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1. One for One
One person buys. One person is helped.
Group 3
M.M. Binte
Min Jin Jeon
Kye won Suh
June Young Ahn
KSIM
KAIST Business School
Strategic Management Summer Semester 2011

3. C ONTENTS
 Company Overview
 Business Model
 Current Strategy
 Strategic Analysis
 Issues
 Root Cause Analysis
 Recommendations
Strategic Management 2 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

4. C OMPANY O VERVIEW
Company  American footwear company based out of Santa Monica, California
 Created by Blake Mycoskie in 2006 after traveling to
Business Argentina and realizing that the children have no shoes
Strategy  As of September 2010, TOMS has given over 1 million pairs
of new shoes to children in need
Analysis  Extended product-line to eyewear in 2011
Issues
Causes
Recommend.
Strategic Management 3 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

5. B USINESS M ODEL
Company  One for OneTM
 One person buys. One person helped.
Business  TOMS SHOES: With every pair you purchase , TOMS will give a new
pair of shoes to a child in need.
Strategy  TOMS EYEWEAR: With every pair you purchase , TOMS will give sight
to a person in need. (Give prescribed eyeglasses)
Analysis
 Creating sustainable business by turning customers into
Issues benefactors rather than depending on fundraising support
 Viral Marketing with touching stories
Causes
Recommend. Purchasing
(Fundraising)
Help Persons
With Volunteers
Products Persons
Customers who need
Satisfaction Touching Stories
help
Word of Mouth
Marketing
Strategic Management 4 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

6. C URRENT S TRATEGY
Company  Limitation of One for One BM
 Profit margin for Shoe Business
Business  Sales: 300,000 units * avg price $60 = $18 million
 Gross margin = 50% / Revenue for SG&A and tax = 30%
Strategy  Net Profit = $4 million
 Manufacture and donation costs close to $4 million
Analysis
 TOMS Eyewear – The new one for one
Issues  It might have same profit margin as Shoe
 Overcome Negative Profitability
Causes  Sale for other items such as apparel and stickers
 Generate an additional revenue stream for the company
Recommend.
 Partners with Non-profit organization
 Shoe Drop Tour volunteer opportunities
 Aligns with other brands
 With Ralph Lauren Rugby to distribute one shoe model
Strategic Management
 AT&T “More Bars In More Places” campaign 5 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

7. C URRENT S TRATEGY
Company  Word of Mouth Effect
 No traditional advertising
Business  Utilize SNS
 Movie clip Including touch stories and playful music
Strategy
 To explain TOMS’s social mission & To encourage you to get involve
Analysis  Share donation activities through SNS
 337 bookmark or sharing services including Facebook, twitter
Issues
Causes
Recommend.
Strategic Management 6 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

8. C URRENT S TRATEGY
Company  Customer Participation
 Style Your Sole
Business  Select a date for your event that works for your guests
 Promoting and collect money from your guests including shipping costs
Strategy  Need to place your bulk order NO LATER than 2 weeks
 Order all plain white canvas TOMS (the easiest to decorate and customize)
 Invite local bands or artists to join your event
Analysis
Issues
Causes
 For one day without shoes
Recommend.  Host event or find & participate in event
 Upload pictures wearing Toms or without shoes
Strategic Management 7 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

9. F IVE F ORCES A NALYSIS
Company
Threats of New
Business Entrants
LOW
Strategy
Analysis
Bargaining Bargaining
Issues Power of Competitive Power of
Suppliers Rivalry Customers
Causes LOW HIGH HIGH
Converse, Birkenstock, Roc
China, Argentina ket Dog, UGGS, Vans
Recommend.
Threat of
Substitute
HIGH
Strategic Management 8 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

