Patagonia SWOT and PESTLE Analysis

Strength

1. Highly effective marketing targeted at environment conscious consumers: Patagonia’s marketing strategy is aligned with its purpose of protecting the environment, and the marketing efforts are targeted at environmentally conscious consumers. The highly visible efforts of the company to save the environment has endeared it to consumers and have led to increase in revenues, defying mainstream logic. For instance, an ad in 2011 had actually discouraged customers to buy one of the company’s best-selling fleece jackets, asking people to consider using a used Patagonia product instead. This campaign led to a 30% growth in revenues to $543 million in 2012, and another 5% growth in 2013. This shows that the marketing efforts have led to consumers trusting the company and buying the company’s products.

2. Diversified product line and operations: The company believes in reducing business risk through diversification of product lines and operations. The American clothing company has diverse distribution channels for putting its products in the hands of end consumers. These channels are dealers, own retail stores, mail order and ecommerce. The distribution happens worldwide. This diversity of distribution gives the company an advantage during times of recession because the downfall in wholesale sales would be offset by direct sales channels as there would be no reduction in demand for the products from loyal customers. The business across geographies of North America, Europe, Asia and Latin America shields the company against downturns in any of the areas.

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Circular economy to reduce waste: The circular economy is increasingly becoming a popular way of waste elimination and effective use of resources. Patagonia has come up with initiatives to promote circular economy. The Worn Wear strategy encourages repair and reuse of Patagonia garments to extend their life and reduce the environmental footprint. The company started collecting clothing from customers for recycling in 2005 through the Common Threads Recycling program.

2. Rising concerns about climate change: The rising concern about climate change has led to many companies coming up with initiatives to address the issue. Patagonia considers fighting climate change as one of the core parts of its mission. The company’s goal is to become carbon neutral across the entire supply chain by 2025, and then work towards becoming carbon positive. The company had set a goal of 100% usage of renewable electricity across all its properties globally by 2020. As of 2019, the company has achieved 100% status in the US centers and 80% globally.