TOMS Puts Its Right Foot Forward Mini Case Questions read the mini case then answer the 3 questionsread the mini case then answer the 3 questionsread the m

TOMS Puts Its Right Foot Forward Mini Case Questions read the mini case then answer the 3 questionsread the mini case then answer the 3 questionsread the mini case then answer the 3 questionsread the mini case then answer the 3 questionsread the mini case then answer the 3 questions Page 102, Brief Integrative Case 1.2 – TOMS puts its right foot forward
Brief Integrative Case 1.2
TOMS Puts Its Right Foot Forward
Nearing 30 years old and tired from working long hours on his fourth start-up, serial entrepreneur
Blake Mycoskie took a much-needed extended vacation to Argentina in 2006.1 While there, Mycoskie
fully immersed himself in the local culture, learning to dance the tango, enjoying fine Argentine wine,
and engaging in sports such as polo.2 Mycoskie also took note of the diverse Argentine fashion
culture. One trend in particular that caught Mycoskie’s eye was the soft canvas footwear called the
“alpargata,” worn by nearly all Argentines.3 During his stay, Mycoskie purchased and began wearing
his own alpargatas. He quickly realized how functional and comfortable the shoes were, leading him
to wonder: Would consumers in the United States also be interested in such a product?
Blake Mycoskie: Serial Entrepreneur
Blake Mycoskie, born in Arlington, Texas, is the founder and “Chief Shoe Giver” for TOMS Shoes. A
world trav- eler and former realty show contestant, Mycoskie has spent his entire career involved in
start-ups.4 Much of Mycoskie’s business knowledge was self-taught through reading biographies of
successful businesspeople. Though originally enrolled at Southern Methodist University (SMU),
Mycoskie dropped out after just two years when he lost his tennis scholarship due to an injury. This
5
newly found freedom gave Mycoskie the chance to put his entre- preneurial spirit into action.
His first start-up business, EZ Laundry, was a small laundry service located at SMU. The university,
with no campus dry cleaning service, provided steady demand.6 By 1999, EZ Laundry had expanded
to three more universi- ties, and Mycoskie sold the company to his partner.7 Fol- lowing this
experience, Mycoskie moved to Nashville and founded his next venture, Mycoskie Media. As an
outdoor billboard company, Mycoskie Media focused on market- ing country music. The company
turned a steady profit, and Mycoskie sold it in just nine months.8
With two successful businesses behind him, Mycoskie and his sister, Paige, applied to be on the
reality show Survivor in 2001. Although they did not make the cut for Survivor, they were ultimately
cast in the travel-based real- ity series, The Amazing Race. Through this experience, Mycoskie was
able to venture to Africa, Asia, and South America. Ultimately finishing the race as second runner-
ups, the brother/sister team missed out on the million U.S. dollar prize by just a few minutes.
However, and perhaps more importantly, the adventure exposed Mycoskie to Argentina for the first
time.9 Later that year, Mycoskie moved to Los Angeles, where he co-founded his third start-up, cable
network Reality Central. For this new ven- ture, Mycoskie joined forces with Larry Namer, a founder
of E! Entertainment Television.10 The network debuted in 2003, with a planned format of airing both
new, original programming as well as reruns of past successful realty shows. The venture was able to
raise large amounts of funding from backers and proved successful until 2005, when competitor
channel Fox Reality began to dominate ratings.11 A short time later, Mycoskie (holding true to his
entrepreneurial spirit) partnered with the founders of Traf- ficschool.com to create his fourth
business, Drivers Ed Direct, which functioned as an online-based drivers educa- tion service.12 To
increase brand awareness, Mycoskie cre- ated a viral marketing company, the Closer Marketing
Group, to better promote his driver education business.13
The TOMS Experiment
On the heels of these successes, Mycoskie took his pivotal trip to Argentina in 2006. As his adventure
was nearing its conclusion, Mycoskie happened to stumble upon an aid worker conducting a
volunteer shoe drive. She was working to provide impoverished children with new shoes, explaining
to Mycoskie that, even in more-developed countries like Argentina, children in poverty often lacked
shoes.14 Without shoes, simple daily tasks can be quite difficult and children are also especially
vulnerable to dis- ease and illness when lacking proper footwear. According to the volunteer,
inconsistent donations limited the suc- cess of events like shoe drives.
