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Environmental Scan- Toms Shoes

In: Business and Management

Submitted By kimberlybarron
Words 2224
Pages 9
Environmental Scan- Project #1
TOMS Shoes: The One for One Project
Kimberly L. Barron
Marketing 314
September 17, 2012

“I was so overwhelmed by the spirit of the South American people, especially those who had so little. And I was instantly stuck with the desire- the responsibility- to do more.” (TOMS Shoes. 2012) These are the words of Blake Mycoskie, founder and Chief Shoe Giver of TOMS Shoes on his inspiration for a business that has taken consumers from all different parts of the world by storm and brought them together to help shape the future of an uncountable amount of children. The One for One Project was established to give every consumer the opportunity to help some of our most poverty-stricken communities throughout the world. With each pair of TOMS that is purchased, the company promises to give a child in need a brand new pair of shoes. After participating in the 2002 series of the hit reality TV show, The Amazing Race, Mycoskie decided to go back and revisit each country he had been in while on the show, one of those stops being Argentina. When he completed his graduate studies at Southern Methodist University and returned to Argentina in 2006, he was confronted firsthand with the conditions that members of these communities were living in; communities in such poverty that villagers could not even afford shoes for their children. He saw many non-profit organizations working so hard to help these children, but noticed many flaws in their heartfelt efforts. Mycoskie soon after discovered a shoe worn by most locals known as the Alpargata: a unique and comfortable farm shoe. Mycoskie returned to the United States with 200 pairs of these Argentinean shoes and a very unusual business model in mind that would be more successful than he could have been prepared for. This was the inspiration behind starting a company that has now given out over a million pairs of shoes to needy children in 44 countries throughout the world, and plans to continue this venture as long as customers are supporting such a great cause (Spaulding, Fernandez, and Sawayda. 2011).

Social Environment
TOMS Shoes main commitment is “to create the biggest impact possible with the shoes [they] give- improving children’s health and access to education - for the long-term.” (TOMS Shoes. 2012). This company modeled their business plan and product line around three key interest that combine health and education to provide children in need with hope for a better tomorrow: 1.) unpaved roads and other hazards cause injury to children walking barefoot in the unsafe terrains of these impoverished countries, 2.) a range of soil-transmitted diseases, such as Helminthiasis, can be prevented simply by wearing shoes, 3.) many nations require that all children wear shoes in order to be able to attend school. TOMS Shoes has made it their mission to provide these children with a pair of shoes to ensure that they are not only healthy but also given the chance to achieve a better education, in hopes that they will then be able to, in return, help their communities (Spaulding, Fernandez, and Sawayda. 2011). As much as TOMS Shoes has done for children all over the world, it would all be impossible without the help of their Giving Partners and the company’s non-profit subsidiary, Friends of TOMS. TOMS Shoes establishes “shoe-giving partnerships with humanitarian organizations worldwide that have a deep experience and long-term presence in the countries and communities they serve.” Organizations work with TOMS Shoes to; find communities in need of shoes, ensure that children are given shoes that will fit and protect their feet, provide assistance so children are given the opportunity to stay healthy and in school, keep these children in shoes throughout their whole childhood, and help the company improve to allow them the chance to continue giving these poverty-stricken communities hope. College Students all over the world have also taken action to help raise awareness of the amount of children going without something many of us take for granted, a simple pair of shoes. The enthusiasm of thousands of college students everywhere is responsible for getting ‘One Day Without Shoes’ kicked off for the first time in 2008. This is a day in April that this amazing company asks that citizens all over go without shoes to help make people aware of the impact giving a pair of shoes to a child in need can have on his or her entire life. The movement has now gone far beyond just college campuses participating and by the third year had over a quarter million people of all ages going barefoot and celebrating this special day in over 1600 barefoot events globally (TOMS Shoes. 2012).
Economic Environment
With $500,000 of his own money, Mycoskie began to put his plan into action. He set out to find retail stores that would give his unique business proposal a chance. When a few local boutiques in Los Angeles agreed to sell the shoes, his story was picked up by the Los Angeles Times and that weekend alone he had $88,000 in orders come through and business has thrived ever since. After only two years of being in business, the company had made 9.6 million in revenue. TOMS Shoes is not your typical organization; it consists of two parts that must interdependently work together to achieve the company’s mission: TOMS Shoes is the for-profit part of the company that manages the overall operation and logistics while Friends of TOMS is a non-profit subsidiary that organizes the many ‘shoe drops’ that happen all over the world, where volunteers personally place shoes on the feet of children in need, and all other volunteer activities. Mycoskie has named his unique business model as “Philanthropic Capitalism”, due to the company’s ability to incorporate philanthropy into a business that still turns a profit. When deciding how his business plan was going to work out, Mycoskie kept in mind that donating money to these children would be a one-time deal that could only do so much and last so long for these children. He wanted to create an organization that would be able to repeatedly give help to needy children and inspire others to contribute as well. Mycoskie says, “Ultimately, I am trying to create something that’s going to be here long after I am gone.” The cost to make the donated shoes are worked into the cost of each pair that consumers purchase, in turn allowing someone in Texas, the chance to help a child they normally would be not be able to in a country on the other side of the world. The shoes, decently priced from $44- $70, are an ultimate feel-good purchase for every consumer out there and has even inspired celebrities and other successful name brands to collaborate with and extend the famous One for One Project to brands such as Ralph Lauren and Element Shoes. Over 500 well- known retailers around the world, including Nordstrom’s, Neiman Marcus, Urban Outfitters, Whole Foods, and Bloomingdale’s, as well as many small independently owned businesses now carry TOMS shoe collection. The organization has also begun to partner with non-profit health organizations such as Partners in Health and SANA Guatemala to ensure that these children are given the necessary health assistance (Spaulding, Fernandez, and Sawayda. 2011). This incredible company has also proven to not be affected by the recession. With the majority of consumers closely watching exactly where every penny of their money is going these days, consumers are happy to purchase these shoes knowing that not only are they personally getting a great pair of shoes for a decent price, but they are also giving to a child out there who otherwise may not have had access to such a huge necessity. While it’s necessary right now for most companies to downsize and cut back in the areas where they can, TOMS Shoes is hiring and making plans for the future to continue expanding and growing (Hardy, Rohn, and Waitley. 2012).
Technological Environment
TOMS Shoes has made it possible for consumers all over the world to contribute to a fantastic cause simply by expanding their sales to the web. It is possible for people who may not have access to a local department store that carries the shoe line to still participate and make the same donation as those who do have the access to stores currently carrying them. Like most modern businesses, TOMS has taken their movement to social media websites such as Face Book, Twitter, You-Tube, and their company blog to help raise awareness and inform people of the cause they have modeled their entire business around. Because TOMS Shoes does not take the traditional approach to marketing their product and remain heavily on the enthusiastic supporters ‘word- of-mouth’, it is important that TOMS stay connected and active in the social media world to continue expanding their company and raising awareness (Ferenstein. 2010).
Competitive Environment
In 2010, Skechers Cali launched a similar line of shoes they call ‘Bobs’. Skechers has paired with a non-profit organization called Soles4Souls that donates two pairs of shoes with every purchase of Bobs. While these shoes are similar in style and purpose, Bobs have not quite had the amount of success that TOMS has had. They do offer a variety of styles and colors but they have limited themselves to only the women and children buyer markets and have done minimal advertising or promotional activities to establish a name for their product. BOBS has not established a retail store or online presence other than being available at other retailers such as DSW and Sears, and online at sites such as, Zappos.com and Amazon.com. While both companies were created with the right concept in mind, to help those around the world who need it most, TOMS has put together a much more effective business plan that will allow their company to survive and continue to grow while in my opinion, BOBS will eventually fade out. Many consumers have referred to the brand as “knock off TOMS” which, I believe, will have a negative effect on the brand and their hopes to do good for children all around the world (Ahsman. 2011).

