Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Given this information is locational arbitrage possible

17/03/2021 Client: saad24vbs Deadline: 2 Day

CASE 12

TOMS Shoes in 2016: An Ongoing Dedication to Social Responsibility
Margaret A. Peteraf Tuck School of Business at Dartmouth

Sean Zhang and Meghan L. Cooney Research Assistants, Dartmouth College

While traveling in Argentina in 2006, Blake Mycoskie witnessed the hardships that children without shoes experienced and became committed to making a difference. Rather than focusing on charity work, Mycoskie sought to build an organization capable of sustainable, repeated giving, where children would be guaranteed shoes throughout their childhood. He established Shoes for a Better Tomorrow, better known as TOMS, as a for-profit company based on the premise of the “One for One” Pledge. For every pair of shoes TOMS sold, TOMS would donate a pair to a child in need. By mid-2016, TOMS had given way over 50 million pairs of shoes in over 70 different countries. 1

As a relatively new and privately held company, TOMS experienced consistent and rapid growth despite the global recession that began in 2009. By 2015, TOMS had matured into an organization with nearly 500 employees and almost $400 million in revenues. TOMS shoes could be found in several major retail stores such as Nordstrom, Bloomingdale’s, and Urban Outfitters. In addition to providing shoes for underprivileged children, TOMS also expanded its mission to include restoring vision to those with curable sight-related illnesses by developing a new line of eyewear products. For an overview of how quickly TOMS expanded in its first seven years of business, see Exhibit 1 . 2

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

Total Employees

470

450

400

320

250

72

46

33

19

4

Thousands of Pairs of Shoes Sold

25,000

10,000

7,250

2,700

1,300

1,000

230

110

50

10

EXHIBIT 1

TOMS’ Growth in Employees and Sales, 2006–2015

Source: PrivCo, Private Company Financial Report, “TOMS Shoes, Inc.,” created April 18, 2016.

Company Background
While attending Southern Methodist University, Blake Mycoskie founded the first of his six startups, a laundry service company that encompassed seven colleges and staffed over 40 employees. Four startups and a short stint on The Amazing Race later, Mycoskie found himself vacationing in Argentina where he not only learned about the alpargata shoe originally used by local peasants in the 14th century, but also witnessed the extreme poverty in rural Argentina.

Determined to make a difference, Mycoskie believed that providing shoes could more directly impact the children in these rural communities than delivering medicine or food. Aside from protecting children’s feet from infections, parasites, and diseases, shoes were often required for a complete school uniform. In addition, research had shown that shoes were found to significantly increase children’s self-confidence, help them develop into more active community members, and lead them to stay in school. Thus, by ensuring access to shoes, Mycoskie could effectively increase children’s access to education and foster community activism, raising the overall standard of living for people living in poor Argentinian rural areas.

Dedicated to his mission, Mycoskie purchased 250 pairs of alpargatas and returned home to Los Angeles, where he subsequently founded TOMS Shoes. He built the company on the promise of “One for One,” donating a pair of shoes for every pair sold. With an initial investment of $300,000, Mycoskie’s business concept of social entrepreneurship was simple: sell both the shoe and the story behind it. Building on a simple slogan that effectively communicated his goal, Mycoskie championed his personal experiences passionately and established deep and lasting relationships with customers.

Operating from his apartment with three interns he found on Craigslist, Mycoskie quickly sold out his initial inventory and expanded considerably, selling 10,000 pairs of shoes by the end of his first year. With family and friends, Mycoskie ventured back to Argentina, where they hand-delivered 10,000 pairs of shoes to children in need. Because he followed through on his mission statement, Mycoskie was able to subsequently attract investors to support his unique business model and expand his venture significantly.

When TOMS was founded, TOMS operated as the for-profit financial arm while a separate entity titled “Friends of TOMS” focused on charity work and giving. After 2011, operations at Friends of TOMS were absorbed into TOMS’s own operations as TOMS itself matured. In Friends of TOMS’s latest accessible 2011 501(c)(3) filing, assets were reported at less than $130,000. 3 Moreover, as of May 2013, the Friends of TOMS website was discontinued while TOMS also ceased advertising its partnership with Friends of TOMS in marketing campaigns and on its corporate website. The developments suggested that Friends of TOMS became a defunct entity as TOMS incorporated all of its operations under the overarching TOMS brand.