Over the next few days, Mycoskie’s eyes were opened to the realities of poverty across Argentina. He
traveled with the volunteer to several local villages, observing pov- erty among children first hand.
The experience left an strong impression on Mycoskie, stimulating him to con- sider getting involved
in addressing poverty.15 Mycoskie strategized how to address the problem. Although he con- sidered
forming a charity to fund shoe donations for the children, the uncertainty posed by often inconsistent
and uneven donations led Mycoskie to consider more busi- ness-oriented solutions. Having a
constant flow of shoes available for donation was deemed as a critical element to the success of the
effort. Mycoskie therefore settled on creating a for-profit business in which the sale of each pair of
shoes would fund the donation of a pair of shoes for impoverished children. Mycoskie, reflecting on
his Argentine adventure, based the shoe design on the “alpar- gata” shoes, which he believed held
potential for success in the U.S. market. “Shoes for a Better Tomorrow,” which Mycoskie originally
named the company, was based on shoe sales today leading to donated shoes tomorrow. The name
was eventually shortened to “Tomorrow’s Shoes,” which again was shortened to TOMS (see Figure
1).16
Products That Solve Problems
TOMS is built around the concept of expanding community outreach efforts through reliable business
practices. As often discussed, TOMS was founded with the “One for One” company philosophy: every
pair of shoes purchased would fund the donation of a pair of shoes to a child in need. First focusing
on developing and selling the simple Argentine alpargata shoe, the company has since diversified its
product line greatly. Current shoe selection includes winter boots, wet-weather shoes, sports shoes,
and even locally produced shoes. Through this program, local locations manufacture their own
traditional shoe, spurring job creation in develop- ing areas. Each type of shoe that is donated is
tailored to the specific geographic region to which it is sent.17
In 2011, the company expanded to incorporate eye- glasses. With every pair of sunglasses purchased,
TOMS
funds the donation of a pair of prescription glasses to a person in need.18 Furthermore, the purchase
of sunglasses funds more intensive eye-related procedures, including sight-saving surgery and
medical treatments. Educational programs regarding proper eye care have also been spon- sored
through TOMS’s donations. Through this venture, TOMS partners with 14 different organizations in
13 dif- ferent countries to help diverse communities.19
TOMS continues to expand its product line and the scope of its social outreach programs. TOMS
formed its first consumable product offering, a coffee business called TOMS Roasting Company, in
2014. With each bag of cof- fee purchased, TOMS provides 140 liters of water to a com- munity in
need. This equates to a week’s supply of fresh, safe water to an individual person. 20 To date, TOMS
has provided over 250,000 weeks of safe water to locations around the globe. 21 In 2015, TOMS
expanded into the handbag industry, with the charitable link of ensuring safe childbirth for expecting
mothers in developing locations. A leading cause of childbirth complications for both the mother and
the infant is infections; with a portion of the profits from the sale of its bags, TOMS is financially supporting partners in its network by delivering materials and training that is needed, decreasing the
chance of an infec- tion for delivering mothers by up to 80 percent.2
As TOMS carries on its “One for One” philosophy, it continues to expand its product line. It is
effectively gen- erating more revenue and at the same time helping more people in need. TOMS is
also spreading its philosophy and gaining more partners to help it with the same cause.
The Unconventional Leader
Mycoskie takes a somewhat unconventional approach to managing the everyday operations at TOMS.
While many entrepreneurs spend long days at the office, Mycoskie takes his duties on the road with
him, acting as a traveling brand representative. This allows him to personally con- vey the TOMS
philosophy to potential customers. Back at the office, a carefully selected management team han- dles
the day-to-day operations.23 Even when he is in the office, Mycoskie takes an unorthodox approach to
manag- ing his staff. Informal meetings are often held out on his sailboat.
