1. One for One
One person buys. One person is helped.
Group 3
M.M. Binte
Min Jin Jeon
Kye won Suh
June Young Ahn
KSIM
KAIST Business School
Strategic Management Summer Semester 2011
2.
3. C ONTENTS
Company Overview
Business Model
Current Strategy
Strategic Analysis
Issues
Root Cause Analysis
Recommendations
Strategic Management 2 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
4. C OMPANY O VERVIEW
Company American footwear company based out of Santa Monica, California
Created by Blake Mycoskie in 2006 after traveling to
Business Argentina and realizing that the children have no shoes
Strategy As of September 2010, TOMS has given over 1 million pairs
of new shoes to children in need
Analysis Extended product-line to eyewear in 2011
Issues
Causes
Recommend.
Strategic Management 3 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
5. B USINESS M ODEL
Company One for OneTM
One person buys. One person helped.
Business TOMS SHOES: With every pair you purchase , TOMS will give a new
pair of shoes to a child in need.
Strategy TOMS EYEWEAR: With every pair you purchase , TOMS will give sight
to a person in need. (Give prescribed eyeglasses)
Analysis
Creating sustainable business by turning customers into
Issues benefactors rather than depending on fundraising support
Viral Marketing with touching stories
Causes
Recommend. Purchasing
(Fundraising)
Help Persons
With Volunteers
Products Persons
Customers who need
Satisfaction Touching Stories
help
Word of Mouth
Marketing
Strategic Management 4 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
6. C URRENT S TRATEGY
Company Limitation of One for One BM
Profit margin for Shoe Business
Business Sales: 300,000 units * avg price $60 = $18 million
Gross margin = 50% / Revenue for SG&A and tax = 30%
Strategy Net Profit = $4 million
Manufacture and donation costs close to $4 million
Analysis
TOMS Eyewear – The new one for one
Issues It might have same profit margin as Shoe
Overcome Negative Profitability
Causes Sale for other items such as apparel and stickers
Generate an additional revenue stream for the company
Recommend.
Partners with Non-profit organization
Shoe Drop Tour volunteer opportunities
Aligns with other brands
With Ralph Lauren Rugby to distribute one shoe model
Strategic Management
AT&T “More Bars In More Places” campaign 5 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
7. C URRENT S TRATEGY
Company Word of Mouth Effect
No traditional advertising
Business Utilize SNS
Movie clip Including touch stories and playful music
Strategy
To explain TOMS’s social mission & To encourage you to get involve
Analysis Share donation activities through SNS
337 bookmark or sharing services including Facebook, twitter
Issues
Causes
Recommend.
Strategic Management 6 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
8. C URRENT S TRATEGY
Company Customer Participation
Style Your Sole
Business Select a date for your event that works for your guests
Promoting and collect money from your guests including shipping costs
Strategy Need to place your bulk order NO LATER than 2 weeks
Order all plain white canvas TOMS (the easiest to decorate and customize)
Invite local bands or artists to join your event
Analysis
Issues
Causes
For one day without shoes
Recommend. Host event or find & participate in event
Upload pictures wearing Toms or without shoes
Strategic Management 7 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
9. F IVE F ORCES A NALYSIS
Company
Threats of New
Business Entrants
LOW
Strategy
Analysis
Bargaining Bargaining
Issues Power of Competitive Power of
Suppliers Rivalry Customers
Causes LOW HIGH HIGH
Converse, Birkenstock, Roc
China, Argentina ket Dog, UGGS, Vans
Recommend.