Industry Background
Even though Mycoskie’s vision for his company was a unique one, vying for a position in global footwear manufacturing was a risky and difficult venture. The industry was both stable and mature—one in which large and small companies competed on the basis of price, quality, and service. Competitive pressures came from foreign as well as domestic companies and new entrants needed to fight for access to downstream retailers.

Further, the cost of supplies was forecast to increase between 2013 and 2020. Materials and wages constituted over 70 percent of industry costs—clearly a sizable concern for competitors. Supply purchases included leather, rubber, plastic compounds, foam, nylon, canvas, laces, and so on. While the price of leather rose steadily each year, the price of rubber also began to climb at an average annual rate of 7.6 percent. Wages were expected to increase at a rate of 5.8 percent over a five-year period due to growing awareness of how manufacturers took advantage of cheap, outsourced labor. 4

In order to thrive in the footwear manufacturing industry, firms needed to differentiate their products in a meaningful way. Selling good-quality products at a reasonable price was rarely enough; they needed to target a niche market that desired a certain image. Product innovation and advertising campaigns therefore became the most successful competitive weapons. For example, Clarks adopted a sophisticated design, appealing to a wealthier, more mature customer base. Nike, adidas, and Skechers developed athletic footwear and aggressively marketed their brands to reflect that image. Achieving economies of scale, increasing technical efficiency, and developing a cost-effective distribution system were also essential elements for success.

Despite the presence of established incumbents, global footwear manufacturing was an attractive industry to potential entrants based on the prediction of increased demand and therefore sales revenue. Moreover, the industry offered incumbents one of the highest profit margins in the fashion industry. But because competitors were likely to open new locations and expand their brands in order to discourage competition, new companies’ only option was to attempt to undercut them on cost. Acquiring capital equipment and machinery to manufacture footwear on a large scale was expensive. Moreover, potential entrants also needed to launch costly large-scale marketing campaigns to promote brand awareness. Thus, successful incumbents were traditionally able to maintain an overwhelming portion of the market.

Building the TOMS Brand
Due to its humble beginnings, TOMS struggled to gain a foothold in the footwear industry. While companies like Nike had utilized high-profile athletes like Michael Jordan and Tiger Woods to establish brand recognition, TOMS had relatively limited financial resources and tried to appeal to a more socially conscious consumer. Luckily, potential buyers enjoyed a rise in disposable income over time as the economy recovered from the recession. As a result, demand for high-quality footwear increased for affluent shoppers, accompanied by a desire to act (and be seen acting) charitably and responsibly.

While walking through the airport one day, Mycoskie encountered a girl wearing TOMS shoes. Mycoskie recounts:

· I asked her about her shoes, and she went on to tell me this amazing story about TOMS and the model that it uses and my personal story. I realized the importance of having a story today is what really separates companies. People don’t just wear our shoes, they tell our story. That’s one of my favorite lessons that I learned early on.

Moving forward, TOMS focused more on selling the story behind the shoe rather than product features or celebrity endorsements. Moreover, rather than relying primarily on mainstream advertising, TOMS emphasized a grassroots approach using social media and word of mouth. With over 3.5 million Facebook “likes” and over 2 million Twitter “followers” in 2016, TOMS’s social media presence eclipsed that of its much larger rivals, Skechers and Clarks. Based on 2016 data, TOMS had fewer “followers” than Nike, and fewer “likes” than both Nike and adidas. However, TOMS had more “followers” and “likes” per dollar of revenue. So when taking company size into account, TOMS also had a greater media presence than the industry’s leading competitors (see Exhibit 2 for more information).

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Assignment Guru
Phd Writer
Quick Finance Master
Assignment Helper
Study Master
Finance Homework Help
Writer Writer Name Offer Chat
Assignment Guru

ONLINE

Assignment Guru

You can award me any time as I am ready to start your project curiously. Waiting for your positive response. Thank you!

