About Toms company and its social contribution and its background, non-profit company based in Los Angeles . Company designs markets shoes as well as eyewear, coffee apparel handbags. Founded in 2006, founders are Blake Mycoskie and Alejo Nitti. Number of Employees are 500.
About Toms company and its social contribution and its background, non-profit company based in Los Angeles . Company designs markets shoes as well as eyewear, coffee apparel handbags. Founded in 2006, founders are Blake Mycoskie and Alejo Nitti. Number of Employees are 500.
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Case 4.2 TOMS’ One-for-One Business Model Is it Sustainable for t.docxzebadiahsummers
Case 4.2 TOMS’ One-for-One Business Model: Is it Sustainable for the Future?
• Web: www.toms.com • Facebook: TOMS • Twitter: @TOMS
Bruce R. Barringer, Oklahoma State University
R. Duane Ireland, Texas A&M University
Introduction
In 2005, Blake Mycoskie, a serial entrepreneur, needed a break. After starting 5 companies in 12 years, he traveled to Argentina looking for some time to relax. He met some expatriates who were doing social work in villages on the outskirts of Buenos Aires and asked if he could tag along. In one village in particular, he noticed that most of the children didn’t have shoes. He stopped a few of the kids to look at their feet and saw cuts, abrasions, and infections. He knew the villagers were poor and couldn’t afford to buy their children shoes and wondered what he could do to help. He also knew there was an inexpensive shoe in Argentina called the alpargata. What would be the best way to provide poor Argentinean children alpargata shoes?
Mycoskie thought about starting a charity but felt the charity model wouldn’t work. He envisioned himself asking his family and friends for contributions, and knew they would contribute once, or twice, or maybe even several times. But it would be hard to continue to ask. What he needed was an approach that would sustain itself by selling a product that people needed to buy anyway. The approach Mycoskie came up with he later dubbed “one-for-one.” He would create a for-profit business to sell alpargata shoes, and for every pair sold he’d donate a pair to a child in need.
Mycoskie returned to the United States and set up shop in Santa Monica, California. He started TOMS with no shoe industry experience. The company was originally called Shoes for Tomorrow but was quickly shortened to TOMS. To get started, Mycoskie went from one retail store to another with his unique business idea. A few Los Angeles boutiques agreed to sell the shoes. His first break came when the Los Angeles Times ran an article about his business. To Mycoskie’s surprise, the article spurred $88,000 in orders in a single weekend.
Fast forward to today. TOMS is now an international brand. Its one-for-one model has been expanded to include shoes, eyewear, coffee, and bags. As of early 2017, TOMS had given away 60 million pairs of shoes in 75 countries, had helped restore sight for 400,000 people in 13 countries, and has helped provide over 335,000 weeks of safe water in 6 countries. The one-to-one model has been tweaked some, but the intention is the same. TOMS still gives away a pair of shoes for every pair it sells. Eyewear was added in 2011. Rather than donating a pair of glasses for every pair its sells, TOMS donates an equivalent amount of money that is used for sight-saving measures, such as eye surgery, medical treatment, or a new pair of prescription glasses. Coffee was added in 2014, under the “TOMS Roasting Company” brand. For every bag of coffee that’s sold, TOMS Roasting Company works with its Giving Partners to.
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2. WHAT IS POVERTY
• Is the general scarcity, or the state of
one who lacks a certain amount of
material possessions of money
• Includes social, economic, and political
elements
• Could refer to lack of means necessary
to meet basic needs such as food,
clothing and shelter
3. BLAKE MYCOSKIE
• Born August 26, 1976
• Entrepreneur, Author and philanthropist
• Founder of the for-profit company, TOMS shoes
• Attended Southern Methodist University on
tennis scholarship in 1995, and elected a dual
major in philosophy and business
4. TOMS SHOES
• Started in 2006 after Mycoskie visited Argentina
on vacation
• Met an American woman who was part of a
volunteer organization which provided shoes
for children in need
• Spent many days travelling from village to
village with the group
5. TOMS SHOES
• Mycoskie noticed that many children were
lacking shoes
• Later learnt that lacking shoes is a major
problem that impacts the youth in
underdeveloped nations
• Threatened the ability of children to go to
school and exposes them to risk of infection
• Inspired the founding of his company, TOMS
shoes
6. IMPACT OF TOMS SHOES
• In a controlled trial in El Salvador, 95% of
children there liked the shoes
• 77% of the children wore those shoes at least 3
days a week, and the most common response
by children was wearing them every day
7. CHALLENGES FACED
• Funding- he had to sell his online driver
education company for $500,000 to fund his
shoe company
• Needed to sell part of his stake in TOMS shoes
to keep his business of providing needy
children with essential items, up and running.
8. LEARNING POINTS
• We all have the power to improve the wellbeing
of others
• Simple acts such as buying a pair of shoes can
completely change someone’s life
• It’s the responsibility of blessed people to help
those lower on the social ladder, so as to make
those lives more meaningful