Assignment Question

In a five (5)-page paper answer these questions: In your opinion is the “buy one, give one” a sustainable business plan? Why or why not and provide support in defense as to your opinion How does the TOMS story appeal to Customers? Employees? Business Partners? The Media? TOMS is unusual in that it’s a for-profit company that actively incorporates giving into its business model. Can you think of other examples of giving-based businesses? How are these companies similar to and/or different from TOMS? Other companies have copied TOM’s model- do you consider one-for-one approach when making a purchase? Bain Capital LLC recently acquired a 50% stake in the company. In your opinion, does this hurt or help the company? Elaborate as to your opinion. As with most retail companies, Toms must adjust to the ever changing marketplace. Is the one-for-one model appealing to a new generation ( Gen Z) or does the target audience want better products at inexpensive prices. here is an article that might help you: Gen Z YOU MUST DOCUMENT YOUR SOURCE MATERIAL USING FOOTNOTES AND BIBLIOGRAPHY. You cannot exceed 12% on the Turnitin evaluation 1.5 spacing and 11pt font. Submit this assignment in the appropriate assignment box labeled: Toms For longer than we care to admit, CSR- shorthand for corporate social responsibility- was a noble goal. The core idea- minimizing the negative impact a company has on society while maximizing the positive- often translated into philanthropy: make a donation, sponsor a good cause, encourage employees to work in the community. These were good things to do, but they were often treated as side projects, peripheral to the business and followed more by the marketing department than the C-suite. We know this now because we are seeing, thanks to some forward –looking companies, a better way to do CSR- one that can bring bigger benefits, not to just society, to be businesses themselves. Some innovative entrepreneurs are using CSR approaches to start new (ad) ventures to construct their brand mantra. They are using CSR to frame their brand story, drive sales and inspire their customers to feel good as they make their purchase. It is purposeful purchasing to benefit humanity. Social media allows the smallest idea to spread across the globe. Blake Mycoskie found his inspiration while on vacation in Argentina wearing a soft, casual canvas shoe worn by almost everyone in the country, from polo players to farmers to students. He had the idea to bring this type of shoe to the American market. But how…????? … He met American women in a café who was volunteering with a small group of people on a shoe drive. She explained to him that so many kids lacked shoes, even in relatively well -developed countries like Argentina, an absence that did not just complicate their lives, but also exposed them to a wide variety of diseases These seemingly unrelated events became the foundation of his new business. He would become inspired to look for a solution(s) that would allow him to solve each of those two issues. He wondered could he find a way that would combine his sense of entrepreneurship, business and make a profit that would allow him to get shoes on needy children. His solution was TOMS. TOMS Blake knew nothing about making shoes, importing shoes, the shoe business or nor had the financial resources to even begin. However, he had an idea. His idea was to start a company that makes a new kind of shoe similar to the kind that he wore in Argentina. For every pair that he sold, he was going to give a pair of new shoes to a child in need. It was a simple concept: Sell a pair of shoes today, give a pair of shoes tomorrow. Is this the new model for starting a business? No money, no knowledge of the product but something that when sold really helps humanity. In a five-page (5) paper present, your views on the TOMS model: With every pair you purchase, TOMS will give a pair of new shoes to a child in need.

Answer

Introduction

Corporate social responsibility (CSR) has evolved over time, moving beyond traditional philanthropy to become an integral part of business strategies. The “buy one, give one” model, exemplified by TOMS, is a sustainable business plan that has garnered significant attention. This paper aims to critically examine the sustainability of the “buy one, give one” business plan, its appeal to various stakeholders, and its implications in the modern marketplace. It will also explore other giving-based businesses, the recent acquisition of TOMS by Bain Capital LLC, and the model’s relevance to the new generation, particularly Gen Z.

Sustainability of the “Buy One, Give One” Model

The “buy one, give one” model, as embodied by TOMS, is often seen as a sustainable business plan. However, it raises questions about its long-term viability. On one hand, it has been praised for its social impact, as it provides shoes to children in need with each purchase. On the other hand, some argue that such an approach may create dependency and inhibit local economic growth. The sustainability of this model depends on its adaptability and effectiveness in addressing social issues. Research indicates that sustainable CSR strategies should focus on solving underlying problems and fostering self-reliance (Porter & Kramer, 2011).

