Attached.

FINAL STRATEGIC PLAN
FOR PATAGONIA INC
Name
Instructor
Institutional Affiliation
Date

Executive Summary


Strategic evaluation and innovation are critical for a company that is intending to gain a
competitive advantage within the business environment.



Develop strategic plan encompassing the strategic objectives, goals, mission and vision
statement that are align fully with the company’s general purpose within the business
environment.



The strategic plan for the company will enable the organizational managers and leaders
to implement strategic objectives of the company.



Through environmental scan and internal-external environmental analysis, the company
will be able to realize its strategic weakness and develop strategic recommendations
that can enable effective implementation of the company’s proposed change
management strategies.

Company Background



Patagonia Inc. is an American clothing company founded in 1973



The company sells a variety of outdoor clothing, and it is based in Ventura, California
(Hovers, 2017).



It develops and sells rugged clothing and other accessories to skiers, mountain climbers,
surfers as well as other sporting enthusiasts.



It also deals with products from sister companies Lotus Designs that sells paddling gear
and Water Girl that deals with women’s sportswear among other products.

Patagonia Inc. Vision/Mission
Statement


Build the best product, cause no unnecessary harm, use business to inspire and
implement solutions to the environmental crisis (Hovers, 2017).

Patagonia Inc. Innovation strategy



The company has a twofold focus on quality and environment that has propelled the
overall business innovation.



Involvement in recycling to save the environment and make use of the limited raw
materials.



The company uses only organic cotton as a way to minimize the level of environmental
pollution that is caused by intensive chemical cotton and the production of other raw
materials.



People strategy centers on people within and outside the organization; these people
are critical to the success of the organization.



Motivation strategies ensure the company retains the best talents that propel the overall
business innovation

Components of strategic
management process


Strategic management is the process or method through which organizational managers and
leaders implement strategic objectives of the



The strategic management process outlines the various steps that organizational managers
must follow in creating and implementing a viable strategy.



Strategic model adopted by an organization depends on the general organizational
objectives and goals



The following are the major components of strategic management process.
▪

Strategic analysis

▪

Strategy formulation

▪

Strategic implementation

▪

Strategy monitoring

How the strategic management
components work together to create
value for the company


The strategic management components stems out from each other.



The company identifies its mission and vision.



This is done through conducting a situational analysis.



The strategy formulation borrows an idea from analysis since through situational analysis
the company comes up with mission and vision which are then formulated into the
strategy.



The succeeding stage of policy implementation also depends on the formulation
component



The entire components of strategic management process depend on each other for an
organization to achieve competitive advantage

Environmental Scan



Patagonia Inc. has addressed the country's requirement for outdoor clothing and
changed the market for outdoor attire and adornments through their imaginative and
innovative designs.



Through its online platforms and retailers, the organization can connect with a large
group of outdoor sportsmen and ladies regardless of their age or their preference.



The firm separated itself from other significant rivals in the business by focusing on clients
who were educated about their sports and outdoor exercises and were ready to pay an
extra sum for unique quality

Patagonia external environment



Understanding the needs and inclinations of the target market, which in this situation is
the outdoor sports lovers, is basic to giving something that will have a high demand



Patagonia considers the size, share of the market, branding technique, quality, and
working system of every one of its rivals to ensure that it remains competitive.



Environmental position of Patagonia has contributed to its upper hand in the market by
differentiating it from other rivals



The organization empowered its suppliers to make a value for different players along the
value chain as this selectivity eventually brought down defects for its products.

Patagonia’s general environment



The financial market for outdoor sporting products has been relentlessly developing for
quite a while and achieved a 20 percent growth in 2007



Patagonia appreciates a huge market share in the United States, and this does not
enable other contenders to take the full advantage of global development



Fans of outdoor games are unquestionably Patagonia's main clients since it is an apparel
producing business for outdoor exercises.



The high caliber of the attire implies that they will last through a great deal of
mishandling from the elements, and purchasers would be pleased to flaunt the alluring
style of the clothing.



Patagonia has collaborated with different enterprises to create activities aimed at
lessening the environmental footprint organizations leave behind.

The organization's industry operating
environment


Household brands in this industry have strong brand recognition alongside high-net
revenues creating an economy of scales advantage over organizations endeavoring to
move into this market.



The competition is exceptionally high in the outdoor attire industry



Purchasers in this market additionally have an extreme measure of control over
organizations.



The organization may likewise need to consider making a product offering that interests
to new trends in modern outdoor clothing.



Items in this industry don't change extraordinarily depending on brand, and there are
many groups to select from as a shopper

Internal Environmental Analysis


Patagonia Company increased its sales from 20 to 100 million in the year 1972 to 1980s



During this period the company expanded internationally and by the year 2000, the sales
were 200 million



The company seeks to expand its sales by 2015 and continuously expand it.



Internal analysis comprises the company’s resources, competencies, capabilities, value
chain, and VRIO (valuable, rare, imitation costs and organized to attain value) analysis.

Resources



The company applies environmentally sustainable ways to make the use of resources
better and useful, no wastage or misuse.



Better use of resources appeals more to consumers hence increased income.



