Pategonia’s Expansion Strategy Essay

1. Patagonia’s Current Strategy: Key Processes and Customer Perception In the context of our business model our number one key process is our Rules and Norms (a complete breakdown of Patagonia’s current business model and a to-be-proposed business model are available for review in Exhibit I). This ethos that started with the founding of Chouinard Equipment continued through the creation of Lost Arrow and indeed Patagonia. Our self-proclaimed â€Å"dirtbag† culture has resulted in some unorthodox business practices over the years. We pride ourselves on our efforts to reduce the social and environmental impact of the lifetime of the goods and services we produce. This is something that our competitors recognize but do not focus efforts on; for us it is of the utmost importance. I took this liberty to draft a Customer Value Proposition (CVP) for our current model: â€Å"We provide high quality, durable outdoor athletic clothing and accessories that are produced with a high standard for environmental and social impact. We make the products that we want to use.† To extrapolate on the latter portion of our CVP, we expect our employees to not only share in the environmental and social consciousness that Mr Chouinard has weaved into the culture of Patagonia but we expect employees to be users of our products as well. This gives us an incredible insight into the functionality and durability of our products. This is exemplified in our generous sabbaticals and midday surfing breaks at our corporate headquarters. Additional insight in this regard is provided by our investment in brand ambassadors, who also provide us with the core of our visual marketing in our catalogs, our website, and social media. In order of volume we move our products through three main channels: wholesale, retail, catalog/internet. In order of profitability the channels are arranged as such retail, catalog/internet[1], and wholesale. There is an additional product repair arm of Patagonia’s structure that at the moment is not profitable. Our commitment to the ethical fiber that binds the core of what Patagonia as a brand stands for results in a product that comes at a premium price, however we believe that the money you spend on Patagonia products is a contribution to our commitment for care when it comes to the environments and social spheres within which we operate. So far we have seen success as shown below. 2. Financial Review of Current Business Model The competition analysis in Exhibit III outlines our industries averages for financial health. It would seem that our â€Å"dirtbag† approach to business has boded well for us over the last ten years. While our total market share (annual sales) is far below the industry average over all the company is making money. Our gross profit margin is over 6% higher than the industry average and our pre-tax profit margin is right in line with the industry average. While Patagonia’s ROE and ROA are below the industry average it is not my much and our debt to equity ratio is far below the industry average. So while we holds more equity and assets on hand than our competitors we has enough liquid cash flow to finance operations without having to incur much debt. Our 12 month revenue growth is trending along with the industry however our 12 month net growth income is nearly 13% higher than our competitors. Thus while we are experiencing growth that is on par with the industry we are experiencing a downward turn in our operating and/or material costs. It should be noted that the information here is of companies who compete in our industry but not exclusively. Columbia is the competitor that competes most directly with our niche in the industry and on every account except for debt/equity our numbers are favorable and even in the case of debt/equity the difference is negligible. The standards for philanthropy and an ethical purview for production and material sourcing at Patagonia are much higher than the industry average. We donate 1% of gross sales to environmental initiatives and causes, and our COGS are higher than competitors as a result of our ethical stance. However, once again (as shown in Lost Arrow: Financials, Exhibit III) we have been operating in the black for the last decade. This may also be explained by our company ethic. We focus on a curbing of consumption and that focus has limited how much we are willing to spend on advertizing. Conversely our competition holds advertisement as a high priority when establishing sales and brand. This observation is not trivial and could more than account for the balance between our costs and those of our competitors. 3. Moving Forward As discussed the current model for Patagonia works. You can be a â€Å"dirtbag† and make make money. The question is how do we continue on with the goal of 10% growth per year for the next five years? Whatever we choose we must operate within that moral fiber that helped us to achieve who we are today. Following are two suggestions for how to move forward, one uses our current business model, the other proposes a change. Please reference Exhibit I for business model analysis and Exhibit II for strategy. Strategy: Current Business Model Tactic One: A Focus on Retail – Our best margins are derived from retail sales however this accounts for just one third of our sales volume. The best type of marketing asset we have are our retail employees. Our Dirtbag Ambassadors are out there skiing, snowboarding, climbing, camping, bouldering, and living the life that Patagonia wants to be an integral part of. We must expand our retail channel and focus on those areas where dirtbags convene. A quick review of the 26 stores in the United States can be found in Exhibit V. Portland, Seattle, St. Paul, Chicago, Atlanta, DC. Sure dirtbags live in cities but where are our stores in Telluride, Tahoe, Bend, Cheyenne, or Buffalo? An expansion of our retail stream increases profitability as well as the reach of our marketing, the Patagonia way. These are the places our competitors don’t wants stores for lack of traffic, but our stores are more than commerce they are community centers for dirtbags. Tactic Two: Research and Development – Our industry ethic has produced one of the best research and development laboratories in the industry. We can leverage this in two ways. First and foremost we must fund research to produce material with the ethical and physical integrity that also helps lower our gross margins. We have pioneered ethical durable material in the industry, now we must find a way to do so cheaper. Doing so would open up the market for those dirtbags who dont have as much money and would normally go to a competitor based on price point. Second we hold patents for these materials we could offer to sell material to other outdoor companies, or begin a joint venture. In either of these cases we must make sure that the material we produced is being utilized in an end product that is up to the standards of Patagonia. Strategy Two: A New Business Model There