Here's the TOMS Case Study prepared by me, Mitesh M Motwani. I've covered the following topics: Company Overview Products & Services Social Welfare by TOMS Management Information & Financials Market Information: Market Size, Competitors, Social Media Analysis / (Digital) Brand Strength SWOT Analysis Milestones Challenges The Future of the Business Conclusion Ways to reach me: LinkedIn: www.BeingMCuBE.com Twitter: @BeingMCuBE

1. Case Study
By
Mitesh M Motwani
LinkedIn: BeingMCuBE.com
Twitter: @BeingMCuBE

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Company Overview
In 2006, American traveler Blake Mycoskie befriended children in a village in Argentina and found they had no shoes to protect their feet. Wanting to help, he created TOMS, a company that would match every pair of shoes purchased with a pair of new shoes given to a child in need. One for One. Five years later, TOMS realized this movement could serve other basic needs and launched TOMS Eyewear. With every pair purchased, TOMS will help give sight to a person in need. One for One. As more everyday choices have the power to impact the lives of those around the world, the TOMS movement will continue to grow and evolve. [1] [2]
Blake Mycoskie with the original intern, Jonathan at TOMS’s first factory in Argentina

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Products & Services
TOMS Shoes
TOMS Alpargata-inspired Classics (~ $54)
In addition to the alpargata-inspired Classics, TOMS® offers a variety of footwear styles for men, women and kids. From everyday men's shoes like Paseos to Strappy Wedges. [1]
TOMS Eyewear
TOMS Pilot Sunglasses (~ $120)

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TOMS Eyewear is inspired by iconic and vintage style, from wayfarer-inspired Classics to pilot frames to historic oversized lenses, and every purchase provides our customers the opportunity to restore sight to a person in need. [1]
TOMS Apparel & Accessories
TOMS Apparel & Accessories range from T-shirts and Hoodies to art jewelry.
TOMS Coffee
TOMS Peru Coffee (12oz for ~ $13)
TOMS Coffee range includes roasted coffee beans from Peru to Malawi. With every bag of coffee sold, TOMS provides one week of clean water to a person in need.

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TOMS – Marketplace
TOMS Marketplace is platform created to help like-minded companies succeed and build momentum. It includes apparel, accessories as well as home and bath products.
Social Welfare by TOMS
 TOMS gives in over 60 countries
 Over 10 million pairs of shoes have been given since 2006
Children in Africa receiving their TOMS Shoes A person whose sight restoration was facilitated by TOMS
 Over 175,000 people have had their sight restored through purchases of TOMS Eyewear since 2011 [1]

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Management Information & Financials
About Blake Mycoskie:
Blake Mycoskie is the Founder and Chief Shoe Giver of TOMS, and the person behind the idea of One for One, a business model to help a person in need with every product purchased. A simple idea has grown into a global movement. Before TOMS, Blake, a native of Texas who always had an entrepreneurial spirit, started five businesses. His first was a successful campus laundry service, which he later sold. Between business ventures, Blake competed in the CBS primetime series, The Amazing Race. With his sister, Paige, Blake traveled the world and came within

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minutes of winning the $1 million dollar grand prize. Blake is an avid reader and traveler. He is passionate about inspiring young people to help make tomorrow better, encouraging them to include giving in everything they do. His hope is to see a future full of social-minded businesses and consumers. [1]
Other Key People at TOMS[11]
Joe Scirocco – COO Nils Peyron – CMO Zita Cassizzi - CDO
Sean Scott – Chief Shoe Maker Sebastian Fries – Chief Giving Officer Amy Thompson – Chief People Officer

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Priya Bery – Chief of Staff Silvia Mazzucchelli – Chief Merchandising Officer Cheryl Solomon – Chief Legal Officer Investors
Bain Capital, in August 2014, acquired 50% stake in TOMS Shoes, valuing it at $625 million. [3]
Market Information
Market Size
Globally, the casual shoe segment has a market size of about $170 billion, with majority of the growth coming from BRIC nations, especially China and India. [4]

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Competitors
TOMS has several different competitors in the shoe industry with variation in style, pricing and target audience.
TOMS
Converse
Birkenstock
Rocket Dog
UGGS
Vans
Philosophy
Shoes for a better tomorrow, One for one
Shoes inspired by vintage looks and Rock n’ Roll roots
Quality products, comfortable, unique, timeless
Pop culture meets sub- culture with a twist
Promise of luxury and comfort in everyday life
Modern, trendy, seamless style, mass appeal
Target Audience
14-30, trendy, media savvy, involved in music scene or arts, involved in social causes
14-25, athletic types
All ages, trendy upper class
Trendsetters and style conscious consumers around the world of any age
Targeted at everyone, although tilted towards women
Primarily targets urban users, especially those into outdoor activities like surfing, snowboarding
Price
$50-$80
$60- $100+
$100-$200+
$30-$100+
$100-$300
$50-$80+

