Impact Of Pandemic On Sustainable Development And Competitive Positioning: A Case Study Of Patagonia

Impact of Pandemic On Sustainable Development On The Company

The chosen firm for this particular report is Patagonia. The firm is an outdoor clothing retailer based in America. Yvon Chouinard established  Patagonia in 1973 with headquarters in Ventura, California (Chouinard 2016). A reputed and multi-million dollar clothing organisation across America, Patagonia markets sustainable outdoor apparel and clothing. Since its beginning, Patagonia has held ethical and environmental issues close to its heart. Patagonia stands out with a higher proportion of materials made from recycled fabric like nylon, wool and polyester (Russell et al. 2016). The firms also follow a different model for doing business by rejecting fast fashion and creating higher quality and enduring products along with an offer for reuse and repair program. Patagonia is an international firm with a global footprint. The firm operates and owns offices across the United States, Japan, Netherlands, Australia, South Korea, Argentina and Chile.

The objective of the report is to provide an insight into the impact of the pandemic on the sustainable development of the firm. The report will also help identify the competitive stances of the firm. There will also be the identification of its competitive positioning through PESTLE and SWOT. In addition to this, the report also puts forward recommendations for strengthening the firms’ sustainability. A conclusion then follows it.

Covid-19 seem to be perceived as the intensifying socio-economic challenge, with close to four amongst the ten experts holding on to the belief that rising inequality, as well as poverty, happen to be the most prospective impacts of a pandemic (globescan.com 2021). When the most urgent challenges to sustainable development have been ranked, experts believed that climate change happens to be the pressing issue; however, issues like access to energy, security of food, discrimination and diversity have risen the most amongst perceived urgency in the last year (db.com 2022). In this regard, Patagonia happens to be recognised for maintaining sustainable leadership. It is a signal where the hallmarks of the leaders seem to have shifted, with sustainable models of business and strategy being the strongest driver of the recognised leader that seems to overtake the target setting and ensure the articulation of the purpose and values. According to experts, the result of the pandemic happens to be an interconnected economic, social and environmental challenge. None can be separately handled since it requires the organisations like Patagonia to incorporate more wide-ranging sustainability strategies into the business as well as the operating model. Sustainability influencers and experts worldwide seem to reinforce the earnestness of planetary challenge that ranges from climate changes to inequality, thus putting across a hope to prioritise sustainability. There is much need for facilitating the transition to sustainable development at a greater pace than what is being done presently. Leading businesses like Patagonia should look forward to stepping up action towards sustainable development. It is necessary since the crisis created by the pandemic hugely impacted the priorities of sustainable development and called for the need to focus on more inequalities, increase the level of attention to the environment, give lower priority to sustainability, more attention to public health, unemployment and the shifting patterns of labour, increased focus on the social issues rather than environment, more production locally and an impact on education or research.

Identification of the Competitive Stances for the Firm

The firm’s competitive stance lies in making easygoing higher performance gear, thereby leaving a footprint. In addition to thoughtful design, authenticity and strong ethos, Patagonia is known for its environmental advocacy for clothing (gq.com 2022). The vibes of the firm make it stand out to remain rooted in ideas that clothes seem to be manufactured to last for the future and not just for the seasons. The firm also focuses on addressing human impact across the supply chain, and they consider it a commitment beyond the environment. In other words, Patagonia looks forward to raising awareness around disposability of not simply the products but also the people. The firm has thus been able to prove that it brought about a reformation in consumer behaviour.

Further, the competitive stance of Patagonia also lies in cause marketing (Rattalino2 018). The firm’s value proposition has been to develop lasting products so that the customers can show their responsibility towards the environment. The firm also promoted its position through an ad that addressed the environmental cost of one of its most selling sweaters, thereby asking the customers to re-consider the purchase. It was followed by the firm’s campaign on the Responsible Economy to move forward its stance on responsibility while backing up its belief that consumption and over-production are the reasons behind the global environmental crisis (Dauvergne and Lister 2013). The brand also undertakes initiative for ‘Worn Wear Program’ where brand ambassadors and the repair technicians teach the consumers the assistances in fixing their old clothing. They also allow the consumers to share stories on Instagram Channels and blogging sites initiated by the ‘Worn Wear Program (Michel et al. 2019).’ Such efforts distinguish Patagonia from its competitors and earn the topmost position among sustainable brands (Spivey 2015)

To compete within  the market and have a market positioning, the strengths, weakness, opportunities and threats that are vital for Patagonia are as  follows:

Strengths:

 When it comes to strength, Patagonia has ample strengths that enable it to compete in the market. These include:

• Eco-Conscious Attitude: With increasing eco-conscious clients, Patagonia seems to use such coverage and decide to spend close to one per cent of the total sales. It accounted for close to 1 million USD. To live up to this, Patagonia also has a green store logo as its identification (Michel et al. 2019). To reduce the impact on the environment, Patagonia took up a marketing campaign for deterring the clients from purchasing new garments from outside. This marketing campaign is also known as the ‘buy less’ campaign. Prioritising the ambience greater than the earnings resulted in better sales and positioning for Patagonia.
• Unique Strategies of Marketing: The campaign related to the Global Climate Strikes happens to be the biggest strength of Patagonia. This aids in attracting environmentally conscious individuals. Patagonia holds its sustainability through specific missions. With rising social awareness among clients, the impact of the manufacturers is considered crucial for the clients, like actual products (Drawbridge 2018).
• Increasing Popularity Amongst Consumers: Patagonia has always made a place amongst the consumers with its core operations concerning the sustainable consumption of resources. The integrity, along with the operational philosophy of eco-consciousness, has made it one of the loved merchandisers across the world (Hepburn 2013). Patagonia defined its position amongst the competitors by prioritising the employees, consumers, communities and the environment over the profits (Iglesias and Ind 2020).

