Introduction:
It is a hard thing to hold a remarkable position in the market, but what is harder is to sustain this position. This phrase is commonly shared among different businesses around the world, and many of them consider it one of the most crucial keys to success. Clothing markets are well-known for their sharp competency, according to their profitability which attracts investors and organizations to enter in it intensively. The market of shoes is one of the most important markets that has a tremendous number of opportunities, thus achieving a competitive advantage can be the pick for many organizations TOMS is one of the leaders in the global market of shoes production as it has a reputable position among the people from different backgrounds, tastes, cultures, and so on. And as mentioned, it is so hard to sustain the leadership without spending much effort and time to create effective methods that can help the company to keep its growth and success
TOMS has a long history of success, which started by depending on a humanitarian case and still working with depending on the same cases, which raises the curiosity to know how humanitarian acts can build a strong reputable brand (that doesn’t deny the effective business model it has). No one can deny that raising the awareness of the people is one of the greatest objects that are the primary marketing criteria of TOMS.
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TOMS has a variety of methods to increase the awareness of donations and volunteering people around the world and spotting light on the critical role of people participating in humanitarian work through spending time, effort, or money to help the low levels of people facing their problems to guarantee an acceptable life with basic standards and needs of life.
Although the great role of TOMS in humanitarian activities, there are many ethical accusations have been noticed towards the company, which have many threats to destroy the reputable brand and eliminate the sustainability of the company; therefore, getting deeper into the details of the ethical issues is the core or the main aim of this case study.
Finally, being identified and clear is the best way to discuss any ethical issue; thus, there will be focusing on the model of “one for one” and how it has an essential role in sustaining the success of TOMS, in addition to discussing two important ethical issues and their role in impacting on TOMS and providing alternatives to solve these dilemmas in the best possible ways. Lastly, deciding on SMART methods to be reliable with the internal and external environments of the company.
Analysis:
No one can deny the importance of building strong public relations with the stakeholders and the people, in general, to guarantee to gain competitive advantages among the competitors. TOMS is one of the most successful companies that depend on the humanitarian side in its public relations and consider it as a main part of Corporate Social Responsibility, which makes the company hold a reputable position and any defect can harm the brand value tremendously.
One for One Model is the primary campaign that has been launched by TOMS to promote its products by engaging the customers to buy donating by one shoe for every purchased one. This campaign consists of diverse promotional methods that attract people from many different regions worldwide. First of all, internships are an essential part of the promotional strategy of TOMS, as they aim to develop the skills and experiences of the students and fresh graduates by giving those chances to have practical training that qualifies them for future careers in a diversity of specializations such as marketing, accounting, HR, and so on.
Internships in TOMS have two primary kinds (traditional internships and vagabonds). The difference between the two programs is inside or outside the company. To be clearer, the traditional internship allows fresh graduates or students to hold positions inside the company and act as beginners to learn the required skills for their future and also helps them financially to improve their qualifications by affording courses and workshops during the internship period. On the other hand, TOMS affords a special program called vagabonds for trainers to be held responsibility for promoting the brand TOMS around the USA in colleges, clubs, schools, and more.
Many other promotional methods are related to the ethical cycle such as the most popular campaign around the world relates to shoes, which is “One Day Without Shoes” which aims to raise awareness of the people about the importance of shoes and how the poor suffer from walking barefoot in non-adaptable natures, such as Africa and Ethiopia.
Despite all of these ethical activities, there are some ethical criticisms and issues against TOMS and the company has to spend more effort and time to solve these problems. There will be a focus on two ethical issues and what are the solutions that can be taken depending on the culture of the company. Firstly, there are many criticisms against TOMS that it doesn’t provide helpful aid in poor countries in the long-term range, but it only depends on the goodwill of others without real changes on the core of these issues. For example, it is a great thing to provide feeding resources for a limited time, but what is greater is to provide a source of feeding through creating job opportunities to better themselves.
There are many alternatives to this issue such as developing health and education in developing countries, as well as, helping the youth to find better jobs and training them to start their businesses, especially after the spread of entrepreneurship. Thus, TOMS can transform its aid from just temporary to continuous help, because building the nations doesn’t rely on aid, as the crisis is not an ordinary nature up to the humanitarian standards.
The second issue is paying low wages to the Chinese labor to sustain the prices of its products reasonably then its selling size did not harm. There are many views admit that there is no balance between maximizing the profits against the humanitarian elements as fair compensation does not exist when the wages are lower than the normal range and the Ethiopian labor is harmed as well because the factories there have issues of abuse on the physical and psychological levels.
The alternatives to this issue are miscellaneous as TOMS can balance between the total costs and labor costs without touching the humanitarian elements by focusing on the technological advancement that can reduce the production costs. Moreover, expanding the production cycle can reduce the costs of production as the materials in bigger amounts are much lower in cost so sustaining the prices at in acceptable level can be achievable. SWOT analysis:
TOMS often tries to sustain its success in many different ways, including building a strong plan (short and long-term); thus, analyzing the current situation is required to guarantee a high percentage of success.
One-for-One Model:
As mentioned previously TOMS considers humanitarian activities as one of the essential methods of building strong relations with the people. “For One Model” is the basic method used to build up these relations efficiently, which raises the curiosity of economists around the world to know the capacity of this method to be useful in the long term. In my opinion, the “One for One Model” is very useful but in the short run, not the long one, according to a variety of reasons as follows:
- Disability to sustain the production costs: in the case of an unplanned increase in the production costs that will lead to failure in continuing the same model or the gain of profits will decrease in a non-reasonable way, so the crisis management will be at so low level.
- Building dependency for the poverty nations: the free products are provided by international organizations such as UNICEF in the crisis periods not at all times because building dependency creates a feeling of non-sense of how important the given products are.
Stakeholders:
Undoubtedly, stakeholders are the partners of success, and concerning about satisfying and choosing them accurately is a very crucial element to gaining success. TOMS considers the stakeholders as an an-separated part of the success criter becausese their satisfaction builds confidence in the brand and the position of the company in the market. Generally, the stakeholders are divided into two main kinds as follows:
Firstly, internal stakeholders: employees, manufacturers, suppliers, and Mycoskie the founder and Chief Shoe Giver.
Secondly, external stakeholders: local shoe mmanufacturers humanitarian organizations, other international brands, consumers, shareholders, and other beneficiaries on the receiving end of TOMS. Appropriateness of “One for One Model”:
Despite the effectiveness of this model for a variety of businesses, I think that it is not effective for any other business for a variety of reasons, but the most important one is that the products or services are divided into categories and standards, so luxury products are not included in the needs of the poverty nations.
Recommendations:
TOMS is a very successful company that has a remarkable position in the market of shoe production, but it still needs to solve its ethical issues a more effectively and here are recommendations for the two mentioned ethical issues:
Firstly, I recommend developing the infrastructure of the developing countries rather than donating shoes and that can be done by taking international organizations such as the Red Cross and the UN as partners to help them effectively, which guarantees high-quality results in improving the education, health, transportation, and so on.
Secondly, I recommend increasing the wages of Chinese labor up to international humanitarian standards and standing on other elements to reduce the total production cost like developing the mechanism of production by depending on more technological devices rather than old ones, which keeps the quality of the products in improving and reducing its costs.
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