TOMS’ Appeal to Stakeholders

The TOMS story appeals to various stakeholders in distinct ways:

Customers: TOMS’ customers are drawn to the brand’s commitment to social impact. Purchasing TOMS shoes allows them to contribute to a charitable cause, making them feel like responsible consumers (Smith, 2019). The “buy one, give one” model aligns with consumers’ growing desire for purpose-driven purchases. Customers not only acquire a product but also a sense of fulfillment, knowing that their purchase directly benefits those in need.

Employees: TOMS’ employees are often motivated by the company’s strong ethical values and dedication to making a positive difference. This fosters a sense of purpose in the workplace (Smith, 2019). The company’s mission provides employees with a unique opportunity to be part of something more significant than just a job. This can lead to increased job satisfaction, improved morale, and higher levels of employee engagement.

Business Partners: The “buy one, give one” model has resonated with many business partners who want to engage in socially responsible endeavors and share TOMS’ mission (Smith, 2019). Collaborating with TOMS provides business partners with a chance to enhance their own CSR efforts, which can improve their brand image and reputation. It also helps strengthen the sense of purpose within their organizations.

The Media: TOMS’ unique business model has attracted significant media attention, boosting the brand’s visibility and reputation (Smith, 2019). The media is often drawn to stories that combine entrepreneurship with a strong commitment to social impact. This attention helps TOMS reach a broader audience and amplify its mission.

Other Giving-Based Businesses

TOMS is not the only company that has adopted the “buy one, give one” model. Several other businesses have similarly integrated giving into their core business strategies. Some notable examples include:

Warby Parker: Like TOMS, Warby Parker is a socially conscious eyewear company that donates a pair of glasses for each pair sold. Their mission is to provide affordable, stylish eyewear while ensuring that people in need have access to vision care.

Bombas: Bombas is a sock manufacturer that follows the “one for one” model by donating a pair of socks to homeless shelters for every pair sold. Their focus on comfort and quality aligns with their mission to provide the homeless with the dignity of clean, comfortable socks.

Patagonia: While not a strict “buy one, give one” model, Patagonia is known for its strong commitment to environmental and social responsibility. The company donates a percentage of its sales to various environmental causes and encourages customers to repair and recycle their products.

These companies are similar to TOMS in their commitment to social responsibility and their incorporation of giving into their business models. However, they may differ in terms of the specific product or cause they support. While TOMS focuses on providing shoes, others concentrate on eyewear, socks, or broader social and environmental issues.

Bain Capital LLC’s Acquisition

The recent acquisition of a 50% stake in TOMS by Bain Capital LLC has generated mixed reactions within the business and CSR communities. Some argue that this acquisition may compromise the company’s social mission and shift its focus towards profit maximization. However, it could also provide TOMS with the resources and expertise needed to scale its impact and reach more beneficiaries. The implications of this acquisition largely depend on how it is managed by both parties.

The acquisition by Bain Capital LLC has the potential to benefit TOMS in several ways:

Scaling Impact: With the support of a major private equity firm, TOMS can expand its operations and reach a broader audience, thereby increasing its social impact. More children in need could receive shoes, and TOMS might extend its efforts into new areas.

Operational Efficiency: Bain Capital LLC’s financial resources and expertise can help TOMS streamline its operations, reduce costs, and enhance efficiency. This could allow more resources to be directed towards the charitable component of the business.

Business Expansion: Bain Capital LLC might aid TOMS in diversifying its product offerings or expanding into new markets. This could create additional revenue streams to support the giving program.

However, there are potential risks associated with the acquisition:

Mission Drift: Concerns arise about the possibility of the company prioritizing profitability over its social mission. Bain Capital LLC’s primary focus is generating returns for its investors, and if this becomes the sole emphasis, it may dilute TOMS’ commitment to social impact.

Increased Pressure: Under the ownership of a large private equity firm, TOMS may face heightened performance expectations and financial pressures. Meeting these expectations while maintaining the one-for-one model’s integrity could be challenging.

