million) on organics. Organics cost triple the
price of conventional cotton (100% - 500%).
Patagonia meets their customers needs by
producing products that are simple,
functional, and multifunctional. In order to
ensure such quality, Patagonia spent $100,000
on field testing performed by ambassadors
who checks the quality of their different
products.

Patagonia's Common Threads InitiativeCustomers who identify with this value stick
with Patagonia, as they receive not just a
functional, but strong emotional benefit from
Patagonia products.

Recycling initiatives costs over $60,000 yearly.

They invested $3 million annually in research
and development, which includes a lab
developing and testing new materials.
Strong relationship with
its workforce- Patagonia
averages nine hundred
applications per job
opening, providing it with
the opportunity to hire the
best talent.
The Footprint Chronicles
is another development
that allows users to go
online and view a map of
Patagonia's suppliers. The
idea is to create
transparency in
Patagonia's supply chain so
that consumers can see
exactly where products are
coming from.
Benefits - To Patagonia, It’s
Employees & It’s Customers
Patagonia has been
continuously named to
Forbes and the Ethisphere
Institute's list of the
world's most ethical
companies as a result of
their ethical conduct.

The people who work at Patagonia, from the CEO to sales clerks, strongly believe
in the company’s ethos, and these efforts have paid off—the “Don’t Buy This
Jacket” campaign led to a 30 percent increase in sales, and the 2016 pledge to
donate its Black Friday proceeds to environmental charities garnered a
record $10 million in sales.
“Instead of putting the
money
back
into
our
business, we’re responding by
putting $10 million back into
the planet,” Rose Marcario,
the company’s CEO, wrote in
a statement published to
LinkedIn.
Reference

https://harbert.auburn.edu/binaries/Patagonia.pdf

https://www.bouvierkelly.com/patagonia-brand-loyalty/

https://goodonyou.eco/how-ethical-is-patagonia/
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