Mycoskie’s personal life is equally unconventional. Prior to his recent marriage and the birth of his
child, Mycoskie resided in his sailboat, docked in Marina del Ray, California. He would arise around
8:30 a.m., con- sume a Cliff Bar for breakfast, and spend several hours writing before finally heading
into the office. Mycoskie is also a long-time user of a personal diary, allowing him to track his
thoughts as they occur.24 In fact, his journaling has filled over 50 books, containing his thoughts on all
aspects of his life. He usually revisits these notes months later. In a world where instant
communication is often demanded by employers, Mycoskie is notorious for leav- ing his e-mail inbox
untouched for several days at a time. He also has been known to frequently bypass e-mail completely, utilizing handwritten letters instead. On many days, however, Mycoskie is up early to head to
the airport and function as the company’s traveling spokesper- son.25 Mycoskie spends much of his
time speaking at dif- ferent events and universities to promote personal social responsibility, the
TOMS ideology, and other messages that he believes create positive impact in the world. For two or
three months in the year, Mycoskie also takes time off to go travel as it continues to inspire him
through seeing the world and meeting new people.26
In the years since visiting Argentina and building the TOMS brand, Mycoskie has largely focused on
the cor- porate responsibility and charitable side of the business. Several times a year, Mycoskie
leads teams of volunteers and employees on “shoe drops.” “Shoe drop” is the term that is used to
describe when a TOMS team, composed of roughly 10 to 15 staff and volunteers, heads out into the
field to hand out shoes to those in need.27 This oppor- tunity is considered an honor; an employee
must earn the ability to participate by staying with the company for sev- eral years. TOMS now
donates shoes in over 40 countries, preventing more diseases and providing the means for many
children to live better lives.28
Social Responsibility, Sustainability, and Business Strategy
Early on, one of the most common criticisms of TOMS’s philanthropic programs was that it was not
creating new jobs within local populations.29 Using this feedback con- structively, Mycoskie expanded
the “One for One” phi- losophy and focused his company’s next efforts on creating job opportunities
for those in the developing nations where donations were being directed.
In 2013, TOMS committed to producing one-third of its shoes within the regions where they are
actually distributed. This effort has proven successful; over 700 jobs have been created in the regions
where shoes are donated. Furthermore, employment opportunities have been kept at an equal ratio
for male and female workers, promoting gender equality in developing locations. 30 Today, TOMS
maintains factories in all six countries in which it donates shoes: Argentina, China, Ethiopia, Haiti,
India, and Kenya. Another example of TOMS’s recent push towards social responsibility can be seen
through TOMS Roasting Company. The coffee-produc- ing subsidiary now engages in sourcing
practices that pro- vide farmers with a fair wage and ensure that clean water is accessible to people
in the regions in which it sources its coffee beans. Interestingly, TOMS’s internally conducted studies
indicate that its overseas production initiatives are not negatively affecting domestic shoe
manufacturers.31
Helping like-minded start-ups has evolved into another priority for TOMS. Specifically, TOMS seeks
to assist new socially oriented enterprises in developing locations. Major end-goals of these efforts
are the creation of additional jobs in poverty-stricken areas and the reinvestment of revenue into the
improvement of the lives of locals.32 To help facil- itate these efforts, TOMS has created a platform
called TOMS Marketplace to highlight specific social enterprises and to assist them in their efforts to
improve communities.
Another program that Mycoskie started is funded directly by sales of his award winning book, Start
Some- thing That Matters.33 Mycoskie donates 100 percent of the profits from the book to the Start
Something That Matters Foundation, which has helped create over 20 socially responsible start-ups
including Charlize Theron’s African Outreach Project, Charity: Water, Movember, and Ben Affleck’s
Eastern Congo Initiative.34
Charity: Water is a nonprofit organization focused on solving the water shortage problems common
to areas all over the world. Charity: Water takes donations from indi- viduals that are then reinvested
into organizations experi- enced in building sustainable, community-owned water projects.35 Charity:
Water now maintains operations in 24 different countries, funding almost 20,000 projects and
providing over 6 million people with safe water.36
Movember, another nonprofit organization, is commit- ted to the happiness and health of men. The
organization has raised over US$650 million and funded over 1,000 projects. Efforts are primarly
focused on combating testicular and prostate cancers, the first and second most

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