I have attached the article document below, need 8-10 PPT Slides with In-text citations, references and pictures with plagarism report. for below two topics.
1. External environment
2. SWOT and corporate level strategy
Refer the article and complete ppt slides
Daniels Fund Ethics Initiative University of New Mexico
http://danielsethics.mgt.unm.edu
This material was developed by Alicja Spaulding, Stephanie Fernandez, and Jennifer Sawayda under the direction of O.C. Ferrell and Linda Ferrell. It is provided for the Daniels Fund Ethics Initiative at the University of New Mexico and is intended for classroom discussion rather than to illustrate effective or ineffective handling of administrative, ethical, or legal decisions by management. Users of this material are prohibited from claiming this material as their own, emailing it to others, or placing it on the Internet. Please call O.C. Ferrell at 505-277- 3468 for more information. (2011)
TOMS: One for One Movement
INTRODUCTION
TOMS Shoes is a for-profit business with a 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 Argentinean 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 a
child in need for every pair of shoes purchased. Finally, a few Los Angeles boutiques agreed to sell
the shoes. Mycoskie’s idea was picked up by the Los Angeles Times, which ran an article on his
business idea. To his surprise, that weekend garnered him $88,000 in orders. Two years after
officially establishing TOMS Shoes, the business had $9.6 million in revenue.
The TOMS business model is unusual. While many businesses engage in cause-related marketing, at
TOMS the philanthropic component is just as important as the for-profit business. The cost of
providing the shoes to children in need is built into the shoes’ sales price. The customer is thereby
turned into the benefactor, enabling TOMS to become a sustainable organization based on giving
back to the world on a continuous basis. As long as people continue to purchase TOMS shoes,
children in need will receive a pair in return. In the process, TOMS is also able to turn a profit,
support itself, make the world a better place, and educate consumers how they are helping children
in need by providing them with a pair of shoes.
This case will discuss Mycoskie’s revolutionary business model and how it has achieved such
success. It will begin by analyzing the background and origins of the TOMS Shoes business concept.
We then discuss TOMS’ operational approach, including how the organization manages to carry out
its central mission. We also examine the corporate culture—a necessity for the successful operation
of TOMS shoes—and the marketing of TOMS. Next, we analyze how this business model has
impacted both society and other organizations. Since no business is immune from ethical issues, the
following section details some of the criticisms and risks of TOMS Shoes. We conclude by
speculating about the future of this company.
BACKGROUND AND HISTORY
Blake Mycoskie is the founder and Chief Shoe Giver of TOMS Shoes. Before founding TOMS Shoes,
Mycoskie had started five companies that ranged from billboard advertising to laundry services. His
foray into the shoe industry, however, was almost accidental. After participating in the 2002
Amazing Race reality television show, Mycoskie made a decision to return to all the countries he
had visited during the show. One country on his stop was Argentina. Mycoskie traveled to Argentina
in 2006 with no idea that the backwoods of Argentina would be his inspiration for a new
company. Two incidents inspired Mycoskie to create TOMS. First, he noticed that many of the
villagers could not even afford a pair of shoes for their children. Secondly, he discovered the
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comfortable and unique farm shoe worn by the locals (known as the Alpargata). These two
discoveries convinced Mycoskie to take action.
Upon coming back home, Mycoskie sold his online driver education company for $500,000 and
used that money to finance TOMS Shoes. TOMS was derived from “tomorrow,” which was taken
from the original company concept “shoes for tomorrow project.” TOMS Shoes opened for business
in May 2006. TOMS also runs the non-profit subsidiary, Friends of TOMS. The for-profit and non-
profit organizations work in conjunction in operating the enterprise. Since its founding, TOMS has
been widely successful among regular individuals and celebrities. Scarlett Johansson and Keira
Knightley were among the first to become celebrity fans of TOMS products. The non-profit
component is also achieving its objective of providing shoes for those in need. In 2010 TOMS Shoes
distributed its one-millionth pair of shoes.
THE IMPORTANCE OF SHOES
TOMS decided to develop its product line and business model around shoes for several key reasons.
First, many children in impoverished countries live in areas with unsafe terrains. Lack of paved
roads and other hazards can cause injury for children walking barefoot. The second reason involves
health concerns. Children can contract a range of soil-transmitted diseases from not wearing shoes.
