CASE 4.2 TOMS\'s One-for-One Business Model: Is it Sustainable for the Future? W

Question

CASE 4.2 TOMS's One-for-One Business Model: Is it Sustainable for the Future? Web: www.toms.com Facebook: TOMS Twittor: eTOMS was added in 2014. For every bag of coffee that's sold TOMS donates an equivalent amount of money to pro- vide clean water and sanitation for people who need it 2005 Blake Mycoskie, a serial entrepreneur, needed break. After starting 5 companies in 12 years, he trav-the most eied to Argentina looking for some time to relax. He some expatriates who were doing social work in on the outskirts of Buenos Aires and asked if he d tag along. In one village in particular, he noticed TOMS is known for pioneering the on·to-one business most of the children didn't have shoes. He stopped model. A firm's business model is a plan or recipe for how it creates, captures, and delivers value to ins stake- holders. TOMS's business model is unique in that it combines the goals of a for-profit company with the am- bitions of a philanthropic organization. TOMSs business model template is shown nearby. The following brief overview of each of the major sections of the business few of the kids to look at their feet and saw cuts, and infections. He knew the vil lagers were and couldn't afford to buy their children shoes wondered what he could do to help. He also knew was an inexpensive shoe in Argentina called the What would be the best way to provide poor Mycoskie thought about starting a charity but felt charity model wouldn't work. He envisioned himself would contribute once, or twice, or maybe even he needed was an approach that would sustain Core Strategy his family and friends for contributions, and knew TOMS's mission is "One for One" The mission is made possible by the way TOMS is structured. TOMS has two parts. TOMS is a for-proft company that manages the overall operations and logistics. Friends of TOMS is a nonprofit organization that assembles velunteers, deliv- times. But it would be hard to continue to ask. by selling a product that people needed to buy y. The approach Mycoskie came up with he later one for one." He would create a for-profit it busi- ers the shoes, and coordinates the eyewear/site restora- shoes tion and coffee/clean water initatives to sell alpargata shoes, and for every pair sold he'd An important decision Mycoskie and his team made early on, when TOMS was strictly a shoe company, was that the oost of providing shoes to children in need wouid be built into the shoes' selling price. The same approach a pair to a child in need Mycoskie returned to the United States and set shop in Santa Monica, California. He started TOMS no shoe industry experience. The company was called Shoes for Tomorrow but was quickly now applies to eyewear and coffee. As a result, as long to TOMS. To get started, Mycoskle went from as TOMS sells its products, it can fulris its philanthropic mission. It does not need to rely on donations, as most retail store to another with his unique business idea few Los Angeles boutiques agreed to sel the shoes. charities and nonprofits do, to sustain itself first break came when the Los Angeles Times ran an about his business. To Mycoskie's surprise, the spurred $88,000 in orders in a single weekend. TOMS's strategy is built on selling practical prod- ucts. Shoes, eyewear, and coffee are products that are sold widely. Its shoes are pricey ($54 to $80 for a pai Fast forward to today. TOMS is now an international of simple slip-ons), but people know that when they It's one for one model has been expanded to e shoes, eyewear, and coffee. As of mid-2014, S had given away 10 million pairs of shoes in 60 buy TOMS shoes they are paying for a pair that will be donated to a child in need. TOMS reles heavily on vol- unteers, interns, and partners to do much of its work Many of the people who volunteer and work with TOMS had helped restore sight for 200,000 people 13 countries, and is providing clean water and sanita are motivated by the company's mission, which changes ives. In some countries, shoes are required in order to attend school. Owning a pair of shoes provides a child a chance to be educated and to have a better life. TOMS s not reluctant to share these types of realities, which deeply resonate with volunteers and customers. TOMS has almost as many intems, for example, working in its facilities as employees. Friends of TOMS works with non- profits and NGOs to distribute its products. It does this to villagers in 5 countries. The one-to-one model been tweaked some, but the intention the same. OMS still gives away pair of shoes for ever pair it Eyewear was added in 2011. Rather than donat- a pair of glasses for every pair its sells, TOMS do- an equivalent amount of money that is used for -saving measures, such as eye surgery, medical t, or a new pair of prescription glasses. Coffee

Explanation / Answer

4.38) TOMS target market are those customers who resonates with TOMS one-for-one approach and the company's combined for profit/philanthropic persona. These customers are those customers who are not price sensitive and would be ready to pay some extra amount for being associated with a social cause.

On analyzing the case, we can say that this target market is not expected to change in the near future as the approach towards the entire initiative is sustainable in itself. The only reason behind expecting a change in target market market would be because of the fact that the customers no longer feel associated with the noble cause through purchase of TOMS products. When a branding of product changes, the target market also changes. Thus, a PR debacle or self instigated change in branding can cause a change in target market.

4.40) The key assets outlined in the case are-

On properly analyzing the sustainability quotient of all the assets, we can conclude-

Please provide your reviews in comments. :-)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.