Patagonia Inc. - The Sustainable Outdoor Clothing Brand

Robust environmental and animal welfare responsibility programs

Patagonia Inc. is an American outdoor clothing brand that was established by Yvon Chouinard in 1973 the organization is based in Ventura in California. The organization has its operational hub above 100 countries across the globe and they have its factories in 16 countries (Eich, 2021). Patagonia mostly used recycled raw material and their products have lifetime return and repair facilities though Patagonia uses the animals in their supply chain management yet they try to maintain it within the limit. The organization has taken several programs and policies to make its products and organization the most sustainable brand in the market.

The organization has taken a robust environmental and animal welfare responsibility program to guide the supply chain department to make the company products and services according to the environmental prospects (Alejo Giraldo, 2021). Patagonia has used regenerative organic certified cotton, spandex cotton, organic cotton, and recycled cotton for their product’s superior quality (Peri et al., 2020). As per the data availability, the clothing and footwear brand in the world is primarily responsible for nearly 10% of the contribution towards the emission of greenhouse gas and it is evident that the textile industry solely releases more than 1.2 billion tons of CO?e into our atmosphere every year (Walentowski et al., 2020). The cleanliness and disposal of textile products have impacted the emission of greenhouse gas. Patagonia has taken initiatives for that otherwise it will work as catastrophic effects on the climate. Over the years, the organization has taken progressive coalitions to bring change in the sector, comprising of Sustainable Apparel Coalition and B Lab (Pérez et al., 2019). Patagonia is progressively focusing on the improvement of the lives and the workplace atmosphere and the organization is focused to balance the need of the operations segment of the organization with the society.

            According to its sustainability program, Patagonia has set three milestones that need to be achieved by 2025 (Park, 2020). The organization has decided to stop using virgin petroleum fiber in its products and focus on organic product materials. They have another set target to be achieved by 2025, that the packaging of their products will be completely recyclable and home compostable. They will be using QR code technology to reduce the usage of paper (Giribabu, 2019). The organization is planning to reduce the carbon footprint by necessarily 1.5 C pathway through the manufacturization of their products like the Nano Puff® jacket. The organization is continuously contributing to solving the net-zero emission of carbon footprint.

The Triple Bottom Line theory is considered a business conceptual framework that makes the organization think and act according to the social and environmental aspects not solely dependent on earning the profits and making business goals. The main three parts of TBL theory stand on 3Ps such as People, Profit, and Planet (Lopez-Cabrales & Valle-Cabrera, 2020).

In the capitalist economic situation, an organization’s victory in the operational field highly depends on the financial performance and score of the organization and also means how it generates the profits from its stakeholders. Strategic business planning and the main business decisions are usually articulated to increase the profits of the organization while reducing the costs and omitting the risk for the organization. But in recent years, the purpose-driven leaders have changed the definitions and taken several initiatives to contribute toward social and environmental development without creating any hindrance to the financial goals of the organization.

Regenerative organic certified materials for superior quality

The second most important element of the TBL theory stands to highlight the societal aspects of the organizations and how they create value for the people and show commitment toward them. It is the prime responsibility of the organization to make a distinction between the stakeholders and shareholders of the organization (Jakhar et al., 2020). Standing in the modern organizational value, the organizations are focusing on creating values for the stakeholders to embrace sustainability by impacting the values of the employees, customers, and the community (Pereira & Martins, 2021). In the earlier days, most organizations used to give value to the shareholders who own the company's share, and currently, companies are focusing on the stakeholders to create sustainable value for the organization. For example, most organizations are applying innovative strategic partnerships with non-profit organizations that are focused on common purpose-driven objectives (Jung & La, 2020).

The final and last component of the triple bottom line theory is the Planet. Since the effect of the industrial revolution, the giant organization is mostly contributing to preventing the pollution effect on the environment that can be considered the key driver of the climate change. Several reports are evidence that there are numerous organizations in the energy sector are creating 71% of the industrial emissions in the environment (Lock & Araujo, 2020). Since there is a history of contributing toward the climate change through the organization, they are also having the responsibility to hold the keys to making the positive change in the environment. Most organizations are recognizing their responsibility towards the environmental aspects.

After analyzing the Triple Bottom Line theory, Patagonia is considered the perfect organization that does care about the environmental aspects, an outdoor clothing brand. The designs of the brand can be used in any climate conditions starting from fleece jackets to quick-drying shorts that are made from organic cotton, polyester, and other materials. In the current market scenario, the organization, Patagonia is having 199 stores across the globe and it makes products for climbing, surfing, and skiing the organization is creating a benchmark for the eco-friendly brand (Rakib, Chang & Jai, 2020). According to the news of the officials of Patagonia, their Dublin stores support grantees to Ireland, VOICE Ireland community, and Crann and Trees for Ireland community.

