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TOMS Case Study Analysis

TOMS Case Study Analysis

Case 10 If the Shoe Fits: TOMS and the One for One Movement

Introduction
TOMS Shoes is a for-profit business with a large philanthropic component. The company was started after entrepreneur Blake Mycoskie witnessed the poverty among villagers in Argentina, poverty so extreme that the villagers could not even afford a pair of shoes. Mycoskie returned to the United States with 200 Argentinian shoes and a mission. He went from one retail store to another with a unique business proposal. He would start an organization that would provide a pair of shoes for an Argentinian child in need for every pair of shoes purchased from his business. After many meetings and discussions, a few Los Angeles boutiques agreed to sell the shoes. Mycoskie’s idea was eventually picked up by the Los Angeles Times, who ran an article on his extremely unique business idea. To his surprise, the following weekend garnered $88,000 in orders. The orders didn’t slow down there, and two years after officially establishing TOMS Shoes, the business had $9.6 million in revenue.Most firms do not want other companies to copy their successful business model. However, the shoe retailer TOMS is not your typical retailer, and the firm’s business model is unusual to say the least. While many organizations try to incorporate social entrepreneurship into their business operations, TOMS took the concept
of philanthropy one step further by blending a for-profit business with a philanthropic component in what they
termed the One for One model. For every product purchased, TOMS donates products or resources to help those in need. The cost of providing the products to those in need is already built into the products’ sales price, turning the customer into the benefactor. The philanthropic component is just as important as the for-profit business for TOMS. TOMS’ goal is to be able to turn a profit, support themselves, make the world a better place, and educate consumers, all at the same time.

TOMS has applied the One for One model to its other products as well. For every product purchased, including TOMS Shoes, TOMS Eyewear, and coffee bags from TOMS Roasting Co., TOMS will help a person in need. For every pair of glasses sold, for example, TOMS provides a person in need with a full eye exam and treatment including prescription glasses, sight-saving surgery, or medical treatment to restore their sight. For each bag of TOMS Roasting Co. Coffee purchased, TOMS gives an entire week’s supply of safe drinking water to a (Excerpt)a. Summarize case study 10 into 4-5 paragraphs,

b. Respond to the 3 discussion questions:

1. Why was it necessary for TOMS to evolve their business model?

2. Who are TOMS most important stakeholders, and why?

3. Is the One for One movement business model appropriate for any other businesses?

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