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TEACHING NOTE
CASE 6
TOMS Shoes: A Dedication
to Social Responsibility
Overview
TOMS Shoes was founded on the premise of the “One for One” Pledge, a promise to donate a pair of shoes
to a child in need for every pair sold in an effort to promote greater social equality. As a relatively new
and privately held company, TOMS experienced consistent and rapid growth despite the global reces-
sion that began in 2007. By 2015, TOMS had matured into an organization with nearly 500 employees and
almost $400 million in revenues. TOMS shoes could be found in several major retail stores, such as Nordstrom,
Bloomingdale’s, and Urban Outfitters.
Suggestions for Using the Case
The TOMS case is a case that is certain to capture the interest of your students and provide for a lively discussion
of the company’s commitment to operating in a socially responsible manner and its differentiation strategy in
the footwear industry. The case was developed to illustrate such Chapter 9 concepts as corporate philanthropy,
corporate social responsibility, and triple bottom line performance and competitive strategy concepts presented
in Chapters 2 and 5. The case will allow the instructor to introduce the business case for socially responsible
behavior and explore the different dimensions in developing a comprehensive corporate social responsibility
strategy and its competitive advantage potential. Students will likely express admiration for the company and
commend it on its social mission and its triple bottom line performance.
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Video for Use with the TOMS Case. There are two accompanying YouTube videos for use with the TOMS
case that can be shown at the beginning of the class period or, if you prefer, have students watch on their own.
Links to the two videos are also posted in the instructor resources section of the Connect Library.
To facilitate your use of assignment questions and making them available to students, we have posted a file
of the Assignment Questions contained in the instructor resources section of the Connect Library for the 21st
Edition
In our experience, it is quite difficult to have an insightful and constructive class discussion of an assigned case
Utilizing the Guide to Case Analysis. If this is your first assigned case, you may find it beneficial to have
class members read the Guide to Case Analysis that follows Case 31 and is posted in the instructor resources
section of the Connect Library.. The content of this Guide is particularly helpful to students if your course is their
first experience with cases and they are unsure about the mechanics of how to prepare a case for class discussion,
oral presentation, or written analysis.
Suggested Assignment Questions for an Oral Team Presentation or Written Case Analysis. You
will find that the TOMS Shoes case is quite suitable for written assignments and/or oral team presentations.
Three good assignment questions are:
1. Top executives at TOMS Shoes, having heard of your growing prowess in strategic thinking and strategic
analysis, have employed you as a consultant and asked you to assess the company’s social responsibility
strategy and recommend a set of actions to help ensure that the company continues to achieve attractive
growth and profitability. Please prepare a 4-5 page report to the senior executives at TOMS Shoes that
includes
2. (Short written case assignment) What are the pros and cons of TOMS Shoes’ corporate responsibility
strategy? What evidence indicates that the strategy has produced positive benefits in the marketplace for
TOMS Shoes? What are your recommendations to strengthen the company’s commitment to corporate
social responsibility?
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Assignment Questions
1. What are the key elements of TOMS shoes’ competitive strategy? Is the strategy best described as low cost,
differentiation, or best cost? Has the company focused on a niche or chosen to pursue the broader footwear
market? Explain.
2. In what ways does TOMS exercise its commitment to corporate social responsibility?
3. How does TOMS’ dedication to corporate social responsibility contribute to its competitive advantage?
4. What is TOMS Shoes situation like? What are its internal strengths and weaknesses? Its external opportunities
and threats?
5. What evidence suggests whether TOMS shoes strategy is working? Does it have a competitive advantage?
Is its financial performance improving or declining?
6. What strategic issues should TOMS shoes management and investors be most concerned with? Are there
possible improvements to its competitive strategy? Are there internal weaknesses or external threats to its
well-being that must be addressed?
Teaching Outline and Analysis
1. What are the key elements of TOMS Shoes’ competitive strategy? Is the strategy best
described as low cost, dierentiation, or best cost? Has the company focused on a niche or
chosen to pursue the broader footwear market? Explain.
TOMSs competitive strategy includes brand loyalty, social responsibility and trendy styles that can be worn
by all age groups. What stands out the most for TOMS is their dedication to the cause that started TOMS
shoes. When shopping for a pair of shoes, a consumer usually looks for different features that a pair of shoe
may possess such as comfort, color, and style. When a customer looks at TOMS shoes, among all other
In the past few years, TOMs does seem to be stepping into the broader footwear market by introducing a
variety of different styles. Additionally, the have a blog on their website that keeps consumers up to date
on their latest giving project. In 2014, TOMS launched their newest One for One model TOMS Roasting
Co. TOMs has been continuously criticized over providing aid to poverty-stricken nations as opposed to
economic development. Some of the best coffee beans in the world are grown in the most impoverished
2. In what ways does TOMS exercise its commitment to corporate social responsibility?
Students are likely to comment that much of TOMS’ CSR strategy centers on its “One for One” Pledge
where TOMS is committed to donating a pair of shoes to a child in need for every retail pair sold. Through
increasing access to shoes, TOMS seeks to remedy global poverty by improving underprivileged children’s
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educational attendance, health, and self-confidence. In order to ensure that the company operates honorably
and ethically, TOMS enforces its own Supplier Code of Conduct and participates in numerous committees
and associations dedicated to sustainability and ethical responsibility. In addition, TOMS also holds employee
workshops to raise awareness about human trafficking and slavery prevention.
and soles. TOMS additionally supports several environmental movements such as Surfers Against Sewage
and is a member of the Textile Exchange, a collective of corporations dedicated to accelerating sustainable
practices and protecting the environment.