Threat of
Substitute
HIGH
Strategic Management 8 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
10. SWOT A NALYSIS
Company
Business Strengths: Weaknesses:
• The message • Young Company
Internal
• Product material • Limited distribution
Strategy • Customizability • Brand awareness
• Global Brand • Limited Style
Analysis • Innovative Options • Very defined target customer
(Vegan, wrap boot)
Issues
Opportunities: Threats:
Causes • Large potential market • Older and more established
• More people becoming competition with greater
External
Recommend. active in social causes media exposure
• Rise in green marketing • Oversaturation of shoe market
• Nontraditional • Overall lack of advertising
stance(facebook, twitter,
YouTube) in media
Strategic Management 9 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
11. I SSUES
Company From Five-Forces and SWOT Analysis
Unisex Designs
Business Preferred by women and kids, not men
Unreasonable Price
Strategy Compared to material’s quality and Product Life Cycle - Expensive
Analysis Low Brand awareness
No traditional mass marketing
Issues Limited distribution channel
Few offline shops in US & globally online sale
Causes Defined target customer
Targeting only young generation
Recommend.
Others
Controversial cognition
Poverty vs. Dignity
An angel? or A wolf in sheep´s clothing?
Strategic Management 10 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
12. R OOT C AUSE A NALYSIS
Company ISSUES Root Causes Recommendations
Designs Many Designs cost
(Men’s shoe)
Business much Low cost design
Five-forces & SWOT Analysis
Price
Strategy (compared to the quality Low profit margin
of the materials and life (because of charity cost)
cycle of the product -
Analysis expensive) Various product-line
Low-price strategy to many fashion items
Brand awareness
Issues (low)
Distribution Only on-line channel
Causes channel (limited)
Increase
Brand Awareness
Recommend. Target customer
(very defined) No mass marketing
Controversial
Others
Keep
cognition Business Model its Business Model
(poverty vs. dignity)
Strategic Management 11 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
13. R ECOMMENDATIONS
Company Make various product design!
Develop plans how to make design without cost
Business Examples about getting low cost design
Fashion Design Contest
Strategy Online – SNS, Offline - Fashion design school
Star Donation
Analysis
Fund Raising, Designed by Stars, Utilization as a model etc
Issues
Best Design Prize Money
Causes
Recommend.
Winner gives
the low cost
but
best design
Strategic Management 12 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
14. R ECOMMENDATIONS
Company Change brand position as a charity brand!
From shoes manufacturing to fashion, charity brand
Business New One for One - Make various product lines
Example – School Project
Strategy
School Bag Get much profit
Analysis Bag pack`s price is more expensive than shoes
Good product to make collection
Issues Student’s Fashionable item
Develop school supplies as well
Causes
Example – Disease Project
Recommend. Disease Get much profit
High demand - household items
Soap, Toothpaste, hand washer etc
Prevention is better than cure
Reduce the possibility of getting disease
Strategic Management 13 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
15. R ECOMMENDATIONS
Company Promote Toms brand & business!
Must increase Brand awareness
Business Awareness of TOMS Shoe company research by The Clemetine group
Focus Group interview, March 2010 (Most respondents living in US)
Strategy
Analysis It means
Marketing efforts are incredibly ineffective!
Issues
Utilize traditional mass media
Causes Keep strategy not to make commercials
Instead of Ads, Open big global event for interview and report
Recommend. Example – World travel relay without shoes
Partnership with Unesco & Unicef
Unesco – Open workcamp making shoes for volunteers
Unicef – Utilize Unicef shop & honorary ambassadors
Strategic Management 14 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
16. R ECOMMENDATIONS
Company Give customer price options!
Keep original business model - One for One
Business
Partially add “Two for Two” model
Strategy Target – someone to want to buy different color or give gift to another
‘One for One’ recently 49$ → ‘One for Two’ about 90$ (cheaper)
Analysis
Partially add “One for Two” or “One for Three”
Issues Target – someone to want to donate more through toms
‘One for One’ recently 49$ → ‘One for Two’ about 70$ (cheaper)
Causes Record customers name in the hall of fame
Recommend. Increase sale volume & Reduce shipping cost
Discount Benefit to regular customers
Establish donation culture though Toms
Strategic Management 15 7/7/2011
Prof. Han Earl Kim KSIM, KAIST Business School
A leading cause of disease in developing countries is soil-transmitted diseases, which can penetrate the skin through bare feet. Wearing shoes can help prevent these diseases, and the long-term physical and cognitive harm they cause.Many times children can't attend school barefoot because shoes are a required part of their uniform