comes a time in a business’ life when you have to ask: While what we are doing has worked, how long will it work? To achieve the goal of 10% growth per year we may have to think outside of our wheelhouse and think about how committed we are to our ethical and social standards. As long as we continue to produce more clothing people will buy it. As it stands our customer base has expendable income. How can we convince them to only buy what we need? Through an expansion of our clothing repair services and clothing swap market. A case is made for the business model change in Exhibit I. Tactic One: Expansion of Repair and Retail – It is not our goal to abandon what has made Patagonia the company it is today, thus once again we will need to expand retail stores however we do so in a way that will facilitate clothing repair. Each store should have a mending workshop staffed and equipped to repair what comes their way. To really take advantage of this service we must willing to mend non-Patagonia clothing. This will do two things: it will reduce the overall number of unnecessary purchases in our market and it will introduce people to the Patagonia lifestyle through our retail store. These store can also facilitate a recycling program for those articles of gear that are beyond repair. Something as simple as an in store credit can get people who would otherwise go to Nike experience Patagonia C&A. Additionally the expanded retail presence will be an opportunity to create a network for clothing swaps Tactic Two: Expansion of Internal Repair – Expand the repair infrastructure behind retail presence. That is to say, as opposed to expanding retail and having repair work centers in-store, invest in larger repair facilities that stores can send garments to. In our current business model we are reaching critical mass with regard to how much clothing repair we can handle. If we strategically place lager facilities near our exiting stores we can handle this work load our selves. This also ensures that the materials and process of clothing repair is within the ethical conduct of our company without having to do audits of our outsourced partners. The clothing repair infrastructure for our market is basically nonexistent at this point and with research and development focused on this new business model we can create and dominate this market. This will once again involve repairing more than just Patagonia products but in the end that’s what this business model is about. To survive and grow into the next decade we must not just reduce the consumption of our customer base but we must reduce the consumption of our competitors as well. When a dirtbag holds on to a coat for another year he helps reduce Patagonia’s impact on the earth and its inhabitants. When Patagonia repairs a Columbia or North Face coat and it lasts for another year we have slowed the consumption of unethically produced clothes and possibly created another dirtbag. Exhibit I: Four Components of Business Model Framework (Johnson, Christensen, Kagerman) Customer value proposition (CVP): Current: Providing high quality durable outdoor athletic clothing and accessories (C&A) produced with a high standard for environmental and social impact. Proposed: In addition to production, engage the consumer in the environmental and social impact of their outdoor athletic C&A by involving them in the maintenance/repair/swap of C&A. Profit formula: Revenue model: Current: Standard industry mark up on goods sold. Proposed: Lower the price of goods sold and charge a small fee for repairs or continue with current price structure charge cost for repairs of Patagonia clothing/accessories, charge premium repair rates for non-Patagonia clothing and accessory repair. Cost structure: Current: COGS = 80% materials 20% parts with a wholesale margin of 45% and a retail margin of 65% Proposed: A modified cost structure that emphasizes retail sales and profits off of repairs Margin model: Current: Largest channel of sales in wholesale 44%, second retail 33%, and finally Catalog/internet 23% Proposed: Shift focus from wholesale to retail/catalog/internet sales, add additional emphasis on repair cost structure for maximum profitability Resource velocity: Current: In general keeping inventory exhausts resources, something which Patagonia wants to minimize. Thus production should match as close to demand as possible. Assets should be available, although they do not need to be incredibly liquid. Proposed: Same as current model. Key resources. Current: People: There is a certain type of person who works for Patagonia. Ideally a person who works at Patagonia is the ideal consumer of their goods. Brand: With a strong brand associated with high environmental and social standards combined with a strong dislike of standard advertising channels for the industry the reputation Patagonia’s brand has gained is remarkable (this is achieved through the people they employ as well). Technology: Their ethical commitment to responsible sourcing and production has resulted in some profitable patents of great C&A material. Proposed: The current Key Resources should not be lost but the Technology will shift to the new business model – a focus on materials , threads, and substances for repair. Additionally there would be a re-purposing of Facilities to reflect this model change as well. Key processes. Current: Rules and Norms: Patagonia’s Rules and Norms inform every aspect of their business and it is no different when it comes to their Key Processes. So while manufacturing, service, and training are all important, it all comes down to the Rules and Norms. Propsed: This would not change. When a new business model is needed. 1. The opportunity to address through disruptive innovation the needs of large groups of potential customers who are shut out of a market entirely because existing solutions are too expensive or complicated for them. The product repair market is just this. As it stands now such jackets tend to be luxury purchases as they hobbies they are designed for are not generally cheap ones to keep. 2. The opportunity to capitalize on a brand new technology by wrapping a new business model around it or the opportunity to leverage a tested technology by bringing it to a whole new market Patagonia isn’t capitalizing on a new technology when it comes to C&A per se but the market could motivate their R&D department to develop a technology that could be incorporated into the repair model. 3. The opportunity to bring a job-to-be done focus where one does not yet exist The expansion of clothing repair for Patagonia and other non-Patagonia C&A provides a real opportunity for an existing market that consumers may not know they need. It creates a job to be done (clothing repair as opposed to replacement). 4. The need to fend off low-end disrupters. Patagonia would be a low end disrupter in the repair market; repair is cheaper than replacement. 5. The need to respond to a shifting basis of competition. Patagonia would be shifting the basis of competition.