Patagonia is also having focused on its supply chain management through human effects and its prime objective is to create awareness in the society through its eco-friendly products and also make engagement with the environment. They tend to focus and spend time on analyzing the inputs of their products to satisfy the needs of the customers and they also try to initiate innovative products that make the procedures that have a low impact on the environmental aspects. The business model of Patagonia is mainly dependent on consumerism and they tend to apply unconventional marketing strategies to commit to the needs of the environmental aspects (Liute & De Giacomo, 2022). They are trying to align their selling strategy with the Triple Bottom Line Framework which is an essential marketing conceptual study that determines the company’s social, economic, and environmental impact.

Sustainability program milestones

Patagonia is a genuine sustainable brand that takes care of the elements of Triple Bottom Line Theory such as People and Planet though they are focusing on making profits and earning money at the same time (Masud et al., 2019). This brand has a clear mission for accomplishing values for its stakeholders for making the brand successful in the industry. Patagonia is the name of the organization that combines the cultural and sustainable approach and makes the stakeholders align with the company's mission.

Patagonia’s business model is based on the value of producing and marketing high and supreme quality clothing products and channelize them through distributors and also the direct to consumers (Kaplan & McMillan, 2020). The business model of Patagonia also focuses on creating environmental, social, and economic value through its business operation and its products. The brand identity of Patagonia is dependent on the impact and environmentalism. Patagonia has traditionally used the TBL theory long back as an ethical concept to grow and run the operations of the business.

An ethical dilemma is considered as the problem where the employees of the organization choose between the moral and immoral acts and in the organizational context, the employees have to deal with several pressure to perform to achieve the organizational goals and also deal with several personal temptations to perform the task as well (Eilert & Nappier Cherup, 2020). There is no ethical dilemma in the case of Patagonia as their prime focus is to deal with achieving sustainable values for the organization.

Source: Embapro

The value chain analysis of Patagonia is considered one largest value chain systems in the industry that comprises the organization's upstream such as the suppliers or downstream such as distribution channels (Fonseca et al., 2019). As per the value chain model, there are two types of categories in the generic value chain model and the two activities are primary activities and supporting activities.

As per the value chain model of Patagonia mentioned above, there are five generic categories of primary activities that are discussed below:

The inbound logistics of Patagonia intend to take initiative are assimilated with receiving, storing, and proclamations in the inputs of the product category of the organization. It is comprised of the warehouse management of the physical products, handling of the raw materials, and also procuring architecture, and storing the information for digital media. In the current business scenario, Patagonia is now outsourcing most of its inbound logistics activities (Georgantzas, 2018).

Primarily, it is important for Patagonia is that they are having the most transparent supply chain and the organization has a clear distinction to outsource its raw materials. The organization always focuses on sourcing raw materials which are eco-friendly and also focuses on the producers paying fair wages (Bachmann-Vargas, 2021). Quality is the main criterion for the organization's sourcing procedure. For an instance, when Patagonia found out that one of their raw materials causes skin irritation, they immediately changed the sourcing materials and start dealing with organic cotton materials in 1994.

Triple Bottom Line theory

Operation is considered a major tool of value chain service; this is the activity through which the organization transforms the raw materials into finished products and then channelizes the products to reach their buyers. The operations of the organization primarily comprise of processing of the raw materials, the fabrication of different types of materials, and producing the final products as per the choice of the customers (Paras & Curteza, 2018). Here the organization uses the customer data to deliver the advertisements based on the client’s requirements. It is important to mention that Patagonia's Ventura facilities primarily use photovoltaic panels whereas the California facilities of Patagonia usually use wind-driven power and through this approach, they have successfully changed the energy usage by 25% (Oliva et al., 2021). They have remodeled their manufacturing process by stopping using the orange color in their production as the toxic level in the color is high and they are trying to take different measures to use different chemicals on different materials.

This activity in the supply chain management is one of the activities through which the organization tries to channel their finished goods to reach their customer segment. Patagonia mostly uses channel partners and distributors to reach out to its customers (Hara et al., 2022). The activities that comprise the organization's outbound logistics are primarily wholesalers, distributors, retailers, processing, and maintaining the distribution network, orders fulfillment, product warehouse management, scheduling of the products. With the processing of sustainable procurement of the production, Patagonia sticks to the vision statement of dealing with the best quality and causing no unnecessary harm (Elalem, Bicer & Seifert, 2021).

