Innovation Report- Toms Shoes

Topics: Business, Strategic management, Entrepreneurship Pages: 6 (2213 words) Published: May 10, 2011
Innovation Project: BUS 4630-06
February 2, 2011
Veronica Creamer, Alex Hohmann,
Adam Holcombe, & Ian Swapp
TOMS Shoes has provided one of the most innovative business ideas the early 21st century has seen. Through the “One for One Movement”, TOMS has ushered in a truly altruistic business model which cannot be ignored by the broader consumer goods industry. By describing what TOMS Shoes is, why it is important, how the One for One idea originated and evolved functionally, and the business model utilized to compel it, a clear void is filled not only for those whose lives are affected at the Bottom of the Pyramid but also in the modus operandi of business in the United States today. This point is also exemplified by delving into the supply chain and specifically what drives the company and its unique features. Lastly, by examining Blake Mycoskie, founder and CEO, and the culture he has created for his novel company, TOMS Shoes’ success via their innovation is pinpointed. Although it also operates a non-profit subsidiary, TOMS Shoes is a for-profit footwear company based in Santa Monica, California. Founded in 2006, the company designs and sells unique shoes while concurrently donating, with every pair sold, a new pair of shoes to a child in need. Derived from the word “tomorrow” and the original concept, “Shoes for a better Tomorrow Project”, TOMS Shoes has become synonymous with the One for One Movement. It has leveraged this unique model into partnerships with companies like Ralph Lauren and Element Skateboards. Originally Mycoskie grappled with the idea of a charity based organization. However, with sustainability in mind, he knew that starting a for-profit business would have a lasting impact. Furthermore, by turning customers into benefactors, his business plan is even more stable as it does not depend on fundraising for support. TOMS Shoes is a marvel business idea that allows its customers to feel good about their purchase far beyond their material appearance. Additionally, the one for one concept is important because it addresses issues far beyond the profit prong of the triple bottom line. Over one million pairs of shoes have been given away to children since 2006. Children in the Unites States, Argentina, Ethiopia, Rwanda, Guatemala, Haiti, and South Africa have all benefitted from the purchasing of TOMS Shoes, which are available worldwide in over 500 stores and online. Additionally, these children are no longer at risk from soil-transmitted diseases which penetrate the skin through bare feet, or enter through cuts and sores, and are now permitted to attend school because footwear is a requirement. The company now maintains a variety of shoes types and apparel beyond their initial offerings, allowing even more people to partake in the One for One Movement as there exists a style to fit every need. The idea for TOMS Shoes can be directly linked to the prospects presented by the Bottom of the Pyramid (BoP). As Stewart Hart, an authority on the benefits BoP markets can offer today’s businesses states, “The unmet needs of those at the base of the economic pyramid may present the best opportunity for firms to define a compelling trajectory for future growth”. For TOMS Shoes, the base of the economic pyramid provided Blake Mycoskie with an entrepreneurial vision that lead to a successful for-profit business venture. In early 2006, Mycoskie traveled to Argentina, a country he previously visited as a contestant on Season 2 of The Amazing Race. While learning how to sail and traveling around the South American country, Mycoskie was perturbed by the widespread poverty and deplorable living conditions he witnessed, especially amongst children. The children’s feet, plagued with cuts and bruises, did not allow them to travel to school and also posed a risk of infection. Simple play, such as engaging in a game of soccer, could potentially cause substantial risk to...
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