Evaluation Essay on Tom's Shoe Company

Introduction

TOM'S shoe company, located in California, is a profit-oriented shoe business renowned for its unique business model. The company's built on a social entrepreneurship approach that is committed to charity work. With its distinct 'One for One' policy, the TOMS brand stands out in the shoe market. For each pair of shoes that the company sells, it donates another to needy children.

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Core Products or Services

The company's primary product was footwear whose design drew inspiration from an Argentinian pattern, Espadrilles. As the company grew, it evolved from manufacturing cozy, casual flats to include products such as apparel and handbags. The brand has also added coffee and eyewear such as optical frames and sunglasses to its product line. In line with its policy, a percentage of profits are used to fund various charitable deeds across the world.

A Brief History

Established in 2006 by Blake Mycoskie, the TOMS company has experienced considerable growth. His inspiration for the brand and its unique business model came from visits to Argentina. Intrigued by the slip-on shoe design worn in Argentina, a business idea formed. Mycoskie adopted the one for one business policy to fulfill his desire to give back to society. The brand name, TOMS, resulted from his vision that entailed providing shoes for tomorrow. The company conducts various events to raise awareness on the need to donate shoes. In 2014, valuing the company at about USD 625 million, Bain Capital LLC acquired 50% ownership. Twelve years later, the company has reportedly donated over 60 million pairs across different countries.

Vital Current Competitors

As a community-based business, Tom's main competition arises from companies that have embraced the buy one, give one model. The strategy initially offered the company a unique competitive edge in the business world. In the shoe and apparel business, the company faces competition from California based retail stores with relatively lower price margins. Online enterprises like Shoedazzle and Zappos pose competition to the establishment.

SWOT Analysis

SWOT Analysis: Strengths

Charitable

The company has a policy through which it donates its products to the needy population. The one for one business model has a positive impact on sales. Philanthropic clients are motivated to make many purchases to facilitate Tom's mission. The company's reputation for social responsibility is an ingenious marketing strategy. Thus, the brand benefits from the positive image associated with charitable institutions.

Product Variety

Tom's shoes offer its clients a diverse range of fabric for the top part of the slip-on's. Different footwear designs and styles ensure customer satisfaction. The diversification in forms boosts sales volumes as loyal clients purchase more than one pair of shoes. The design team's creativity has allowed the company to offer one shoe style with different fabrics consistently. Thus, it has created a loyal client base.

A History That Resonates with Consumers

The company's mission solely focuses on shaping the lives of the needy through business. The background story surrounding its formation makes for a great story. It points to one man's objective to change the lives of others by all means at his disposal. The motivation behind Blake Mycoskie's unique idea and the brand was not corporate greed. Instead, it is a genuine desire to do good for the underprivileged. By making purchases, Toms' customers share a connection with the brand's unique mission.

SWOT Analysis: Weaknesses

Offers a Limited Product Line

The primary revenue earner for the company is its shoe line. Over the years, Toms has tried to diversify the products it stocks. It has launched eyewear, apparel and coffee products. However, the market reach and sales volumes of the latter products are not high. Besides, its unique shoe style limits consumer choices as all forms have the same signature look.

Little Investment on Advertising

Compared to other retail business across the US, Toms has not embraced aggressive marketing techniques. The company has not invested in mainstream advertising methods. It relies on the word of mouth marketing to acquire new clients. Failure to embrace intensive marketing limits the company from tapping into the vast shoe market.

A Narrow-Minded Approach

The company has come under criticism for its choice of method. Over the years, clients have expressed concern over the practicality of giving aid as a long term solution to help the impoverished. Compared to empowering communities to attain self-sustenance, providing aid is a temporary solution. Such arguments have drawn negative attention to the company's mission and activities.

SWOT Analysis: Opportunities

Pacesetter

Tom's was among the first US companies to adopt a business model founded on social responsibility. Based on Mycoskie's initial business model, the company has an opportunity to step up its philanthropic efforts. It can serve as a pacesetter in corporate social responsibility. After that, the company can capitalize on the platform, and the gained positive publicity to push its products into the market.

Untapped Vast Market

The business has an opportunity to serve a broader market than it currently does. The size of the shoe market is broad. The company has the potential to tap into new markets in and outside the US. By deploying a few channels of creating brand awareness, the company can experience robust growth.

Possibility of Expansion

The company can begin a new and exciting chapter by expanding its product lines. Tom's shoe enterprise has the infrastructure to increase the number of products it offers its customers. The business can retain its signature shoe designs and venture into other footwear and fashion products. The opportunities for growth will increase with a broader product line for the customers.