The company uses organic and conventional cotton and dyes and fabrics that are less
destructive and that are non-toxic.



Soda pop bottles are recycled to develop fleece;



Patagonia is the only company that utilizes this type of resource.



With great resources, the company maintains a good position within the industry.

Capabilities



The other internal factor is the company’s capabilities; the company focuses on simplicity
as the major goal and attracts core-users.



Further, the management leads the rest of the employees to try new things away from
the common rules of the business.



company is able to consume very little but the best and utilizes its money well despite
being a private company.

Competencies



The company has key competencies and initiative to support the government and
federal law, defend own actions, correct where they go wrong, lead an analyzed life
and lastly influence other organizations.



The company further ensures to balance between its environmental commitment and
business activities.

VRIO Analysis



With the VRIO analysis of the company, the company product is valuable to many
customers due to its features of protecting the environment



The company is also rare in its applicability of recycled resources and sustainability.



Recycling costs more than $60000 hence the company puts in 3 million dollars yearly for
investments



The company enjoys an exemplary value chain from raw materials to commodities, then
marketing and sales and finally customer service.

Strengths and weaknesses of
Patagonia Company




Strengths
a)

High-quality products

b)

Low employee turnover

c)

Environmental reputation

Weaknesses
a)

Fewer customer incentives

b)

Price

c)

Less fashionable apparel

d)

Company Resources (Opportunities)

External analysis of Apparel Industry
(Porters Five forces Analysis)


Entry barriers



Bargaining power of suppliers



Bargaining power of buyers



Substitute product



Rivalry among competitors

External analysis in relation to internal
analysis


Patagonia has a monopolistic competition; the main competitor is North Face Company
based in San Francisco which products almost look the same with both major products
being winter athletic wear. Both companies advocate for environmental protection.



In the year 2013, North Face annual revenue was $2 billion dollars whereas Patagonia
$2.57 billion dollars still has a competitive advantage



The company poses great competition to Patagonia, the company revenue is lower at
$100 million dollars per year. Marmot designs its products which are unique and very
competitive in the market.

Organization Structure and influence
on performance


At the highest point, there is the Chief Executive Officer who is Rose Marcario.



In the first part there is the department of development, human resource, legal, market
operations, finance, control and treasury and HR shared services



Under the department of marketing operations, we have, e-commerce, category
marketing, marketing technical outdoor and recruiting.



Under finance, control and treasury are financial planning and analysis and finance
sportswear.



Each department has its own leaders and personnel entitled to the duties within that
section

Competitive Advantage



The company uses differentiation strategy and focuses on particular segmented
customers willing to pay premium prices.



The higher quality products add value to customers.



The company earns good revenue yearly and by the use of raw materials that promote
the environment, the production costs are low.

Strategic Evaluation and
Recommendation


Business level strategies
a)

Cost Leadership (CL)

b)

Differentiation

c)

Market focus

d)

Integrated Low-Cost/Differentiation Strategy

Corporate level strategies



The corporate level strategy outlines actions the company can take to gain a
competitive advantage by choosing and managing a range of various companies
competing for the same market share.
a)

Product diversification

b)

Low levels

c)

Moderate to high levels

d)

Very high levels: unrelated

Global strategies for the organization



Global strategies refer to the actions a company develops to enable it to achieve its goals
of international expansion.
1.

Multidomestic strategy

2.

Transnational strategy

Recommendation



The company should implement both corporate and business level strategies. As stated
earlier, the company operates in a very competitive market where the market is
saturated with competitors.



To achieve its set objectives as well as gain a competitive advantage, the company
should implement corporate as well as business strategy.



The latter will enable the company to segment its market and provide quality and unique
products to the consumers.



The former on the other hand will enable the company to diversify its products as
opposed to being limited to only a few products line.

Implementation Plan, Strategic
Controls, and Contingency Plan
Analysis


Patagonia Inc., a Ventura, California-based clothing company which focuses mainly on
high-end outdoor clothing, needs new advancement strategies, income sources, and
product innovation



The course of action which is most fitting for the company are alongside its objectives,
functional tactics, action points, milestones and deadlines, tasks and task ownership, and
budget plans and allocations.



Implementation of such a strategic plan is critical for any company to achieve its
strategic objectives and goals

Strategy and Implementation



Patagonia focuses on the environmentally informed buyers since they utilize natural
cotton and recyclable fibers.



The company “also uses innovative teams to create value and satisfy wants for their
customers.”



The structure of these creative teams is “functional, meaning that each department
focuses on an assigned area or task and then ultimately, all agencies work together to
address major concerns



Patagonia ought to set up its staff of more than 1,000 specialists to help give customers
throughout the world services and items that are cleaner, more environmentally friendly,
more creative, more proficient and available to as many people as could sensibly be
possible

Objectives



Patagonia,“as a leading designer, distributor, and retailer of high quality, technical
outdoor clothing and gear”, part of the company’s goals is to build high-quality sports
equipment “to the specifications of the most demanding customers and environments”
(Grant, 2016).



At the same time, Patagonia also aims to limit the effect of its items on the environment,
and it needs to endeavor as an organization to make positive contributions to nature.



The company intends to conduct itself in an unconventional manner, by being
straightforward...