{"id":1111,"date":"2015-12-05T14:53:18","date_gmt":"2015-12-05T19:53:18","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/toms-a-probationary-winner\/"},"modified":"2015-12-05T14:54:01","modified_gmt":"2015-12-05T19:54:01","slug":"toms-a-probationary-winner","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/toms-a-probationary-winner\/","title":{"rendered":"TOMS \u2013 A Probationary Winner"},"content":{"rendered":"

Background<\/strong><\/p>\n

TOMS was established in 2006 as a casual shoe designer with a philanthropic edge.<\/p>\n

\n

Business Model<\/strong><\/p>\n

TOMS business model has been termed compassionate consumerism.\u00a0\u00a0 TOMS promises consumers that their TOMS purchases will directly improve lives around the world.\u00a0 TOMS creates value by making consumers \u201cfeel good\u201d about their purchases by promising to give back to communities in need around the world.<\/p>\n

\n

Operating Model<\/strong><\/p>\n

TOMS came under a lot of pressure after 2010 when economists, philanthropists and others questioned whether TOMS was creating lasting value in the communities where shoes were donated.\u00a0 A 2010 Time article offers a summary of the debate, arguing that handouts impede a community\u2019s economic growth [1<\/a>].\u00a0 A 2012 Fast Company article directly links TOMS business model to the Time\u2019s article, arguing that \u201cevery free shoe donated actually works against the long term development goals of the communities we are trying to help.\u201d [2<\/a>]<\/p>\n

In 2013, this analysis would likely have highlighted the FAILURE<\/em> of TOMS to align its operating model with its business model, but the company has made great strides over the last 2 years to improve its operations and live up to its promises.<\/p>\n

Product Offerings<\/em><\/p>\n

TOMS has expanded its product offerings, and in turn its \u201cBuy One, Give One\u201d model beyond shoes.<\/p>\n

TOMS shoe purchases still provide a free pair of shoes to a child in need, but also helps fund job creation in these regions.\u00a0 To date, 45 million pairs of shoes have been donated. [3<\/a>]<\/p>\n

TOMS Eyewear purchases fund full eye exams, prescription glasses, and eye surgeries.\u00a0 To date, 325,000 people have had their sight restored, returning to each individual their independence and ability to contribute to the local economy. [4<\/a>]<\/p>\n

TOMS Coffee purchases fund a 140 liter supply of safe water, a week\u2019s supply, to a person in need.\u00a0 To date, 175,000 weeks of safe water have been supplied improving health in these regions. [5<\/a>]<\/p>\n

TOMS Bags purchases fund the delivery of a safe birth kit to a person in need, in addition to training for skilled birth attendants in their communities. [6<\/a>]<\/p>\n

TOMS Backpack purchases fund bullying prevention training and crisis counselor training in schools. [7<\/a>]<\/p>\n

In each of its product offerings, TOMS is making newly invigorated efforts to not simply give a free consumer item, but to create jobs, provide training, and stimulate the local economy.\u00a0 There is still room for improvement, with limited transparency into the gains being made in local economies.\u00a0 More positively, increasing their product offerings allows TOMS to increase their revenues by giving consumers more products to purchase.\u00a0 This increase in revenues increases the charitable work that TOMS is able to accomplish.<\/p>\n

Production<\/em><\/p>\n

Since 2013, TOMS has opened manufacturing plants in many of the regions in which they give free shoes.\u00a0 Factories in Argentina, China, Ethiopia, Haiti, India and Kenya now employ over 700 local workers, helping create a more sustainable economy in those regions.<\/p>\n

TOMS sources its coffee beans from sustainable farms in regions where TOMS supports communities in need of access to safe water.\u00a0 TOMS has also committed to paying farmers fairly. [8<\/a>] \u00a0These commitments boost the local economies and create sources of fair revenues for families in need.<\/p>\n

While TOMS has committed to producing one-third of their gifted shoes in the regions that receive them, they could do much more.\u00a0 TOMS currently continues to produce the majority of their shoes and other consumer products in China.\u00a0 While reportedly working with charitable organizations in over 70 countries, production is only occurring in 6 countries with identified needs.\u00a0 TOMS has a long way to go to truly align its operating model with its business promise to improve lives around the world.<\/p>\n

\n

TOMS is often credited with being one of the first companies to successfully incorporate a social mission into a business model.\u00a0 This inspired the creation of many similar companies such as Warby Parker, Dog for Dog, Figs Scrubs and many more companies that have arguably had great impacts for people in need.\u00a0 In acknowledgement of the great improvements TOMS has made over the last 2 years, TOMS is a probationary Winner.\u00a0 Hopefully, they will continue to make improvements to their operations in order to better align with the social mission that is such an integral part of their business model.<\/p>\n","protected":false},"excerpt":{"rendered":"

Is TOMS one-for-one model a social mission winner?<\/p>\n","protected":false},"author":430,"featured_media":1112,"comment_status":"open","ping_status":"closed","template":"","categories":[192,7],"class_list":["post-1111","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-social-responsibility","category-winner"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"\nTOMS \u2013 A Probationary Winner - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/toms-a-probationary-winner\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"TOMS \u2013 A Probationary Winner - 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