10. SWOT A NALYSIS
Company
Business Strengths: Weaknesses:
• The message • Young Company
Internal
• Product material • Limited distribution
Strategy • Customizability • Brand awareness
• Global Brand • Limited Style
Analysis • Innovative Options • Very defined target customer
(Vegan, wrap boot)
Issues
Opportunities: Threats:
Causes • Large potential market • Older and more established
• More people becoming competition with greater
External
Recommend. active in social causes media exposure
• Rise in green marketing • Oversaturation of shoe market
• Nontraditional • Overall lack of advertising
stance(facebook, twitter,
YouTube) in media
Strategic Management 9 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

11. I SSUES
Company  From Five-Forces and SWOT Analysis
 Unisex Designs
Business  Preferred by women and kids, not men
 Unreasonable Price
Strategy  Compared to material’s quality and Product Life Cycle - Expensive
Analysis  Low Brand awareness
 No traditional mass marketing
Issues  Limited distribution channel
 Few offline shops in US & globally online sale
Causes  Defined target customer
 Targeting only young generation
Recommend.
 Others
 Controversial cognition
 Poverty vs. Dignity
 An angel? or A wolf in sheep´s clothing?
Strategic Management 10 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

12. R OOT C AUSE A NALYSIS
Company ISSUES Root Causes Recommendations
Designs Many Designs cost
(Men’s shoe)
Business much Low cost design
Five-forces & SWOT Analysis
Price
Strategy (compared to the quality Low profit margin
of the materials and life (because of charity cost)
cycle of the product -
Analysis expensive) Various product-line
Low-price strategy to many fashion items
Brand awareness
Issues (low)
Distribution Only on-line channel
Causes channel (limited)
Increase
Brand Awareness
Recommend. Target customer
(very defined) No mass marketing
Controversial
Others
Keep
cognition Business Model its Business Model
(poverty vs. dignity)
Strategic Management 11 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

13. R ECOMMENDATIONS
Company  Make various product design!
 Develop plans how to make design without cost
Business  Examples about getting low cost design
 Fashion Design Contest
Strategy  Online – SNS, Offline - Fashion design school
 Star Donation
Analysis
 Fund Raising, Designed by Stars, Utilization as a model etc
Issues
Best Design Prize Money
Causes
Recommend.
Winner gives
the low cost
but
best design
Strategic Management 12 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

14. R ECOMMENDATIONS
Company  Change brand position as a charity brand!
 From shoes manufacturing to fashion, charity brand
Business  New One for One - Make various product lines
 Example – School Project
Strategy
School Bag Get much profit
Analysis Bag pack`s price is more expensive than shoes
Good product to make collection
Issues Student’s Fashionable item
Develop school supplies as well
Causes
 Example – Disease Project
Recommend. Disease Get much profit
High demand - household items
Soap, Toothpaste, hand washer etc
Prevention is better than cure
Reduce the possibility of getting disease
Strategic Management 13 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

15. R ECOMMENDATIONS
Company  Promote Toms brand & business!
 Must increase Brand awareness
Business  Awareness of TOMS Shoe company research by The Clemetine group
 Focus Group interview, March 2010 (Most respondents living in US)
Strategy
Analysis It means
Marketing efforts are incredibly ineffective!
Issues
 Utilize traditional mass media
Causes  Keep strategy not to make commercials
 Instead of Ads, Open big global event for interview and report
Recommend.  Example – World travel relay without shoes
 Partnership with Unesco & Unicef
 Unesco – Open workcamp making shoes for volunteers
 Unicef – Utilize Unicef shop & honorary ambassadors
Strategic Management 14 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

16. R ECOMMENDATIONS
Company  Give customer price options!
 Keep original business model - One for One
Business
 Partially add “Two for Two” model
Strategy  Target – someone to want to buy different color or give gift to another
 ‘One for One’ recently 49$ → ‘One for Two’ about 90$ (cheaper)
Analysis
 Partially add “One for Two” or “One for Three”
Issues  Target – someone to want to donate more through toms
 ‘One for One’ recently 49$ → ‘One for Two’ about 70$ (cheaper)
Causes  Record customers name in the hall of fame
Recommend. Increase sale volume & Reduce shipping cost
Discount Benefit to regular customers
Establish donation culture though Toms
Strategic Management 15 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School

17. Thank you