SWOT Analysis: Threats

Stiff Competition

Tom's faces stiff competition in the shoe business from the more established brands. Larger shoe companies have control over the market. Thus, they easily sway customer preferences and can offer high quality merchandise at fair prices. The big companies enjoy economies of scale. Hence, they have a competitive edge over Tom's shoe company.

A Gradual Increase of Criticism

The company has been a subject of discussion regarding the effectiveness of its one for one policy. Critics have raised questions over the practice of giving aid in solving the afflicted communities' long term problems. The negative publicity is likely to affect loyal customers by creating doubt in the functionality of Mycoskie's mission.

The Possibility of Losing Brand Awareness

The failure of Tom's to invest in marketing and advertising has put the company in a precarious position. Every business needs to supplement sales and ensure constant brand awareness in the market. Lack of advertising threatens the longevity of the brand and its purpose. There is a need to keep the broader market informed of the company's activities.

Marketing Plan Focus

Taking into consideration Tom's performance in a SWOT analysis, I firmly believe that introducing a unique product line of cycling shoes and apparel can significantly improve the company's position in the market. In an age where environmental conservation has become a priority, the company can benefit societies by encouraging cycling to reduce pollution. The shoes shall bear the universal Mobius loop that symbolizes recycling. The new product line will accentuate the company's objective of improving the quality of lives through business. The new shoes will target the young population since they comprise the highest percentage of cyclists. Creating environmental awareness while marketing the boots will thus have a positive impact on society. The below outline discusses my market plan for Tom's Cycle shoes.

Segmentation Approach

Based on the company's dedication to social responsibility, the cycling shoe line would boost Tom's corporate social responsibility image. Thus, the most promising group for the shoe line is the young population across the US. While there is no age limit for cyclists, the intention is to nurture a society that understands the implications of environmental pollution. Market segmentation shall prioritize creating brand awareness among clients aged below forty years. This group is behaviorally disposed to cycle more often than any other.

Target Market Description

The primary target market for Tom's Cycle shoes lies in the age bracket of 12-40 years. Cycling is one of the favorite pass time activities for the majority of citizens in this age. Thus, marketing will target this group.

Positioning Statement

For the targeted group, the new product will give them a chance to contribute to improving the society. The purchases made by the members of the population across the age bracket will contribute to conservation initiatives.

Marketing Mix Discussion

Marketing Mix: Product

The marketing plan intends retail the new products in groups to ensure high sales. While the main product is the Cycle shoes, the idea is to sell a pair of shoes alongside one piece of cycling apparel. For instance, using existing infrastructure, the company can manufacture specialized protective eyewear. The eyewear will also bear a similar logo to the Cycle shoes. After that, the market plan shall focus on retailing the two commodities together as one package. Such an approach that offers two in one packages at a fairer price compared to buying a single product is appealing to our target market. This will ensure the companies clears inventory fast.

Cycling apparel such as safety gloves for the cyclists is relatively cheap to manufacture. The market plan intends to supplement the Cycle shoe sales through offering matching safety gloves. Matching products have an appeal for a market that comprises of teens and young adults. Thus, the company will strive to meet the fashion needs for the target market. Similar to the eyewear product mix, the gloves and shoes will form a two in one package. The aim is to ensure that the products provide safety of the consumers. User safety is paramount to ensuring sales since the primary social goal of the new product is to encourage cycling while boosting the brand's market rankings.

Marketing Mix: Price

The average shoe from the company costs between six to ten dollars to manufacture. The cost of production varies with the shoe design, style, and target market. In the retail store, the client pays between fifty to one hundred dollars. Compared to other shoe manufacturers, Tom's shoes offer relatively fair prices. The company will have to factor in a slight increase in the cost of production. To produce a casual but durable and robust shoe will require additional company resource. Availing quality and comfortable products are critical to the success of the new product line. The shoes should provide a good alternative from the regular, sturdy cycling shoes.

On this basis, the estimated price for the Cycle shoes shall range between $ 60-100. As a single product, Tom's eyewear retails at about $ 130-150. To incentivize customers, the protective eyewear, made from recyclable plastic, shall retail at slightly lower prices. Therefore, a combination of the shoes and the eyeglasses can retail at about $ 200. Such a pricing and marketing strategy shall boost supplement the sales volumes of either product. The same scenario will apply for the safety gloves. A package that offers more value at lesser pay easily attracts consumers in the age bracket of the Cycle shoe's target market.

Marketing Mix: Promotion

Besides the more value for less pricing strategy, the preferred marketing approach is to participate in national cycling competitions. By sponsoring...