5 Types of Parallel-Structure Problems

5 Types of Parallel-Structure Problems 5 Types of Parallel-Structure Problems 5 Types of Parallel-Structure Problems By Mark Nichol There are many ways to botch the logical organization of a sentence. Here are examples of five variations, along with discussion and revision of each. 1. You can help not only position your organization for success when audited, but you can focus on protecting the sensitive information of your patients. Probably the the most common of problems with parallel structure is the mangling of â€Å"not only . . . but also† comparisons. When a verb sets up both the â€Å"not only† point and the â€Å"but also† counterpoint, it must precede â€Å"not only† so that it is not bound up with the first point and the â€Å"but also† phrase can therefore share it. Conversely, when each phrase contains its own verb, as here, one verb must follow â€Å"not only† and the other verb must follow â€Å"but also†: â€Å"You can not only help position your organization for success when audited, but you can also focus on protecting the sensitive information of your patients.† 2. She is as foolish, if not more foolish than, her fans. When a parenthetical phrase appears in a sentence, be sure that the sentence remains grammatically valid without it. When the interjection â€Å"if not more foolish than† is omitted from this sentence, what remains â€Å"She is as foolish her fans.† Because that sentence requires a second as to be inserted, after foolish, it belongs there when the parenthetical is included as well: â€Å"She is as foolish as, if not more foolish than, her fans.† 3. Employers can better communicate with this rapidly growing generation to increase their interest and retention of health, safety and loss-prevention training. Another common error in parallel structure is to assume that two nouns can share a preposition, when each requires its own. Here, â€Å"retention of† is a correct prepositional phrase, but interest does not combine with of; it requires its own idiomatic partner: â€Å"Employers can better communicate with this rapidly growing generation to increase their interest in and retention of health and safety loss-prevention training.† (The second prepositional phrase, bundled with and, can be parenthesized with commas, but the punctuation is not necessary.) 4. They called him sexist, racist, and highlighted his contentious relationship with the industry. This sentence makes three points: The person is sexist, the person is racist, and the person has a contentious relationship with the industry; observers are said to have labeled him with the first two negative qualities and emphasized a third factor. Just as the statement preceding the sentence you are reading right now has three verbs in the first clause, the original sentence requires a verb for each point. Better yet, the first two can be joined with a conjunction, rather than divided by a comma, so that they can share called: â€Å"They called him sexist and racist and highlighted his contentious relationship with the industry.† 5. Enforcement actions by regulators in the United Kingdom are usually less severe in comparison to the United States. Sometimes, the absence of a word or phrase renders a comparison incomplete. Here, enforcement actions are being faultily compared to a nation. For enforcement actions in one nation to be compared to enforcement actions in another nation, the detail, or a paraphrase of it (in this case, â€Å"those of†) must be reiterated: â€Å"Enforcement actions by regulators in the United Kingdom are usually less severe in comparison to those in the United States.† Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Grammar category, check our popular posts, or choose a related post below:25 Subordinating Conjunctions15 Words for Household Rooms, and Their SynonymsQuiet or Quite?