TOMS’ workforce consists of “agents of change” who work in an energetic and family-like atmosphere.
Not only are employees drawn to TOMS because of its feel-good social justice cause, but also because
Mycoskie has created a genuinely fun atmosphere where each worker is cared for and their individual worth
is highlighted. Mycoskie tends to write highly personal e-mails to his employees and pursue many team-
building company activities such as trips, clubs, and classes in an attempt to create a “balanced atmosphere”.
Additionally, TOMS tends to recruit a high number of interns relative to full-time employees and maintains
3. How does TOMS’ dedication to corporate social responsibility contribute to its competitive
advantage?
One of the most important reasons TOMS has been so successful is because its customers realize that they
are buying into a cause, not just a product. As TOMS’ customers become vested in the TOMS cause, buyer
patronage increases as the number of repeat-buyers and general enthusiasm rises. TOMS then translates this
increased customer commitment and enthusiasm into successful social media advertising campaigns that
encourage its customers to proactively share in the TOMS cause through avenues such as Facebook and
Twitter.
Furthermore, this emphasis on the TOMS cause rather than the TOMS products also improves TOMS’
1Poulos, James. “TOMS Shoes: a Doomed Vanity Project?” Forbes. 3 June 2013. http://www.forbes.com/sites/jamespoulos/2012
/04/11/toms-shoes-a-doomed-vanity-project.
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TOMS’ socially responsible actions also yield internal benefits that include increased employee morale and
dedication as well as the ability to partner up with “Giving Partners”, organizations which help distribute the
At this point, the instructor can ask students what ways TOMS currently leverages and should leverage its
dedication to corporate social responsibility to further strengthen its financial status. Examples include:
4. What is TOMS Shoes situation like? What are its internal strengths and weakensses? Its
external opportunities and threats?
TOMs internal strength includes distinct and established brand name, trendy and upcoming new styles,
colors and designs also available with different college logos, reasonably priced to cater to a broad market
and most important every purchase counts towards a great cause. Some weaknesses include its lack of major
marketing efforts due to cost, manufacturing in foreign countries may lead to higher distribution costs and
international taxes.
Internal Strengths and Competitive Capabilities
Distinct and established brand name
Trendy and upcoming new styles, colors and designs
Internal Weaknesses and Competitive Liabilities
External Market Opportunities
Marketing for a cause that may lead to further growth as young people become more involved in giving
back in their own communities and around the world to those less fortunate
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External Threats to the Company’s Well-Being
5. What evidence suggests whether TOMS Shoes’ strategy is working? Does it have a
competitive advantage? Is its financial performance improving or declining?
Evidence of growth is visible when looking at TOMs sales figures in Exhibit 5. Revenues have been
6. What strategic issues should TOMS Shoes management and investors be most concerned
with? Are there possible improvements to its competitive strategy? Are there internal
weaknesses or external threats to its well-being that must be addressed?
At this point, much praise has been given to TOMS shoes. Yet the instructor should also ask students to think
critically about TOMS shoes and identify areas that TOMS could improve on.
Although TOMS has received numerous accolades for its emphasis on Corporate Social Responsibility,
such as the 2009 Award for Corporate Excellence (ACE), TOMS has also faced considerable criticisms.
From a financial standpoint, some critics have argued that TOMS shoes have been overpriced relative to the
From a product standpoint, critics have also argued that TOMS produces relatively cheap products that are
of low-quality. With a canvas that is not waterproof and prone to holes, many customers of TOMS may be
so-called “repeat-buyers” because of the low quality of the product. From a charity standpoint, if TOMS are
unable to stand up to the moderate conditions that its customers face, critics argue that the similar shoes that
TOMS donates are unlikely to stand up to the harsh conditions that children in third-world countries face.
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Blake Mycoskie is not only the founder but a major element of TOMs Shoes. His passion for the cause is
almost irreplaceable and is evident in all of TOMs marketing measures. If a larger company wants to acquire
TOMs Shoes, Blake will likely have to stay with the company to keep it going at the pace that it is. Social
Finally, critics have also argued that TOMS engages in social paternalism rather than actual problem-solving.
Rather than teaching the communities themselves to be sustainable, TOMS only helps these communities
through sustainable giving. This may hurt local business efforts and prolong poverty in these communities
Epilogue
There was nothing to report related to TOMS Shoes social responsibility strategy at the time note went to press.