Blog 4- Business Model Analysis Report

For my business model analysis I’m choosing to focus on Patagonia. Not only do I love and respect the products Patagonia makes, I admire the company’s dedication to sustainability, corporate responsibility, and all around trying to be a good citizen of the world. Patagonia is an athletic apparel and gear manufacturer and retailer. Their product selection includes general and sport specific clothing and accessories for men, women and children. Beyond clothing they also produce a variety of backpacks, bags, waterbottles, books and posters. Their products are positioned as high-sport, high-quality, high-cost, and low-negative-impact for the environment and social welfare. 

The morality of Patagonia is the main reason why the company interests me. Today, countless companies throw around “corporate social responsibility” as a tool to create a better social image in the minds of consumers and organizations. For Patagonia corporate social responsibility isn’t simply a public relations ploy or a charity check written at the end of each year, it’s their way of life. Sustainability and social responsibility are integral forces behind the entire product journey: from product design and raw material purchase to manufacturing, even down to the reselling or recycling of old apparel and gear. 

Beyond the morality of Patagonia's manufacturing processes, they participate in numerous activities and organizations that strive to better businesses, people and the enviornment. For example, Patagonia cofounded 1% for the Planet, an organiztion where member companies pledge to donate at least 1% of total sales to environmental causes each year. Another amazing example is The Footprint Chronicles, which informs customers on Patagonia's supply chain, including the specific textile mills and factories the company uses.

If the ethical and environmental reasons alone don’t sway you, Patagonia also offers adventure. Patagonia is an excitement, to work for or to be a customer to. Patagonia as a company and brand is about enjoying and experiencing the most the world has to offer us. To take full advantage of the world is a more beautiful value proposition than most companies can wish to offer.

Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. –Patagonia Mission Statement

For the purpose of exploring the Patagonia business model I am going to focus on three primary customer segments I find the most interesting. Without further ado:

The True Adventurers

True adventurers are the customers the Patagonia products and gear are engineered to serve. These are the customers who need the $600 wetsuit designed for frigid waters. True adventures are the customers who actually use the pretty backpacks for hiking across the roughest terrain. These customers will test the quality of the products to their limits. This customer segment is both women and men, aged 20 to 60.

The value propositions for the true adventurers stems from the quality, durability and safety of the products themselves. The product needs to perform to as high of a standard as these athletes hold themselves to. These customers also value the sustainability of the products and the companies’ activities. They respect the intrinsic value the environment and are committed to protecting it.

The Outdoor Enthusiasts

While these consumers may not be hiking to the peak of Mt. Kilimanjaro, they certainly get their fair share of outdoor activities. The outdoor enthusiasts include families who go camping, friends who plan a trip down the Comal River and the guy who gets an hour of surfing in before heading to the office each morning. This customer segment may not be addicted to the same adrenaline rush as the true adventurers, yet they love and yearn for the great outdoors. Any chance they get for an afternoon hike or weekend fishing trip, they’ll take. The outdoor enthusiasts include men, women and any of their children who may be dragged along for the outdoor adventure. All ages that have a longing for the outdoors are welcome. The value this customer segment gains from Patagonia’s offerings is the usefulness, convenience and quality of its products. Quality is still important to the outdoor enthusiast as it is to the true adventurers, these customers will be outside using the apparel and gear as it was intended; however, they won’t be testing the absolute limits of the products. For the outdoor enthusiasts the product needs to work and be convenient to use and purchase. 

 
The Sporty Wannabes
 
The final customer segment to be explored is the sporty wannabes. They may like the outdoors, they may even have played on an intramural softball team that one time in college, but they by no means require the advanced Patagonia apparel and gear for their everyday interests. In fact they’ll most likely be sticking to the trendy pullovers and colorful backpacks. This customer segment comprises mainly of young adults and teenagers (ages 13-35), who love how they look and feel in Patagonia products. The value proposition offered to this customer segment is sportiness, attractiveness and status. Patagonia ain’t cheap, and your classmates and colleagues know that. They value the Patagonia brand because they know it, like it, respect it and know that their friends do too.