These activities of the organization in the value chain help to create a way out through which customers can avail of the firm's products. These activities of the organization value chain comprise marketing, selection of the channel, advertising and promotion, pricing strategy and the management of salesforce, and many other activities. Patagonia is considered one first organization of clothing brands in America that produced the catalog in recycled materials. This marketing initiative of Patagonia had saved 3.5 million kilowatt-hours of electricity and 6 million gallons of water (Fonseca et al., 2019). Patagonia had launched the ‘Footprint Chronicle’ campaign permitting the customers to count the carbon footprint on each product available on the website. This campaign of the organization proved one of the best initiatives and customers get to know the result of using the products and also give promotional value to the organization’s other products.

Patagonia needs to ensure their potential customers about their post-sell service the maintenance of their products and their usage of it. In the value chain model of Patagonia, the post-sell service comprises backend support, part supply, and look for easy maintenance of their products. Patagonia can be considered as one of the lead organizations in the industry that creates sustainable operations that later many rivals’ organization has tried to catch up but Patagonia gives a more edge on the competitive market by providing a new program named Common Threads Initiative (Qi, 2022). This initiative of Patagonia stands on 4Rs such as Reduce, Recycle, Repair, Reuse. After the launch of this new initiative, Patagonia had promised to fix items for free or at a cheap cost, as well as promoting buyers to shop less, recycle, and reuse their purchases (Thomsen, 2021). Despite the evident ineffectiveness, this effort exceeded expectations in respect of both environmental and financial benefits.

Creating value for stakeholders

Porter classified Support Activities into four prime categories, which are condensed into a variety of individual value activities that are unique to the sector in which Patagonia works. The four types of generic support activities are as follows:

Patagonia tends to follow the organizational structure that provides leverage to its employees to think for innovation and excellence. Patagonia built a system that allows professionals to establish a positive work-life balance and treat their colleagues with admiration and respect as a company created by associates of founder Yvon Chouinard (Bandieri & Almaraz, 2020). The founder of Patagonia, Chouinard, did not follow the strict corporate rules and worked only to solve the business purpose while the competitors of Patagonia enforced the strict regulation which create hindrance in the way of creativity and increased the productivity rate for some times. Patagonia's contemporary management structure is vertically integrated, with authority disseminated throughout the company as workers are taught to acknowledge their independence and interconnectedness. The firm's structure the organization tends to support its entire value chain after being a diversified organization. Patagonia's financial and management are handled at the corporate level, while quality assurance, auditing, and lawsuits are handled at the business unit level.

The unique business model of Patagonia has integrated the human resource management view directed by the customized recruitment process of the organization. The HR department of the organization tends to recruit people from the existing pool of employees rather than external hiring. The primary value of the HR department of the organization is maintaining transparency, a collaborative approach, and improvement. The HR department of the organization always promotes the creativity factor and also encourages diversity and openness of new ideas in the organization (Ryan, 2021). Patagonia made an extensive investment in their training program to make the employees align with the organizational goals and objectives and boost the performance of the organization. The organization is famous for the HR slogan that they used to follow in the organizational setting is 'Let my People go Surfing Flex-time Policy' which depicts the flexibility in the working schedule. The organization also provides certain benefits to its employees and gives health insurance coverage and also maternity leaves and many more.

Patagonia always promotes technological advancement and innovation in its production and always tries to promote value for the organization. Patagonia can be considered as one of the outdoor clothing brands that used Primaloft’s P.U.R.E (Produced Using Reduced Emissions) in their production and manufacturing units for launching their new product in the market named as Nano Puff jacket. P.U.R.E technology from Primaloft uses compressed air rather than heat to solidify padding during the thermal joining process, decreasing CO2 emissions by nearly half (Jenkins, 2018). Patagonia has formed another exclusive research collaboration with HeiQ, a Swiss textile technology innovator, to investigate innovative solutions for a sustainable textile manufacturing technology to provide breathability and enduring water resistance (DWR) with the greatest performance. Patagonia has been playing a leading role in producing advanced products to maintain a more viable future for the planet for generations. Minimizing the growth of harmful chemistries is a crucial element of Patagonia's materials approach to innovation.

