Environmental Sustainability and Brand Story - MyAssignmenthelp

Question: Discuss about the Environmental Sustainability and Brand Story. Answer: Introduction: Patagonia is a USA based clothing company that is planning to grow out of USA and operate in the global clothing market. The organization has first entered the UK market through independent stores; however the store is now planning to enter the UK clothing industry with their own stores. For this purpose, the organization requires to analyze the macro factors that can affect the business activities and decision making process. This analysis will also help the organization to plan its strategies according to the trends of competitive market. There are various political factors that can impact the presence of Patagonia at the present time; however it can also affect the sustainability of the company in the near future. There are major political reasons that can influence the organization such as the tax rate that has been levied by the UK government (Hepburn 2013). The tax rates have the capability of affecting the bottom line of the organization, not only considering the corporation, but also the capability of the consumers for spending much for their clothing necessities. However it should also be noted that there are few geopolitical factors that has impacted the fashion industry in UK in a positive way, even though the uncertainties still prevail. As stated by Long and Fain (2015) terrorism, geopolitical instability, stalled trade deals, terrorism tend to increase the invasive sense of uncertainty within the international economy. Other than terrorism, there are various kinds of political tensions that have kept affec ting the business in UK, therefore raise the uncertainty level for the fashion industry (Puustinen 2016). The continuous political shifts in UK and USA have impacted the situation of fashion industry. The interest rates have also stated staying at a low pace for the last few years. However, this factor can be beneficial for the company as they can be capable of borrowing huge amount of money for capital expansions within a lower rate that the past. These borrowings can be effective in place of long term borrowing and at the same time, the organization may also face issues for choosing corporate bonds. Current economic environment of UK can have a severe impact on the business of Patagonia in UK market. Since the business makes premium differentiated strategy, it can be seen the overall economic situation has the capability of impacting the future of the company to a great degree than operating in the budget and necessity sector in the global market. Considering the statistical perspective, it has been seen that there is a continuous financial rollercoaster in the UK market (Myers 2017). After the onset of the international economic crisis in the year 2007, the GDP growth had reverted to negative figures in the economy. The following years had given worse performances. However, the situation started recovering from 2011, however the statistics still show that the economic condition of UK has not been stable yet and it has continued becoming a flat line (Bocken et al. 2014). In addition to that, the low employment rate and disposable income for the households can be an alarming patt ern for the business activities of Patagonia. For the last ten years, there are several social changes that have taken place in UK. These changes have indicated that the millennial is the primary target for the fashion industry; therefore the organizations have to keep in mind that the choices of this generation are a lot different than the previous ones. There have been huge changes in the at the socio-cultural level which have made the millennial generation do not just go for convenient shopping habits, but they also go for good quality products and low prices (Shih and Agrafiotis 2015). With the demographic changes, the organizations in fashion industry are facing new challenges. Therefore they have to realize the push and the rapid rise of fast fashion. The taste of fashion has changed; therefore the organizations should have aligned their productions with that. Since Patagonia has been operating in the UK market for quite some time, they may have some idea of the UK market trends, therefore this can be a positive side for t heir business (Johnson 2016). For developing the fashion retail within UK market, technology plays a significant factor. With the improvements of internet, IT, globalizations and the maximized usage of mobile devices are now changing the customer choices and marketing and sales. The customers are now well read and make their choices after doing proper researches regarding the brand and material (Bocken and Short 2016). They also share their views on social media sites. In addition to that, the millennial generation also shops online, therefore Patagonia also need an online website for providing sufficient customer service. Technology has also helped the organizations in expanding their business overseas like it did in this case (Payne 2014). Therefore the e-commerce has helped them to go beyond the national borders and interact with huge consumer segment. Both the sustainability and environment are significant factors for the fashion industry. The organization requires being more careful for their carbon footprint which will make them more environment-friendly. Patagonia should use raw materials, manufacturing and packaging that are environment friendly. As stated by Bocken et al. (2014) prioritizing sustainable fashion would help the organization to work on their transformation in manufacturing as