TOMS Shoes was founded with a unique business model known as “One for One.” For every pair of shoes TOMS sold, TOMS would donate a pair to a child in need. The business model was a success and TOMS experienced consistent and rapid growth despite the global recession that began in 2009. 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. As economic conditions rebounded and the recession came to an end, TOMS sales of shoes grew exponentially from 1 million in 2010, to 10 million in 2014, and to an estimated 95 million in 2020. By June 2020, TOMS had given away nearly 100 million pairs of shoes in over 85 different countries.

Before completing these exercises, be sure to read the TOMS case.

Crafting and executing strategy in the quest for competitive advantage.

How does TOMS’ dedication to corporate social responsibility contribute to its competitive advantage?

Select “yes” for those statements below that are accurate and choose “no” for those that are not.

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.

Yes No

TOMS translates the 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.

 No Yes

TOMS has a very large risk for reputation-damaging incidents than other profit-focused corporations because of their stagnant “One for One” business model.

 No Yes

Rivals questions TOM’s approach to competitive advantage, is it corporate social responsibility, or is it building a multi-million dollar company?

 No Yes

The emphasis on the TOMS cause rather than the TOMS products also improves TOMS’ corporate brand and image.

 Yes No

TOM’s competitive advantage will continue to be based on its strong business model of One for One.

 Yes No

TOM’s competitive advantage focuses on its unique show designs that are considered differentiated and difficult to imitate.

 Yes No

TOMS’ socially responsible actions yield internal benefits that include increased employee morale and dedication as well as the ability to partner up with “Giving Partners,” organizations that help distribute the charity-shoes that TOMS gives.

 Yes No