Weakness: Some of the weaknesses that Patagonia need to take care of to maintain its competitive positioning in the market  are as follows:

• Technological lag: Patagonia has been found to have misleading economic plans, making them lag in certain instances (Brown and Zsolnai 2018). There is a need for greater funding to adopt advanced technology and increase productivity. It is primarily the fallacious strategy of the firm that prevents them from receiving the additional funds. To compete in the market, Patagonia needs to expand its online sales. Given the pandemic crippled society, this can be considered a notable weakness.
• Overdependency: Like any other clothing firm, Patagonia is dependent on suppliers from Asia. Although the firm guarantees each provider to abide by the philosophy and policies, it is not exposed to troubles associated with a bigger delivery chain, such as over-reliance. It is necessary to maintain a position in the market.

Opportunities: These are considered outdoor elements that Patagonia can consider and use. These includes:

• Renovation of the Product Line: To remain competitive, Patagonia can expand its business line with day-to-day apparel, sportswear and second-hand clothing (Lascity and Cairns 2020). It will enable the customers to identify that the firm seems to be more in control which plays a role in drawing more clients towards the brand.
• Undertaking Expansion To More Places: Patagonia should capitalise more on the eco-friendly aspects since it will allow the firm to enter a less affluent market thereby ensuring greater expansion worldwide.
• Improving the Product Quality: Considering the higher levels of profit margins, Patagonia can invest in ensuring the pleasantness of the products, thereby ensuring the clients’ continued trust and maintaining a competitive position (O’Rourke and Strand 2017).

Threats: These factors seem to hold back Patagonia from becoming competitive. Some of these factors include:

• Volatile Environment: Covid-19 has brought about threats to public health, but it has also brought about a change in the climate. In the face of climate change, it becomes difficult for Patagonia to manufacture goods crafted from herbal substances like wool and cotton as these products remain quite susceptible to the change in the climate.
• Presence of Other Competitors: Counterfeit and low-quality products threaten corporate. The products of Patagonia does not seem to be different and innovative for challenging the styles and ideas of the competitors (Bocken et al. 2016). In the presence of certain heavyweight competitors, it will become difficult for Patagonia to survive if they do not come up with innovative products.

Covid-19 has made people aware of the vulnerability, thereby justifying the extreme measures (forbes.com 2020). The pandemic has also encouraged businesses to focus more on sustainability. The aspect of sustainability has become a business need and not simply a differentiator. In the upcoming years, businesses shall require to adjust themselves to new social, environmental and governance risks or might face extinction. Sustainability is no longer the question of being a necessity or not but instead how long businesses might take to incorporate it before being punished by the shareholders, consumers or the government. Sustainability happens to be the new reality of business but not the trend. Firms now shall be forced towards complying with the measures put across by the government. Established firms shall be considered sustainable provided they focus on sourcing, growth strategies and employment. Firms that were launched with sustainable agenda comes with an advantage. Sustainability concern acts as an opportunity in bringing products and services to the market for meeting the new demands of the customers. Some  recommendations that can be put across for Patagonia to strengthen its sustainability are as follows:

• Change of Performance Metrics and the Reporting Standards: It is to be noted that a firm’s future depends on the incentives that the employees seem to work for today. For a firm to become sustainable, it needs to change its internal workings. Regulators seem to be encouraging the aspect via new classifications and tools. To improve its sustainability, Patagonia can focus on the environmental objectives that would aid the investors in understanding the opportunities and risks associated with the sustainability of their investment.  
• Acquiring Finance to Transition into Lower Carbon Economic: Asset managers and banks play a key role in aiding the transition to a lower-carbon economy, thus improving the local communities. Pursuing of better sustainable agenda, disclosure of Environmental, Social and Governance (ESG) risk, and the marking of activities and clients that force outdoor retail firms like Patagonia to transform to newer sustainable products for replacing any lost revenue, thereby raising the net interest.
• Adoption of Technology to Enable the Change: Big data, artificial intelligence (AI), blockchain and the Internet of Things (IoT) are considered vital for digital transformation (Vermesan and Bacquet 2017). They are also crucial aspects in determining sustainability, enabling acquisition of data, curation and storage, analysis and insight, and accountability and trust that the firms require to access compliance with environmental, social and governance (ESG). Therefore, Patagonia should adopt the required state of the art technology to improve sustainability.

Identification Of Competitive Market Positioning

Conclusion:

On a concluding note, it can be said that Patagonia has been known as one of the most remarkable socially responsible firms. The firm makes its customers feel that they contribute towards protecting the environment through the extension of a value proposition that is beyond the functional value proposition of higher quality equipment and clothing. Patagonia has also recently adopted the benefit corporation structure to strengthen governance. The report also portrays that Covid-19 has impacted not only the global sustainable development but also the sustainable development of Patagonia by amplifying issues that needed to be dealt with for greater mobilisation across the globe. The firm believes in achieving its competitive stance by building the best products, causing harm and using the business for implementing and inspiring solutions to the environmental crisis. A SWOT analysis of Patagonia however portrayed that to remain competitive; the firm needs to improve its product line, adopt more expansion, enhance its website and introduce new products similar to competitors. Lastly, the report also presents necessary recommendations to Patagonia to improve sustainability. To do this, Patagonia needs to change the reporting standards and performance metrics. It should also acquire finance for transitioning into a lower carbon economy and adopt technology to enable change. 

References:

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