well. It has also been seen that more than sixty five percent of the customers are now opting for sustainable fashion products. The sustainability factor has also become a major influencer for the purchasing decision of the customers. Therefore the organization has to work on their sustainability goals and achieve them for attracting more customers. There are few legal and ethical challenges for the fashion industry. These are the major focus areas for the organization and Patagonia has to work on that. As this organization will also act as a large employer, therefore the labor laws along with the other common laws will be applicable for the business activities (Ward 2017). In the recent times, the environmental laws have developed which should be taken care of. The other laws related to global trade should also be taken care of as the transparent and ethical image of the brand can be beneficial for the success of the business. Opportunities and threats for entering UK market: The brand offers several kinds of products that can attract a huge customer base in UK. As the brand only targets the customer base consisting of outdoor activists and upper middle class customers, there is a higher chance of brand loyalty amongst them (Puustinen 2016). In addition to that, the durable products create more opportunities for the brand in UK market. The brand can also increase their brand exposure through rigorous marketing and advertizing. Through improving their presence on the social media, Patagonia can improve their exposure on the campaigns (Song and Lewis 2013). After entering the UK market, the brand can also increase the product line which will help them to enter the new outdoor market easily. There are other outdoor clothing brands in the market that can act as a huge threat for the business activities of Patagonia. These companies are often with more reasonably priced merchandise, therefore there are higher chances of market saturation. The ongoing financial uncertain situation in UK can also be a budding threat for the company (Petrie 2016). Along with that the adverse situations in the manufacturing countries and the provider of raw material can also be a huge threat for the business of this brand. Critical discussion of Patagonias resources and competencies There are several kinds of resources for a company such as tangible resources and intangible resources. Within the tangible resources, there are two subdivisions: financial resources and physical resources. The financial resources refer to the borrowing capacity of the company, in hand cash and the generated cash, whereas the physical resources refer to building, raw material, machinery, retail outlets, real estate, warehouses, inventory etc. The intangible resources include the human capital, technology and relational resources (Ward 2017). The human resources are the most significant intangible resource of a company. This section will discuss the physical, financial and human resource of Patagonia. The organization sells the outdoor clothing which is marketed as the sustainable products. Patagonia also commits 1% of their entire sales or 10% from their profit for the environmental purposes. The organization has been founded in the year 1973 and since then the organization has made its way through the global sustainable companies (Patagonia.com 2017). Other than North America, the organization has its presence in Japan and UK; however in UK the organization operates through 24 independent stores. There are 68 shops all around the world such as Spain, San Sebastian, Dublin, Milan, and Munich (Patagonia.com 2017). Patagonia has the global turnover of $600m every year. Considering the global environmental crisis, the organization donates 1p of its annual gross revenues to the welfare of the environmental crisis, which was around $6m in the last financial year (Patagonia.com 2017). The employees of Patagonia are quite passionate regarding their products; mostly they themselves use these products and try to provide more input as the users. The organizational culture in Patagonia has been successful in attracting and retaining employees who have the flexibility and tend to focus more on balancing work and life. The employees play a major role in their success (Pal 2017). The balancing between work and life has also played a major role in retaining the talents in both the offices and stores which have resulted in having lower employee turnover rates in the company. The core competency of the company is the concept of being environmentally sustainable. The company has taken various initiatives for sustainability. One of the most effective ideas was the initiative of encouraging the consumers to send back their old garments to others who cannot buy those (Patagonia.com 2017). The company has also taken the mission of building the best products without doing any unnecessary harm and utilizes the businesses for inspiring solutions to the ongoing environmental crisis. Patagonia is the benefit corporation in North America which has codified the commitment to the nature and the community in a larger way. in the year 1996, the organization was labeled to be the first clothing organization which has launched clothes made of pesticide free and organic cotton. Critical evaluation of Patagonias current mission statement The mission statement of Patagonia is to Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. The vision of the organization is to Learn more about our reason for being, the struggle to become a responsible company and how our business affects global environmental issues like global warming (Patagonia.com 2017). The organization