GUISEPPE MAZZINI essays

GUISEPPE MAZZINI essays The Italian nationalist Guiseppe Mazzini was considered not only a patron saint for his revolutionary actions, but a main character for laying the foundation for the unification of Italy. Guiseppes background, accomplishments, and his problems all contributed to his success as one of the most famous revolutionaries of Italy. Mazzini was born in 1805 in Genoa and died at the age of 67 in 1872. His teenage years were spent studying literary and philosophical studies. His literary style was remarkably fine. He wrote on politics, social science, philosophy, and literature. He was enrolled in the University of Genoa at the age of 14. He soon joined the Carboni. This group was a secret society that flourished in Italy, who originated in the kingdom of Naples in 1808. He was temporarily held in prison for revolutionary actions when he was a member of the Carboni, but he fled into exile. His accomplishments started at a very young age. He first developed a name for himself by becoming the founder of the revolutionary secret society Young Italy, which led a strong campaign for Italian unity under a republican government. Through his many ideas and writings he became a model of national sentiments. One of his most successful published books was The Duties of Man. This book explained that there was a hierarchy of duty, which showed God as first priority, Nation, and your family. During Mazzinis exile he had been condemned to death in Absentia. During the uprising States of Milan, the Papal States, and the Two Sicilies, Mazzini returned to Italy secretly to avoid death and took a position as a revolutionary leader of the Roman Empire. Mazzini had also advocated a mass revolt to force the Austrians and the papacy out of power. Many lost their lives, but were still inspired by his teachings and writings. Although Guiseppe had many victories, he also had many problems. He his impor ...

