Patagonia: Driving Sustainable Innovation by Embracing Tensions
by Dara O'Rourke and Robert Strand
This case study examines the tensions that arise when Patagonia simultaneously pursues sustainability and quality objectives embedded within its mission statement to 'Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.'' Specifically, this case study focuses on Patagonia's Durable Water Repellent (DWR) problem-DWR is a highly effective chemical treatment used to waterproof jackets supporting the quality objective, but it has by-products that are toxic and persist in the environment (undermining the sustainability objective). This case presents Patagonia's (and the industry's) challenges, its history trying to resolve the problem, including research, its temporary solution to use a less harmful but less effective option in C6, and its investment in Beyond Surface Technologies through $20 Million & Change, amongst others. The case also discusses external issues such as competitors and their efforts, pressure from Greenpeace, governmental involvement, and chemical industry actions. At the higher level, the case focuses on the question of how companies like Patagonia drive innovation down the supply chain to chemical and material suppliers, as well as how they think about innovation/disruption across the entire system, all the while grappling with internal tensions between performance, durability, and their commitment to cause no unnecessary environmental harm.
To teach students how to address corporate challenges and tensions surrounding a company's mission and performance, durability, and profitability.
Pub Date: Feb 15, 2016
Discipline: Social Enterprise
Subjects: Environmental activism, Environmental protection, Innovation, Social issues, Corporate social responsibility, Manufacturing, Sustainability, Supply chain management, Green business
Berkeley Haas Case SeriesFollowThe Berkeley Haas Case Series is a collection of business case studies written by faculty members at the Haas School of Business. Cases are conceived, developed, written, and published throughout the year, on subjects ranging from entrepreneurship and strategy to finance and marketing. Each case includes a teaching note for use in the classroom.