Regulatory Environment
As with most products, there are consumers who support it to its fullest and those who simply do not. TOMS Shoes is no exception. There are many people out there who totally disagree with the actions of the organization and, believes that in the long-run, they are doing more harm than good. Some would say TOMS Shoes business concept relates back to the old proverb, “it’s better to teach a man to fish than catch him a fish to eat.” Those who do not support the efforts of TOMS Shoes believe that they are instead making poverty-stricken communities dependent on the organization and taking away from the local economy. While those against the organization argue that although the idea behind their business model is a great marketing campaign, it does address or solve the root causes behind these poverty-stricken communities, I believe this is a great start to ensuring that these communities are on the right track for growth. Yes, it may not solve the root cause but it gives the future of those communities, the children, a better chance of being healthy and obtaining a good education to, in return, give back to their communities in ways that will be most beneficial (Cheeseman. 2012).
Conclusion
“When a consumer interacts with the TOMS brand, it is more than just buying shoes. It is helping a young child in need, and what you feel after you have done so.” (Ahsman. 2011) I couldn’t agree with this statement more. In my opinion, TOMS Shoes has set on a charitable mission that is one of the greatest and most successful in a long time. They have found a way to provide citizens with jobs in a profitable company while also giving to over 44 countries around the world that need help the most. Mycoskie could not have chosen a better approach to giving back to the world. “Next time you hear “TOMS” don’t just think of the shoes they sell, think of the lifestyle they represent.” (Ahsman. 2011)
Works Cited
Averi Ahsmann. Wordpress.com. 2011. Web. September 18, 2012. http://averima.files.wordpress.com/2011/09/toms-pr-plansbook.pdf Darren Hardy, Jim Rohn, and Denis Waitley. Success.com. 2012. Web. September 18, 2012. http://www.success.com/articles/852-the-business-of-giving-toms-shoes
Gina-Marie Cheeseman. Triplepundit.com. 2012. Web. September 18, 2012. http://www.triplepundit.com/2012/04/problem-charity-model-toms-shoes/
Gregory Ferenstein. Fastcompany.com. 2010. Web. September 18, 2012. http://www.fastcompany.com/1658289/toms-shoes-generation-y-strategy
Stephanie Fernandez, Jennifer Sawayda, and Alicja Spaulding. Danielsethics.mgt.un.edu. Daniels Fund Ethics Initiative. 2011. Web. September 18, 2012. http://danielsethics.mgt.unm.edu/pdf/TOMS%20Case.pdf
Toms.com. 2012. Web. September 18, 2012. http://www.toms.com/corporate-info Toms.com. 2012.Web. September 18, 2012 http://www.toms.com/how-we-give Victoria Ma. 2012. Blogspot.com. Web. September 18, 2012
http://vima29.blogspot.com/2011/02/week-1-history-mission-statement.html

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