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4-41. What are the major challenges TOMS faces as the firm continues implementing its business model as a means of reaching its mission? Which of these challenges is the most serious and why? CASE 4.2 TOMS's One-for-One Business Model: Is it Sustainable for the Future? Web: www.toms.com Facebook TOMS Twitter: OTOMS Introduction was added in 2014. For every bag of coffee that's sold, In 2005 Blake Mycoskie, a serial entrepreneur, needed TOMS donates an equivalent amount of money to pro a break. After starting 5 companies in 12 years, he trav vide clean water and sanitation for people who need it the most eled to Argentina looking for some time to relax He met some expatriates who were doing social work in villages on the outskirts of Buenos Aires and asked the TOMS's Business Model could tag along. In one village in particular, he noticed TOMS is known for pioneering the one-to-one business that most of the children didn't have shoes. He stopped model. A firm's business model is a plan or recipe for a few of the kids to look at their feet and saw cuts how it creates, captures, and delivers value to its stake abrasions, and infections. He knew the villagers were holders TOMS's business model is unique in that it poor and couldn't afford to buy their children shoes combines the goal of a for-profit company with the am and wondered what he could do to help. He also knew bitions of a philanthropic organization. TOMSS business there was an inexpensive shoe in Argentina called the model template is shown nearby. The following is a brief alpargata. What would be the best way to provide poor Overview of each of the major sections of the business Argentinean children alpargatashoes? model template Mycoskie thought about starting a charity but felt the charity model wouldn't work. He envisioned Core Strategy ishing his family and friends for contributions, and knew they would contribute once or twice, or maybe even TOMS's mission is 'One for One. "The mission is made several times. But it would be hard to continue to ask possible by the way TOMS is structured. TOMS has two What he needed was an approach that would sustain parts. TOMS is a for-profit company that manages the itself by selling a product that people needed to buy Overall operations and logistics. Friends of TOMS is a anyway. The approach Mycoskie came up with he later nonprofit organization that assemblies volunteers, deliv dubbed "one for one." He would create a for-profit busi or the shoes, and coordinates the eyewite restora ness to sell spargata shoes, and for every pair sold he'd tion and coffee clean water initiatives donate a pair to a child in need. An important decision Myookie and his team made Mycoskie returned to the United States and set carly on, when TOMS was strictly a shoe company, was up shop in Santa Monica, California. He started TOMS that the cost of providing shoes to children in need would with no shoe industry experience. The company was be built into the shoes selling price. The same approach originally called Shoes for Tomorrow but was quickly now applies to eyewear and coffee. As a result, as long shortened to TOMS. To get started, Mycoskie went from as TOMS its products and is philanthropic one retail store to another with his unique business idea mission. It does not need to rely on donations, as most A fow Los Angeles boutiques agreed to sell the shoes charities and nonprofits do, to sustain His first break came when the Los Angeles Times on an TOMS's strategy is built on selling practical prod- article about his business. To Mycookie's surprise, the ucts Shoes, eyewea and coffee are products that are article spurred $88,000 in orders in a single weekend sold widely its shoes are pricy S5 to $80 for a pole Fast forward to today. TOMS is now an international of simple slip-ons), but people know that when they brand. It's one for one model has been expanded to buy TOMS shoes they are paying for a pair that will be include shoes, eyewear, and coffee. As of mid-2014 donated to a child in need. TOMS estevily on vol TOMS had given away 10 million pairs of shoes in 60 unters, interns, and partners to do much of its work countries, had helped restore sight for 200,000 people Many of the people who volunteer and work with TOMS in 13 countries, and is providing clean water and sanita- are motivated by the company's mission, which changes tion to villagers in 5 countries. The one-to-one model lives. In some countries, shoes are required in order to has been tweaked some, but the intention is the same attend school Owning a pair of shoes provides a child a TOMS still gives away a pair of shoes for ever part chance to be educated and to have a better TOMS sells. Eyewear was added in 2011. Rather than donat is not reluctant to share these types of mates, which ing a pair of glasses for every pair its sells, TOMS do deeply resonate with volunteers and customers. TOMS nates an equivalent amount of money that is used for has almost as many interns, for example, woring in its sight-saving measures, such as eye surgery, medical facilities as employees Friends of TOMS works with non treatment, or a new pair of prescription glass Coffee profits and NGOs to distributes products. It does this Icon