Patagonia's Intellectual Assets

Patagonia Inc. relies heavily on their intellectual capital to create an edge for the company. The firm’s positive reputation, employee loyalty, good customer relationships, and strong company values place Patagonia in a leadership position when it comes to intangible resources. Patagonia’s intellectual assets include both their human capital, such as dedicated employees, and their social capital, such as their internal and external relationships.

Patagonia is able to attract a strong workforce by sound recruiting approaches and networking. One concern in particular Patagonia focuses on when hiring is to make sure a job candidate shares the same values that the company holds so highly. It would be important that a prospective employee fit into the environmentally conscious mentality of the firm and share in the company’s love for the outdoors.

In order to continually develop human capital, Patagonia offers on-the-job training to employees and constantly promotes creativity. The laid-back culture of the firm allows for job sharing and employees to be flexible when it comes to their schedule. Patagonia looks to hold true to their values and traditions when developing human capital.

Patagonia is able to retain their human capital by offering challenging work in a stimulating environment and relating their mission and values to those of their employees. A particular employee might find work at Patagonia empowering because they know that what they are doing is making a difference in the world, notably in the environment. The friendly culture of Patagonia entices employees to stick around; especially since they can take part in company sponsored skiing trips, run around their office barefoot, or even go surfing at lunch.

Patagonia's Internal Environment

Looking at the operations of Patagonia from an internal perspective, it can be said that the firm operates using resources and organizational capabilities to their fullest potential. Patagonia creates value as a company through their knowledgeable use of primary and secondary activities. Their effective plant operations in particular add value to their business. As a member of the bluesign Standard, Patagonia maintains a management system conscious of environmental performance in five key areas of the production process - resource productivity, consumer safety, water emissions, air emissions, and occupational health and safety.

Three tangible resources that Patagonia has which allow it to compete in the outdoor apparel industry would include their unique and effective products, their favorable manufacturing locations, and their innovative production processes. Three intangible resources would include their reputation/brand name, their environmental activism, and their internal organizational culture. All of these resources, both tangible and intangible, are sources of competitive advantage for Patagonia.

As a firm, Patagonia also demonstrates organizational capabilities which allow it to transform inputs into outputs. Patagonia exemplifies excellent organizational capabilities in the areas of product development and manufacturing, customer service, and innovation. When it comes to their products, Patagonia strives for quality and leadership in the area of environmentalism.

About Patagonia & their External Environment

Patagonia Inc. is an outdoor apparel company that designs and manufactures clothing, footwear, luggage, and other outdoor gear for for men, women, and children. Patagonia was founded in 1973 and is headquartered in Ventura, California. Although the company offers its products to everyone, the target market is primarily outdoor sports enthusiasts. Patagonia is known for their philanthropy and active environmental efforts.

The external environment of Patagonia is filled with numerous opportunities and threats. Patagonia has done a nice job of taking advantage of the opportunities presented by the environment when making decisions regarding their products. As an envirnomentaly concious organization, Patagonia strives to protect the environment through initiatives, grants, and the ways they make their products and dispose of waste. There is opportunity for Patagonia to reach out to suppliers and buyers who are concerned with conserving the environment.

The threats that Patagonia faces has to do with the bargaining power of buyers and the threat of industry competition. As a company focused on quality, Patagonia faces the threat of buyers forcing down their prices by not purchasing their goods. Buyers might feel that their products, although high-quality, are too pricy to buy. There is also the threat of competitors in the outdoor apparel industry, such as the North Face, Marmot, and REI. Rivarly between the firms could be potentially hazardous to Patagonia.