Brand Perception: Consumers who support TOMS for its social mission may become skeptical if they perceive that the brand’s authenticity is compromised under new ownership. This could lead to a decline in customer loyalty.

For TOMS, the key to a successful partnership with Bain Capital LLC lies in finding a balance between financial sustainability and continued social impact. The company must ensure that its mission remains at the forefront and that the acquisition enhances, rather than detracts from, its charitable goals.

Relevance to Gen Z and Changing Marketplace

The “buy one, give one” model has resonated with Gen Z, the new generation of consumers, who are known for their social consciousness and desire to support brands with strong ethical values. The Gen Z population seeks authenticity and purpose in the products they purchase, which aligns with the core values of TOMS (Ibarra et al., 2019). Gen Z consumers are more likely to make purchases from companies that contribute to a social or environmental cause, and they use their buying power to support brands that share their values. While the “buy one, give one” model continues to appeal to Gen Z, it is essential for TOMS and similar companies to adapt to the changing marketplace. Today’s consumers not only seek socially responsible products but also demand high-quality offerings at competitive prices. TOMS needs to address the following considerations to remain relevant:

Product Quality: As consumers become more discerning, the quality of the products offered by companies like TOMS becomes increasingly important. The one-for-one model should not overshadow the need for excellent product quality.

Pricing Strategy: While social impact is a selling point, TOMS must ensure that its pricing remains competitive in the market. Striking a balance between affordability and social responsibility is crucial.

Diversification: Expanding product lines or exploring new markets can help TOMS meet the demands of evolving consumer preferences. This diversification can cater to a wider audience while still maintaining the core one-for-one model.

Transparency: Gen Z consumers value transparency. TOMS must continue to be transparent about its charitable efforts and the impact it is making, assuring consumers that their purchases are contributing to positive change.

Social and Environmental Initiatives: Expanding the scope of social and environmental initiatives can resonate with Gen Z. Engaging in broader, multi-faceted efforts may attract more socially conscious consumers.

Conclusion

In conclusion, TOMS’ “buy one, give one” model represents an innovative approach to CSR that has generated both praise and criticism. Its sustainability hinges on its ability to evolve and address underlying social issues effectively. It appeals to various stakeholders, including customers, employees, business partners, and the media. Other companies have adopted similar models, integrating giving into their core business strategies to create a positive impact. The recent acquisition of TOMS by Bain Capital LLC presents opportunities for scaling impact but also carries risks related to potential mission drift and increased financial pressures. Managing this transition will be essential to ensure the model’s integrity remains intact. The “buy one, give one” model continues to resonate with Gen Z and aligns with their social consciousness. However, TOMS and similar companies must adapt to changing consumer preferences by focusing on product quality, competitive pricing, diversification, transparency, and a broad range of social and environmental initiatives. In doing so, they can ensure that their commitment to social responsibility remains relevant and effective in the ever-changing marketplace.

References

Ibarra, J. V., Canenguez, T. N., & Ibarra, A. S. (2019). Impact of Corporate Social Responsibility on Gen Z Purchase Intent. International Journal of Scientific & Technology Research, 8(5), 1224-1227.

Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1-2), 62-77.

Smith, A. (2019). TOMS Shoes: A Case Study in Corporate Philanthropy. Journal of Case Research in Business and Economics, 10, 1-15.

Frequently Asked Questions (FAQs)

What is TOMS and the “Buy One, Give One” model?

TOMS is a for-profit shoe and apparel company known for its “Buy One, Give One” model. For every product purchased, TOMS donates a similar product to someone in need, typically shoes to children in underserved communities.

Is TOMS a non-profit organization?

No, TOMS is a for-profit company that incorporates social responsibility into its business model. While it focuses on giving, it operates as a traditional business.

How does the “Buy One, Give One” model work?

When you buy a pair of TOMS shoes, the company donates a pair of shoes to a child in need. This one-for-one model is central to TOMS’ mission and has been expanded to other products in their line.

Does TOMS only donate products within the United States?

No, TOMS’ giving efforts extend globally. They donate products to children in need in various countries around the world.

Can I choose where my donated product goes when I make a purchase?

TOMS typically distributes donations to areas with the greatest need, so individual customers do not have control over the specific destination of their donated product.