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Page 1 8B10M89
Exhibit TN-1
SUGGESTED ACTIVITIES AND TIMING FOR AN 80-MINUTE CLASS
Total
Minutes
Content
5
5
Clip on production process showing both founders: “Clip Veja,”
http://www.youtube.com/watch?v=KzFpLLJc47E&feature=related
10
5
Take a vote on Hold (stay the course) versus Fold (acquisition or partnership): Ask students
for a show of hands of those who would “Hold” (that is, stay the course) and those who
would “Fold” (that is, form a partnership with either Timberland or another fashion
firm).”Ask a few students the main motivation for their recommendation. As the discussion
unfolds, list the key arguments on two sides of the board, grouping them into specific
categories (see Board Plan A in Exhibit TN-2).
20
10
1. Is Veja more or less successful than other brands in the ethical fashion movement?
Explain your criteria.
The class will likely be split between conventional entrepreneurs and social entrepreneurs on
the issue of margin versus mission. Record key themes (see Board Plan B in Exhibit TN-2).
30
10
2. In which key ways does Veja’s business model differ from that of conventional
fashion industry firms? What role do those differences play in terms of partnership
and acquisition?
Contrast the two business models (see Board Plan C in Exhibit TN-2). The instructor
should keep the business model for Veja on the right-hand side to make it easier to record
the social adjacencies later.
Recommendation: First, work with two students (one for the Veja model, one for the
conventional fashion model) to outline the two models. Then, open the class discussion to
the (im)possibility of integrating the two models.
Remind students that prior “acquisitions” did not integrate the brand, but instead applied
some conventional practices to support growth. If discussion stalls, relate the Louis Vuitton
anecdote: US$4,900 for the first made-in-Africa “charm” may not deliver the same social
impact as the acquired venture originally intended.
Transition question: What trade-offs do the founders face? Are those trade-offs likely
to be acceptable to the founders? Why, or why not?
Note: The Ivey Publishing DVD includes a section on business models.
40
10
3. How did the founders build the brand? Did they use any magic ingredients, or was
it business as usual?
Draw out the moral underpinning of the venture, which are still visible in the founders’
view of the venture “as a work in progress” that still has many limitations. The founders’
focus on the limitations can help them to find ways to differentiate the brand (by intention
and action). Explore under which circumstances Veja’s approach may “rub off” on its
customers, i.e., help to bestow uniquely eco-friendly identities on their loyal sneaker
buyers.
50
10
4. How did Veja’s founders choose brand, product and process extensions?
The founders use social adjacencies. That is, they make decisions that help to reduce social
injustice or mitigate environmental damage; they seek partners that will enable them to
execute on this mission, and then reconfigure their business model to make it work.
(the videos on cotton or leather work well to illustrate this point)
The Ivey Publishing video clip also has a section on art, which can be shown to illustrate
Page 2 8B10M89
Exhibit TN-1 (continued)
60
10
5. Provide your best estimate of Veja’s worth. What considerations are included in
your valuation?
The instructor should push students to provide a number. For example, the instructor can
provoke students by asking, Is Veja really worth a billion? Social entrepreneurs may say
yes, because they would not want to sell their dreams or their culture at any price.
Entrepreneurs are more likely to be motivated to sell, and then start another venture.
Debate option: stage a mini-debate between two students who suggest very different
valuations. This debate will surface the (often dramatically different) “values” we place on
social and environmental issues.
(This valuation exercise can be used as a full-fledged in-class simulation in a double class. It can
also be extended using the Oliberté caselet in Exhibit TN-3).
65
5
6. If Veja were to sell to Timberland, what would be the consequences on the ethical
fashion industry and the conventional fashion industry?
This issue is unresolved; the option of selling Veja has both critics and proponents. With the
intention of fostering critical thinking, the instructor can guide students to think through the
consequences of Veja monetizing its success (especially its success in dealing with social
and environmental issues). Although attempting to place a value on Veja is a worthwhile
task, if the valuation is based solely on monetary benefits, much of Veja’s success in terms
of social and environmental issues may not be taken into account.
The instructor can also raise the importance of role models and their essential contribution to
this emerging ethical fashion industry and social movement.