Contribution towards environmental aspects

Preferable purchasing method of Patagonia strictly denotes the purchase of goods and raw materials that have a lesser impact on environmental aspects and also deduct the negative impact on the human health rather than it increases the positive attributes on the society while comparing with other products and services. Energy- and water-efficient products, renewable energy products and services, organic items, non-toxic and non-hazardous equipment, recyclable materials, programs that support diversification, locally produced products & services, and agreements with suppliers who enforce sustainable social and environmental methods are all supported by such procurement (Santos Valero & Martínez, 2019). These guidelines should be followed when making purchases that aren't part of the core supply chain or four main business procedures. Papers for workplace usage, household cleaners, food service for company occasions, marketing and packaging, and any external vendor transactions are examples of usefulness.

The resource-based view is considered one of the managerial frameworks that portray the strategic resources of the organization that the organization tries to exploit to gain a competitive advantage in the market (Chillo et al., 2020). The resource-based view is divided into two main parts of resources that are tangible and intangible. Here the chosen organization Patagonia has also resources that can be categorized under these two parts.

Source: (Chillo et al., 2020)

The tangible resources of Patagonia can be further divided into several parts such as the land, equipment, the raw materials, the supplies, facilities, and lastly the organizational infrastructure. Facilities for Patagonia stands for the office building, the production units, warehouses and the supporting building comes under the facilities (Bachmann-Vargas, van Koppen & Lamers, 2022). The tangible factor of infrastructure can also be considered as the one of the most important factors of the organization as it has direct impact over the employee productivity and make ease of operations for the organization. And the intangible resources of the organization are the brand image, brand reputation, good will, trade name, and lastly customer experience.

Resources	Value	Rare	Imitation	Non-sustainable Organization	Competitive Advantage
Brand Value	Yes	Yes	No	Yes	Sustainable Competitive Advantage
Positioning of the Brand in Comparison to the Competition	Yes	No	Can be imitated by competitors	Yes	Temporary Competitive Advantage
Customer Community	Yes	Yes	Difficult to imitate the culture	Yes	Providing Strong Competitive Advantage
Successful Implementation of Technological Strategy	Yes	No	Can be imitated by competitors	Leading Industry player	It will provide sustainable competitive advantage
Global and Local Presence	Yes	Yes	Can be imitated by competitors	Yes, Most diversified organization	Providing Strong Competitive Advantage
Relationship with suppliers	Yes	No	Can be imitated by competitors	Yes	Providing Strong Competitive Advantage
Propensity for innovation	Yes	No	No	Yes	Sustainable Competitive Advantage

The table of VRIN analysis of Patagonia that has been presented as per the resource identified from the value chain of the organization represents them to show the competitive advantages in the market.

Patagonia Inc. can develop a non-substitutable expertise by engaging in CSR activities and implementing CSR plans that are connected with the larger company objectives and established purposefully. Patagonia has a defined and purposeful corporate social responsibility function and always promotes social responsibility activities, and makes them transparent in operations of the organization (Wagner, 2020).

The positioning of the brand is one of the key factors and the it is positioned in the mind of the customers as the most recognizable and cheaper yet sustainable brand in the textile industry that can be imitated by the competitors. Thus, this factor creates temporary competitive advantage in the market.

The organization has created a faith and trust with its sustainable product quality and they developed a kind of relationship with its customer that will be tough to imitate. As per the data provided and the long discussion on the value chain analysis of Patagonia has been proved that they have created this place among its customer through creating sustainable value for its stakeholders (customers, employees and community) that provide strong competitive advantage in the market.

199 stores globally

The value chain analysis of the organization, Patagonia has adopted several new technologies to provide their customers with high quality products, they have used Primaloft’s P.U.R.E (Produced Using Reduced Emissions) in their production and manufacturing units for launching their new product in the market named as Nano Puff jacket which is rare in the competitors. This process was adopted by Patagonia first and it is tough to imitate and thus provide sustainable competitive advantage.

It is one of the lead factors that give the organization competitive advantage not only in the national but also in the global market. As it is evident from above discussion that they are having stores in above 100 countries and it gives them large customer base and also the diversified organizational structure gives the organization that place that can not be imitate by its competitors. Thus, it is giving strong competitive advantage for the organization.

The corporation has also been effective in delivering things and making them incredibly accessible to countries without operating units. The industry's dealings with distributors and retailers are very stringent, and they are based on a set of norms and criteria that are closely adhered to.

This is a critical resource for Patagonia, as it allows the company to pursue more prospects in other locations and countries throughout the world.

The company's creativity also spreads to other disciplines, such as promotion. The invention aids the work operations in becoming more competitive. As a result, the organization's operational costs are much lower and economies of scale are obtained. Thus, it can be stated from the above-mentioned table chart on VRIN analysis that the company's propensity for creativity has proven to be a significant resource in managing environmental issues and maximizing on opportunities in the environment.

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