Question

3 TOMS Shoes: Helping Soles All Over the World In 2002, Blake Mycoskie and his sister Paige competed in the CBS reality program The Amazing Race. During their travels in that competition, Blake and Paige travelled through Argentina. Although they lost the $1 million prize in the contest by 4 minutes, the experience had a significant impact on Blake. In 2006, Blake returned to Argentina for a vacation from his fourth entrepreneurial start-up, which was an online driver's education program for teenagers. While in Argentina, Blake noticed that a very popular shoe worn by the Argentinian people was a casual canvas shoe called the alpargata. The versatile shoe was worn in diverse areas of the country, on farms and in the cities, including in nightclubs. Blake thought this style of shoe would have a market in the United States. At the end of his vacation Blake met an American women in a café who was volunteering for a local shoe drive for children. The shoe drive was needed because many of the children could not afford shoes, needed not only for school but also to help prevent diseases and problems related to the feet such as blisters, sores, and infections. As a result, Mycoskie established TOMS Shoes in 2006. TOMS Shoes has a very simple premise it calls its One for One program. For every pair of TOMS shoes that are sold, one new pair of shoes will be given to a child in need. Mycoskie states that giving is the driving force behind the company, and it is the foundation for growing TOMS in the future. Mycoskie argues that shoes can have multiple benefits for children in developing countries. He cites that many schools require that shoes must be worn to attend school. In addition, the children usually must walk for miles to get to essential services such as education, clean water, and medical help. Furthermore, a number of soil-based diseases can enter the body through a child's foot. These diseases can also affect the cognitive development of the children, negatively affecting the long term cognitive growth potential of the children. Potential trauma to the feet can be caused by factors such as hookworm, podoconiosis, jiggers, and tetanus.

Question:

3. Compare the philanthropic activities of Soles 4 Souls and TOMS Shoes. Describe the differences and similarities of the two organizations. Which group appears to help more people, from a philanthropic view? Explain your reasoning.

4. Is giving really the driving force behind TOMS shoes, in your opinion? Explain.

5. How do you think TOMS’ model may change now that Bain Capital is its partner?

Answer 1

Sole 4souls is a Nashville-based charity which came in to existence in 2006 and it is said that the main impact behind the setting up of the charity was the news article related to the Indian Ocean tsunami in the year 2004 and the founder Wayne Elsey decided to do something different and the charity started working . its main task is to collect new and used shoes and to donate them either directly to the needy people all over the world or through various NGOS or other partners engaged in social service and cause . This organization has its reach in over 125 countries , developed underdeveloped or undeveloped, through out the globe and is said to have donated around 30+ million of shoes. Shoe is a basic need or requirement any where in the world. Shoes help the people from various soil based diseases and foot problems which are results of bare foot living . In any season shoe is a necessity to protect the foot. The foot problems or soil based diseases can bring a negative impact of the growth of children. The children can be affected by hookworms, or may be a victim of tetanus. So it is a definitely a good service to deprived people to make available shoes to wear and sole 4 souls has been doing a remarkable mankind service without selfish motive as it is in number of countries which is commended by various international organization.

On the other hand TOMS entered into shoe business as a business entrepreneur after an overwhelming experience of Mr. Blake during his stay in Argentina. He found there a shoe which was so versatile that it could be used in any season , terrain , or any area of the country. He was so impressed that he decided to set up a manufacturing unit in US and he launched his product with a theme “One for One” which envisaged one pair of shoe to a needy child for every pair sold by the company. He in fact started this practice as an advertisement or publicity to increase his sale of shoes so that it could help to make a good market in the future. Their philosophy is simple identify the needy persons, make befitting shoe, give it to the needy and get the feedback for the improvement. They have been working 70+ countries and more than million shoes have been distributed as a charity. But the feelings , approach and outlook of both the organization is different Sole 4 souls is purely a NGO which is engaged in collection of shoes etc through donation and then distributing them to the people who need them but can not afford. They are not doing such a noble cause to earn an extra penny through any of their business activities. But same is not the case with TOMS. Though they are also making a charity by providing shoes to the needy people who can not afford the cost of shoe but their campaign is aiming at business development and growth. So the biggest difference the feeling behind the action. Therefore there may be some similarities in working model of the both the organization but from philanthropic point of view Soles 4 souls is dong a better commendable job as it is free from any vested interest.

To give one pair of shoe to a needy person for every pair of shoes sold is primarily an idea to create an image of the organization as doing some charity for the society. But the objective is to make a solid foundation for the future business growth by positioning in the minds of customers. There are a number of people who are willing to be a part of any campaign which is for the betterment of the society. Even in India there is a company which pays certain amount for the girl child education from the sale proceeds of its hair oil. So this type of the activities is one of the parts of marketing campaign of the product to attract the customers and to grab some market share. So this is not a bad idea but the organization must be ready to publicize the financials in a transparent way to create a trust in he minds of customers that the company is fulfilling its obligation in the best manner otherwise it is not as useful. Here TOMS seems to be deficient and should be more careful. So up to certain extent “One for One” can be driving force but effectively it may be for short duration. For a long run success they have to dig out some other ways to generate trust in the minds of revenue contributors i.e. customers or purchasers

Since almost 50% capitals is being subscribed by Bain Capitals and therefore they are expected to have a strong say in decision making. They have already been entrusted to look after day to day operations, so this is for sure that some changes will be in the business model in future to provide new product category . Though Bain has declared that they will back the existing “One for One’ policy of the organization but to meet the expectations of the investors there is a need to do something different so that the dependability of the company on Shoe business reduces. They need to diversify their business so that they could explore some newer market and could generate some extra revenue. They have plan to start a new manufacturing unit in Haiti in collaboration LXL golden Pacific in addition to three already existing in other countries, to get rid of a stigma of not-providing-jobs tag. A diversification of business is on anvil and it is expected by one and all related to the company in any manner.