75
10
What Happened. To close the discussion, show some of the video clips or the excerpt
from the Ted talk to stimulate students to think about the role of fashion in how we
(re)design ventures to address societal problems — at a profit.
80
5
Key Takeaways
Social ventures — emphasize the ability to balance economic, social and
environmental/ecological drivers of competitive advantage by devising business models
that explicitly account for tensions and synergies among these three dimensions.
Social movements — social movements are complementary to market forces; markets are
efficient but not sufficient. The markets of the future depend on changes in consumers’
tastes and companies that challenge the status quo to cultivate a taste for pro-ecological
and pro-social consumption.
Social adjacencies — strategic adjacencies deal with business model extensions that move
one step away from the core (by changing one key element in the business model). Social
adjacencies leverage a pro-social or pro-ecological opportunity that is one step away from
the mission of the venture — for example, Veja’s expansion into vegetable-tanned leather
was an extension of its social mission to work with organic-cotton producers and rubber-
tappers, but it required a different approach (a large step for the business model but a small
step for the social mission).
Page 3 8B10M89
Exhibit TN-2
BOARD PLAN FOR 80-MINUTE CLASS
A: DECISION
HOLD
(stay the course)
FOLD
(partnership)
Economic
Steady growth,
distinctiveness
New Markets
Recognition, appeal
Social
Direct intervention
(through livelihoods)
Indirect intervention
(through partnerships)
Helping a larger firm “act”
on its social mission,
Highly visible campaigns but
loss of control
Environmental
Unique methods,
Investment in know-how
Long-term costs to the
environment; loss of control
Cultural
Promotion of cultural
community and special
local projects
Credits to the umbrella brand
B: VALUATION
Valuation
20 million………………………………………1 billion
(what would it take to
replace the revenue stream)
MARGIN
(what would it take to
replace the revenue stream)
MISSION
C: BUSINESS MODELS
D: SOCIAL ADJACENCIES
(create economic value only by increasing social value)
CONVENTIONAL
Long supply chains
Low margins for suppliers
High gross margin, high
advertising
ETHICAL
Minimal, integrated supply chains
High margins for suppliers (×2–×7)
High net profit (zero advertising)
Art projects
Partnerships (farmers, cooperatives)
R&D in traditional/local methods
Note: the same board plan can be used for a double-class in the first stage. The second stage compares the Veja business model with Oliberte’s business model (outlined in
Exhibit TN-3) to develop a deeper understanding of how Veja’s decision may influence eco-fashion followers and competitors.
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Exhibit TN-3
INTERVIEW WITH OLIBERTÉ FOOTWEAR FOUNDER TAL DEHTIAR
Headquarted in Canada, Oliberté Footwear (Oliberté) has launched the first international footwear company
to work exclusively in Africa. Oliberté’s designs for men’s and women’s shoes are inspired by urban-casual
styling. In spring 2010, the company began selling its shoes both online and in select stores in Canada and
the United States. Oliberté’s founder and president, Tal Dehtiar, has already been recognized with the
International Youth Foundation’s Social Entrepreneur of the Year Award and has been nominated for the
YMCA Peace Award, for Canada's Top 40 under 40 and for Ernst and Young’s Social Entrepreneur of the
Year. The case writer had the privilege of meeting Dehtiar in his workspace in Oakville, Ontario.
Interviewer: It's exciting to see a new eco shoe company bringing great sneakers. Can you tell us more
about your designs?
Dehtiar: Our initial styles include ROVIA (Men) and ELIKA (Women), which retail for $95 to $120. They
Interviewer: Oliberté is a new shoe company showcasing the true potential of Africa. Why Africa?
Dehtiar: All the attention on Africa is focused on alleviating poverty, but the only real way to alleviate
Interviewer: What’s so special about your shoes?
Dehtiar: Within the first few weeks after launching last fall, people started asking why our shoes are so
comfortably light. The average animals used for most leather in other parts of the world only live for about
a year. These animals (cow, sheep and goat) are typically injected with hormones to speed up their
Interviewer: Leather is often seen as not very eco friendly. Why do you choose to use it?