The Battle of Pichincha

The Battle of Pichincha On May 24, 1822, South American rebel forces under the command of General Antonio Josà © de Sucre and Spanish forces led by Melchor Aymerich clashed on the slopes of Pichincha Volcano, within sight of the city of Quito, Ecuador. The battle was a huge victory for the rebels, destroying once and for all Spanish power in the former Royal Audience of Quito. Background By 1822, Spanish forces in South America were on the run. To the north, Simà ³n Bolà ­var had liberated the Viceroyalty of New Granada (Colombia, Venezuela, Panama, part of Ecuador) in 1819, and to the south, Josà © de San Martà ­n had liberated Argentina and Chile and was moving on Peru. The last major strongholds for royalist forces on the continent were in Peru and around Quito. Meanwhile, on the coast, the important port city of Guayaquil had declared itself independent and there were not enough Spanish forces to re-take it: instead, they decided to fortify Quito in hopes of holding out until reinforcements could arrive. First Two Attempts In late 1820, the leaders of the independence movement in Guayaquil organized a small, poorly-organized army and set out to capture Quito. Although they captured the strategic city of Cuenca on the way, they were defeated by Spanish forces at the Battle of Huachi. In 1821, Bolà ­var sent his most trusted military commander, Antonio Josà © de Sucre, to Guayaquil to organize a second attempt. Sucre raised an army and marched on Quito in July 1821, but he, too, was defeated, this time at the Second Battle of Huachi. The survivors retreated to Guayaquil to regroup. March on Quito By January 1822, Sucre was ready to try again. His new army took a different tactic, swinging through the southern highlands on its way to Quito. Cuenca was captured again, preventing communication between Quito and Lima. Sucre’s rag-tag army of approximately 1,700 consisted of a number of Ecuadorians, Colombians sent by Bolà ­var, a troop of British (mainly Scots and Irish), Spanish who had switched sides, and even some French. In February, they were reinforced by 1,300 Peruvians, Chileans and Argentines sent by San Martà ­n. By May, they had reached the city of Latacunga, less than 100 kilometers south of Quito. Slopes of the Volcano Aymerich was well aware of the army bearing down on him, and he placed his strongest forces in defensive positions along the approach to Quito. Sucre did not want to lead his men straight into the teeth of well-fortified enemy positions, so he decided to go around them and attack from the rear. This involved marching his men partway up Cotopaxi volcano and around Spanish positions. It worked: he was able to get into the valleys behind Quito. The Battle of Pichincha On the night of May 23, Sucre ordered his men to move on Quito. He wanted them to take the high ground of Pichincha volcano, which overlooks the city. A position on Pichincha would have been difficult to assault, and Aymerich sent his royal army out to meet him. Around 9:30 in the morning, the armies clashed on the steep, muddy slopes of the volcano. Sucre’s forces had become spread out during their march, and the Spanish were able to decimate their leading battalions before the rear guard caught up. When the rebel Scots-Irish Albià ³n Battalion wiped out a Spanish elite force, the royalists were forced to retreat. Aftermath of the Battle of Pichincha The Spanish had been defeated. On May 25, Sucre entered Quito and formally accepted the surrender of all Spanish forces. Bolà ­var arrived in mid-June to joyous crowds. The battle of Pichincha would be the final warm-up for rebel forces before tackling the strongest bastion of royalists left on the continent: Peru. Although Sucre was already considered a very able commander, the Battle of Pichincha solidified his reputation as one of the top rebel military officers. One of the heroes of the battle was teenage Lieutenant Abdà ³n Calderà ³n. A native of Cuenca, Calderà ³n was wounded several times during the battle but refused to leave, fighting on despite his wounds. He died the next day and was posthumously promoted to Captain. Sucre himself singled out Calderà ³n for special mention, and today the Abdà ³n Calderà ³n star is one of the most prestigious awards given in the Ecuadorian military. There is also a park in his honor in Cuenca featuring a statue of Calderà ³n bravely fighting. The Battle of Pichincha also marks the military appearance of a most remarkable woman: Manuela Senz. Manuela was a native quiteà ±a who had lived in Lima for a time and had been involved in the independence movement there. She joined Sucre’s forces, fighting in the battle and spending her own money on food and medicine for the troops. She was awarded the rank of lieutenant and would go on to become an important cavalry commander in subsequent battles, eventually reaching the rank of Colonel. She is better known today for what happened shortly after the war: she met Simà ³n Bolà ­var and the two fell in love. She would spend the next eight years as the Liberator’s devoted mistress until his death in 1830.

Democratic candidate Essay Example | Topics and Well Written Essays - 500 words

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Corporate Social Responsibility (CSR) Essay Example | Topics and Well Written Essays - 1000 words

Corporate Social Responsibility (CSR) - Essay Example In earlier times it was considered that the business is only responsible for the shareholders’ interest and other investors who have invested in the business but later on it was realized that business is not only responsible for its shareholders but each and every stake holder who is affected by the activities of the company (Sacconi, 2004, p.6). Corporate social responsibility is a broader concept as per which the corporate organizations has some responsibilities towards the society as a whole and therefore should practice ethical behavior and should also work towards the development of the society. This is a way of paying back to the society for the resources it has used and the environment in which it operates (Murthy, 2007, p.13). Thus Corporate Social responsibility can be described managing business responsibly (The world business organization, n.d, p.4). As per the OECD guidelines CSR activities should be such which through which the MNCs can contribute in economies and promote social welfare and sustainable environmental development in the countries in which they are operating such type of activities in turn will reduce the obstacles faced by the companies like agency problems in those areas (Heal, 2004, p.12). The corporate social responsibility helps the company in a number of ways. For example by following the CSR activities the company can reduce the risk at the same time it can reduce the wastage of scarce resources as the CSR guidelines will lay down the principles which will be followed to while working. CSR activities also helps the company to gain the brand equity as the companies who contributes towards the society are favored more and are respected everywhere. CSR also helps in increasing employees’ productivity and performance by promoting staff welfare (Heal, 2004, p.13-19). Thus by ensuring corporate social responsibility the companies can also improve their own performance. As per Mr. Gerald

Case analysis Essay Example | Topics and Well Written Essays - 500 words

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