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Social Media Analysis / (Digital) Brand Strength
TOMS
Converse
Birkenstock
Rocket Dog
UGGS
Vans
Facebook Fans
2.8 M
40.7 M
~ 200 K
531 K
2.4 M
15.2 M
Twitter Followers
2.17 M
708 K
~ 3,500
46.3 K
122 K
740 K
Alexa Rank
13,702
14,648
116,390
559,066
35,529
14,145
Alexa Rank is a metric that signifies how much traffic a site is getting. Higher the rank, higher the traffic.
SWOT Analysis
Strengths
• Extremely strong brand
• Strong emotional connection
• Charismatic leader
• Social causes aren't an afterthought, it's at the core
Weaknesses
• Expensive so entry into emerging markets will be difficult
• Products are easy to replicate by competitors
• Consumers may often buy TOMS only due to the social component
Opportunities
• Huge market size
• Tremendous partnership possibilities
• Strong fan base can lead to more involved campaigns
Threats
• Fiercely competitive market
• Vans & Converse are both strong brands which TOMS will need to be careful about
• Venture Capital funding may strain the delicate balance between profits & social activities

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Milestones
 January 2006: Blake Mycoskie realizes the potential of Alpargatas and the social cause while on vacation in Argentina & comes up with the name TOMS, based on “Shoes for Tomorrow Project”
 May 2006: Begins by trying to sell 250 pairs of shoes
 TOMS gets featured by Los Angeles Times on the front page, giving TOMS the initial wave of marketing and creating brand-awareness
 October 2006: Sells 10,000 pairs of shoes
 October 2006: Distributes 10,000 pairs of shoes to Argentine children
 The company at this point was self-funded as Mycoskie sold his online driver education company for $500,000 to fund TOMS
 November 2007: Distributes 50,000 pairs of shoes to children in South Africa
 April 2009: Distributes 140,000 pairs of shoes to children in Argentina, Ethiopia and South Africa
 January 2011: TOMS is sold by over 500 retailers
 May 2011: TOMS launches eyewear line
 January 2012: Over 2 million pairs of new shoes had been given to children in developing countries

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 March 2014: TOMS enters the Coffee business [5]
 June 2014: Blake Mycoskie reveals interest in selling part of the company to investors to expand [6]
 August 2014: Bain Capital acquires 50% stake in TOMS, valuing it at $625 million [3]
Challenges
The challenges faced by TOMS were pretty unique. While most startups have a tough time getting off-the-ground, TOMS was a hit from the very beginning. The challenges TOMS faced primarily revolved around scaling up with limited resources as it was self-funded. In the early days it faced a challenge when Blake had only 160 pairs of shoes left, but had received 2,200 orders due to the coverage given by Los Angeles Times on the front page. The next challenge for Blake was to find shoemakers in Argentina as well as drive all over Buenos Aires ferrying fabrics to stitchers, unfurnished shoes to shoemakers and so on. Since TOMS began in Blake’s apartment the challenge was to grow the business while operating primarily out of his room and the living room, i.e. bootstrapping. [7]

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The Future of the Business
TOMS has grown from just a brand for shoes to a lifestyle brand selling apparels, eyewear and coffee. Blake Mycoskie has announced that it will use the recently infused funds by Bain Capital to expand globally and introduce new product categories. By end of 2014, TOMS is likely to have a new chief executive. TOMS will also start a new fund to support socially minded entrepreneurs. TOMS is also expected to open new stores in New York, Portland and San Francisco which’ll include not only their products but also an in-house café that’ll sell their brand of coffee. TOMS Roasting Co. aims to be an ambitious new brand with a chain of coffee bars, a wholesale roasting business, and a subscription coffee club online. TOMS has also tied up with Whole Foods Markets nationwide to sell their brand of coffee. TOMS has collaborated with Target for the holiday season starting November 2014 in which they will expand the ‘TOMS for Target’ line of shoes and apparel, introducing products under $50, while still maintaining the One-for-One giving model. [8] [9] [10]

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Conclusion
From creating a strong brand to expanding into new product categories while gaining constant momentum, TOMS has proven to be a huge hit. It has successfully grown from a shoe brand into a lifestyle brand that sells shoes, apparel, accessories, eyewear and coffee, all of this while maintaining its One-for-One giving model. With the recent infusion of funds from Bain Capital, it is expected to further increase that momentum significantly and introduce new product categories while expanding its retail presence. It is making all the right moves so far. The two challenges that I foresee are:
1.) Expanding internationally into emerging markets like India and China where the per capita income is much lower, forcing them to reduce the average unit price across all product categories.
2.) As venture capital funding comes in, it will be tricky for TOMS to maintain the delicate balance between profits and social activities, raising questions about the future of their One-for-One giving model.

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References
1. Toms.com
2. Tom’s Facebook page
3. Reuters
4. Euromonitor’s Apparel And Footwear 2014 Research Report
5. Forbes
6. Wikipedia
7. Start Something That Matters – Book by Blake Mycoskie
8. New York Times
9. CNN – Fortune Magazine
10. Fashion Gone Rogue
11. LinkedIn

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Mitesh M Motwani
LinkedIn: BeingMCuBE.com
Twitter: @BeingMCuBE