For example, soil-transmitted Helminthiasis, an infection developed from intestinal worms, is
common in South Africa. The disease Podoconiasis is also an infection transmitted through the soil
and is common in places like southern Ethiopia. This illness causes the lymphatic system to break
down and the feet to become swollen. Another unfortunate consequence of this disease is ostracism
and ridicule imposed upon infected children in their communities. Many of these diseases can be
prevented simply by wearing shoes.
The third reason involves education. In many nations, shoes are required in order to attend school.
Owning a pair of shoes provides a child with an opportunity to be educated, leading to higher
school attendance. According to TOMS, this combination of education and health provides children
the opportunity for a better tomorrow.
TOMS MOVEMENT: MANAGEMENT AND BUSINESS MODEL
Mycoskie’s organization consists of two parts. TOMS Shoes is a for-profit company that manages the
overall operations and logistics. Friends of TOMS, the company’s non-profit subsidiary, is
responsible for organizing volunteer activities and all shoe drops. Friends of TOMS is not a
corporate-backed foundation that the company supports through donations; rather, it is a
necessary part of TOMS’ distinct business model, One for One TM. The model is simple: for every pair
of shoes that TOMS sells, it donates a pair of shoes to a child in need on behalf of the customer.
Mycoskie dubs this business system “Philanthropic Capitalism” because the company makes a
profit but incorporates philanthropy into its business strategy. The company’s ultimate vision is to
demonstrate the effect of how working together as a society can “create a better tomorrow by
taking compassionate action today.”
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The key for any organization, even nonprofits, is to be sustainable. Nonprofits that depend largely
on donations struggle to remain in operation during economic downturns. By incorporating the
nonprofit component into the business model, TOMS mitigates this risk. The One to One model
enables Friends of TOMS to remain in operation because the shoes sold cover the cost of the extra
shoes and shoe drops. When coming up with the company, Mycoskie recognized that simply
donating money to children would be a one-time deal. However, he felt that creating a sustainable
business would create continual opportunities to provide shoes for those in need as long as the
company remains in business. As long as people keep purchasing shoes, the nonprofit will remain
sustainable.
It might appear that Friends of TOMS depends entirely on the for-profit business. In reality,
however, the relationship between the two operations is interdependent. The philanthropic
component of TOMS likely contributes to its widespread popularity among consumers. One
consumer survey revealed that nearly half of respondents had purchased or would purchase items
during a certain time period if part of the revenues supported charitable causes. Cause-related
marketing is growing, and businesses like TOMS Shoes—where philanthropy is embedded within
the business model—are likely to attract the support of consumers who want to make a difference.
Already, TOMS has developed successful collaborations with recognizable brands such as Ralph
Lauren and Element Skateboard. Ralph Lauren worked with TOMS to develop a co-branded Polo
Rugby shoe, which maintained the One for One premise. Element Skateboard joined forces with
TOMS as well to fashion limited edition TOMS + Element shoes, donating a pair of shoes to a child in
need for each pair sold. To further the One for One movement, Element Skateboard also promised
that for every skateboard purchased, one would be donated to a child participating in the Indigo
Skate Camp in Durban, South America.
Finally, the TOMS Shoes business model does not support any form of traditional paid marketing or
advertising. TOMS does not have a marketing budget. Instead, the company relies on word of
mouth, viral marketing, and social networks for its marketing efforts. Word-of-mouth is one of the
most effective forms of marketing because many consumers believe it to be more trustworthy than
corporate advertisements. The challenge for organizations is how to convince customers to talk
about its products. For TOMS Shoes, many customers are excited that their purchase is going
toward a good cause and are eager to discuss it with others. TOMS Shoes has taken proactive steps
to encourage word-of-mouth communication. Each pair of TOMS Shoes comes with a blue-and-
white TOMS’ flag and a small card asking customers to take pictures of themselves wearing their
new shoes and holding up the flag. The customers are then asked to upload those photos to the
“HOW WE WEAR THEM” section on the company’s website, in addition to other social networking
websites such as Facebook and Twitter. The photos of customers using TOMS products increases
both awareness and the credibility of the brand.
TOMS’ SUPPLY CHAIN: GETTING THE SHOES WHERE THEY NEED TO BE
Due to their lack of knowledge about the shoe industry, Mycoskie and his team initially faced supply
chain management problems. Mycoskie was unaware how fast demand for TOMS shoes would
escalate. Two weeks after Mycoskie began selling his products to retailers, a fashion reporter wrote
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