How do you make money when you tell your customers ’don’t buy our stuff unless you really need it?’” This was the question that Yvon Chouinard, founder of the clothing company Patagonia, asked himself as he considered developing a new partnership with eBay in which customers would buy and sell used Patagonia gear on eBay rather than buy it new. As he considered this new partnership, Chouinard would have to balance the environmental priorities upon which Patagonia was founded with its financial well-being. This is a two-part case. Part A presents the decision which Chouinard is considering, while Part B presents the decision that Chouinard chose. The A and B cases were written by graduate students Allyson Johnson, Courtney Lee, Steven Rippberger, and Morgane Treanton, under the supervision of Professor Andrew Hoffman.
Patagonia: Encouraging Customers to Buy Used Clothing (A)
by: Andrew Hoffman
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After reading and discussing the material, students should:
- Explore a company that has incorporated sustainability and CSR into the core of its long-term business strategy.
- Analyze how and why strategic options differ between public and private companies, and how these differences can influence the successful adoption or execution of sustainability strategies.
- Identify critical components of a successful sustainability strategy and the competitive advantages that such a strategy can confer.
- Discuss and analyze common business concepts such as “minimize costs,” “maximize profits,” and “maximizing business growth.”