$43 Chat With Writer
Phd Writer

ONLINE

Phd Writer

I have read and understood all your initial requirements, and I am very professional in this task.

$96 Chat With Writer
Quick Finance Master

ONLINE

Quick Finance Master

I will cover all the points which you have mentioned in your project details.

$40 Chat With Writer
Assignment Helper

ONLINE

Assignment Helper

Give me a chance, i will do this with my best efforts

$99 Chat With Writer
Study Master

ONLINE

Study Master

I have read and understood all your initial requirements, and I am very professional in this task.

$81 Chat With Writer
Finance Homework Help

ONLINE

Finance Homework Help

Give me a chance, i will do this with my best efforts

$29 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Dulux solvent based primer - Community Colleges as a Catalyst for Social Change - Monthly progress report for students - Kyl international pl kenmore - Physics, Le - The inner game of trading pdf - Netafim arkal disc filter - The most frequent motive for direct infanticide reported cross-culturally is that the infant is - Heinrich domino - Trader joe's organizational chart - Benchmark - Research Review (Obj. 8.1 and 8.2) - Dance mat touch typing - Prepare an incremental analysis for the special order - A motor scooter travels east at a speed - Escience answers - Cloud Computing - Peer response - Module 04 Lab 02 - Bioremediation of Oil Spills - Deta 6193b wiring diagram - When are analytical procedures required during an audit - Assignment - No visible cytoplasmic granules are present in - An inspector calls goole - When did kfc change its name - First and second stop micropipette - Pride and prejudice introduction paragraph - What approaches could have yielded additional valuable information - Case Study - What is the golden ratio to three decimal places - How many passenger capsules are there on the london eye - Careys new homes high wycombe - What is an inference - Quantum dot display ppt - My it lab excel answers - Myob termination code 1203 - Icn code of ethics for nurses ppt - Where do the dunphys live - No speak english sandra cisneros pdf - Jack carter pool rules - What pricing strategy does bentley motors use - Wps prenhall com educational research - Lightweight vs heavyweight project management - Discussion writing - Turn in Reader Response Essay - What does kincaid compare and contrast in this essay - Discussion assignment - State evidence for brownian motion - Df 500 dit oven - Web technologies a computer science perspective - Y ln x graph - Technical Writing in Criminal Justice (3) - Social media swot analysis of nike - Samsung powerbot r7070 bed bath and beyond - Ozark sports sells hunting and fishing equipment - Where is the taiga located - Sterling 10 alarm control panel - Nursing change agent paper - Cyber domain parts - Belcon cleaning supplies seaford - Pine brush rest area - International marketing and export management 7th edition pdf - Rcl import local charges - Marketshare simulation - In the cemetery where al jolson is buried sparknotes - A beautiful mind video questions answers - Constructivist approach to teaching ppt - Comp xm exam excel spreadsheet - Rain in jiangnan erhu sheet music - Sound activated led circuit - Simon death scene lord of the flies - The barn owl gwen harwood - Algebraic simplification of digital logic gates - Lab 6 pressure temperature and volume of gases - Exceptional circumstances sussex uni - Apple market entry strategy in india - Implementing diversity policies and procedures - Bcp drp bia - Suppose honda's total cost of producing - Walmart work ethics - Where does santa claus live - Nanda nursing diagnosis for hyponatremia - Composite restorations in anterior teeth fundamentals and possibilities - GENERAL CHEMISTRY 104: EVALUATING THE EQUILIBRIUM CONSTANT FOR THE REACTION OF IRON (III) ION WITH THIOCYANATE ION - What does the river symbolize in fahrenheit 451 - Homework c9 2 recall 1 - Glo bus quiz one answers - Flash bang wallop karaoke - Calcium carbonate and nitric acid net ionic equation - Paris street rainy day demonstrates - Fiu book advance refund - Sodium hypochlorite and hydrochloric acid balanced equation - Wells fargo teamworks fmla form - Person environment occupation model - Qualitative Research - What is walt disney's mission statement - Global agriculture towards 2050 - Describe and discuss SAN,NAN and cloud-based data storage works (3-4) - How to make a histogram in spss - Strategies for competing in international markets chapter 7 - What is an enterpreneur