Patagonia. Most fantastic business in the world
Why Patagonia brand and business case is so powerful and attractive? Yvon Chouinard, a founder of Patagonia, made a brand that every entrepreneur admires. It was a small business, family business that grew to best eco brand in the world. Patagonia atom slims, Patagonia baggies attract customers from all over the world. Let's study their business case today.
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Today I want to tell you about Patagonia. Its is an American clothing company with a turnover of about 1bln dollars that markets and sells outdoor clothing (Patagonia slings, Patagonia nano puff jacket, Patagonia fleece, and other products) I visited this company a few weeks ago and we met with founders of the company and learned their success story.
Found in 1973 as a small producer of outdoor sports fits, Patagonia runs 1$ billion annual revenue now. The company was founded by Yvon Chouinard and is based in Ventura, California. It’s a very popular company and you can see many people buying their clothing (Jeff Bezos, Mark Zuckerberg, Larry Page, and Sergey brin).
Their future growth strategy impresses with ambitious goals to target more customers with revolutionary new clothes. What’s the secret of its success of Patagonia clothing and its success story?
My claim at the beginning of the direct dependence of Patagonia’s profits from its sustainability mission is not a joke. When Patagonia launched the Sustainable Apparel Coalition initiative in 2010, its sales quadrupled for the next 6 years. It witnessed steady growth before but never experienced such boosts. What does sustainability mean for Patagonia? Can its approach be adopted by other companies? I have researched and analyzed its core principles and set a unique Patagonia’s formula for success.
Here is how it looks like. Three key ingredients of Patagonia’s success recipe are Brand Activism, Conscious Capitalism, and Supply Chain Transparency. All three are growing trends of today and tomorrow, but Patagonia’s 30-year long strategy approach helped it to forecast these trends at the beginning of the twenty-first century and set it up in leading position now.
Patagonia Brand activism. “You can’t be a values-driven company and disregard society” – that is how this term is defined. Patagonia encourages customers to buy high-quality clothing, use it, and then return to the company. “Worn Wear” brand of Patagonia targets those customers, who care about sustainability. Saving human and natural resources on manufacturing fewer clothes and reselling used ones, its customers become active participants of the environment-friendly movement. The result? “Worn Wear” brand is not the main trend of the company, but it sold $1 million worth of used clothes for just the first 6 months.
Conscious Capitalism. Patagonia’s case proves it works ingeniously to grow profits. What does conscious capitalism mean to Patagonia? To approach its business consciously, thinking of the long-term consequences of its operations. Operating globally, Patagonia strategizes its activities to minimize their future negative impact on Earth.
Patagonia Action Works: the platform to unite the company’s grantees and customers to improve the environment. You can find a lot of activities to participate in different states if you want to save the Earth together with Patagonia.
Patagonia Provisions: production and selling of eco-friendly, organic food. Like Worn Wear, it’s not the company’s mainstream, still it brings $ 5,6 million revenue to the company annually.
With the growing trend to buy products with value and purpose, Patagonia attracts around 24,000 new customers annually, who buy its products in order to act within a team of the company’s grantees.
Sustainable Apparel Coalition: as I already said, the launch of this project boosted the company’s most rapid growth. In 2010 they united 10 large (such as Walmart) US corporations, who concerned about the planet’s future and their impact on it. They adopted a standard index to drive “saving planet” innovations in the apparel value chain.
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