Page 5 8B10M89
Dehtiar: Our first concern is to bring jobs to people; the environmental aspect comes second for us. However,
if we had a choice, we would do both at the same time, but right now sadly we must sacrifice one, but
Interviewer: What about the rubber that you use for your shoes?
Dehtiar: Starting in late 2010, the rubber for Oliberté footwear comes from natural milk from rubber trees
Inteviewer: What’s your vision with Oliberté?
Dehtiar: I always knew I wanted to start my own company and after five years of running MBAs without
Borders, the time was right. When thinking of the products that would still be needed in 200 years from now,
Source: Interview with Tal Dehtiar, April 5, 2010.
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Exhibit TN-4
WEBSITES FOR ETHICAL FASHION
1. On this webpage you can learn more about the CSR program of fashion store Hennes &
Mauritz:H&M Corporate Responsibility:
www.hm.com/us/corporateresponsibility__responsibility.nhtml
Responsibility”: www.nikebiz.com/responsibility/
4. MADE BY is a shadowlabel for fair and organic produced clothing labels. Their track&trace system
5. Organic Exchange works together with MADE BY on track&trace systems which increases
organicexchange.org/oecms/String-Online-Traceability.html
6. Eco Fashion World is a comprehensive news portal on all things eco fashion such as events,
www.ecofashionworld.com/Organizations/
7. Kuyichi is the eco pioneering Dutch casual and jeans brand that has been an inspiration for many
www.kuyichi.com/company/
fashion. Art.23: www.article-23.com
9. Eco Fashion World also offers a guide with over 200 ethical fashion brands and links to their
www.riannedewitte.nl
following. Linda Loudermilk: www.lindaloudermilk.com
www.edun.ie
Ollin: www.nahuiollin.com
15. G = 9.8 is the French lingerie brand that creates pieces out of pinetree fiber. G = 9.8: www.g98.fr
16. This blog narrates the collaboration between UK top designer Vivienne Westwood and the Swiss
2010: www.ecofashionworld.com/Kim/VIVA-VIVIENNE.html
17. Earth Pledge is a NYC based non-profit organization that has initiated the first green fashion events
and-shows
18. This blog is a response to an article on sustainable fashion in the Financial Times. Kim Poldner,
Hotwire/MEAN-GREEN.html
Page 7 8B10M89
Exhibit 4 (continued)
19. Topmodel and green ambassador Summer Rayne Oakes has initiated several projects connecting
www.nukuhiva.nl (opened in February 2006)
is Altermundi. Altermundi: www.altermundi.com (Paris)
Limited: www.equaclothing.com (opened in 2005)
23. Kaight is a fashion forward eco boutique in NYC.Kaight Inc.: www.kaightshop.com/ (New York)
24. On this website you find the latest in green gossip. Ecorazzi: www.ecorazzi.com/
26. This article reports on the London eco fashion event Esthetica in February 2010. Ishwari Thopte,
www.ecofashionworld.com/Fashion-Shows/ESTETHICA-FALL-WINTER-FEB-2010.html
(London)
27. This article reports on the New York City green fashion weeks in February 2010.Abigail Doan,
www.ecofashionworld.com/Fashion-Shows/JOHN-PATRICK-ORGANIC-OPENS-NYFW.html
(NYC)
28. This article gives an overview of several eco fashion events around the world in February/March
www.ecofashionworld.com/Fashion-Shows/YOUR-ECO-FASHION-WEEK.html
29. This online store was one of the first selling only eco fashion design. It was set up by a former
fashion and celebrity journalist in the United Kingdom. Fashion Conscience: www.fashion-
conscience.com
United States. Nimli: www.nimli.com
31. Another successful online eco fashion retailer, based in the United States, is Ascension. Ascension
Eco Fashion: www.ascensiononline.com/
www.amfi.hva.nl
34. In the United Kingdom, the London College of Fashion is an innovator in sustainable fashion
36. The Ethical Fashion Forum is the UK body for ethical fashion that brings together stakeholders,
organizes events and supports small eco fashion brands. Ethical Fashion Forum:
http://www.ethicalfashionforum.com/