has developed from a very small organization which was making apparatus for the climbers. This factor has remained the at the heart of the global business activity as the organization still makes clothes for different outdoor games such as climbing, snowboarding, skiing etc. The values, vision and mission statement of the organization reflects this very idea and specifically through the minimalist style that they are promoting. The product design approach also exhibits the concepts of utility and simplicity mentioned in their mission statement (Patagonia.com 2017). The vision and mission statement of the company also reflects that the organization is working towards decreasing or creating no harms to the environment. As a clothing brand, the business activities of the organization include dyeing shirts, lighting store and several others which may be harmful towards the environment as it may create pollution in the process. Therefore, the organization also works towar ds reducing these harmful chemicals and recycles the polyester that is being used in the clothing materials and provides organic cotton that is without any kind of pesticides. It has also been found that the organizational activities are aligned with the core values and stay true to them. Not only that, the organization has also donated 1% of the annual sales of the company for environmental charities for more than thirty years. In the year 2013, Patagonia has also made an announcement for donating $20 million as a new initiative for starting up and developing more innovative solutions for important sustainability issues (Patagonia.com 2017). Patagonia has also taken initiative for Sustainable Apparel Coalition with the aim of producing no environmental harms and having more positive impact on the community and people around and associating the communities with the activities. Other than this, the company has taken numbers of initiatives with the aim of creating a sustainable future. The organization also has a sustainability department. This indicates to the commitment to the environment and corporate social responsibility (Patagonia.com 2017). Therefore it can be said that the vision and mission statement of the organization require no such changes in these as the organizational activities are already linked and aligned with these statements. SWOT analysis of Patagonia and recommendation The sustainable organizational activities are the major strengths of the company. Patagonia has the media presence in various kinds of media. With the media campaign and the advertising, the organization has already made a difference in making sustainable products. Therefore the customers tend to get attracted to their products easily. With their media campaigns for buying sustainable products, Patagonia has stood differently amongst the other companies and created a competitive advantage with their positive brand image (Bosco 2017). Therefore, organization should create a sentimental appeal to the customer base with their attractive merchandise and durable products. The company should plan rigorous media campaigns so that more customers in UK can be attracted to the brand. One of the major weaknesses of the organization is that the products are quite expensive; therefore the customer base is limited. Also, the organization is mostly focused on restricted outdoor activities. According to Wintrob (2016) the close and limited gear and limited advertizing can affect the brand image. The low employee turnover and less fashionable products as compared to the competitors of the brand are also major weaknesses of the brand. Therefore, Patagonia can come up with a product line that is not much expensive. With this product line, they can target the more customers who may have not opted for the brand before. Along with that, the brand should incorporate more innovation in their product line as well. The brand offers several kinds of products that can attract a huge customer base in UK. As the brand only targets the customer base consisting of outdoor activists and upper middle class customers, there is a higher chance of brand loyalty amongst them (McCoy 2016). In addition to that, the durable products create more opportunities for the brand in UK market. The brand can also increase their brand exposure through rigorous marketing and advertizing. Through improving their presence on the social media, Patagonia can improve their exposure on the campaigns (Puustinen 2016). After entering the UK market, the brand can also increase the product line which will help them to enter the new outdoor market easily. There are other outdoor clothing brands in the market that can act as a huge threat for the business activities of Patagonia. These companies are often with more reasonably priced merchandise, therefore there are more chances of market saturation. The ongoing financial uncertain situation can also be a budding threat for the company (Petrie 2016). Along with that the adverse situations in the manufacturing countries and the provider of raw material can also be a huge threat for the business of this brand. Therefore coming up with a reasonably priced product line can be helpful for the brand. Reference list Bocken, N.M.P. and Short, S.W., 2016. Towards a sufficiency-driven business model: Experiences and opportunities.Environmental Innovation and Societal Transitions,18, pp.41-61. Bocken, N.M.P., Short, S.W., Rana, P. and Evans, S., 2014. A literature and practice review to develop sustainable business model archetypes.Journal of cleaner production,65, pp.42-56. Bosco, M.C., 2017. 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