Podcast
Questions and Answers
What is the primary goal of cost efficiency in TOMS?
What is the primary goal of cost efficiency in TOMS?
- To improve public image
- To enhance brand identity
- To increase social media presence
- To minimize production costs (correct)
What did TOMS receive in 2014 to address its financial problems?
What did TOMS receive in 2014 to address its financial problems?
- A government grant of $1m
- A bank loan of $500m
- A $313m investment from a private company (correct)
- A partnership with Skechers
How does TOMS' one-for-one policy impact its business strategy?
How does TOMS' one-for-one policy impact its business strategy?
- It attracts investors aligned with social objectives (correct)
- It reduces the cost of materials
- It limits the expansion of the product portfolio
- It allows TOMS to compete on price with Skechers
What consequence might result from TOMS reducing material costs?
What consequence might result from TOMS reducing material costs?
What is a benefit of TOMS focusing on social objectives?
What is a benefit of TOMS focusing on social objectives?
Why might TOMS fail to attract further private investors?
Why might TOMS fail to attract further private investors?
What aspect of TOMS' practices may lead to higher levels of revenue?
What aspect of TOMS' practices may lead to higher levels of revenue?
What might be a potential drawback of TOMS' commitment to sustainable practices?
What might be a potential drawback of TOMS' commitment to sustainable practices?
How might employee motivation be affected by TOMS' social goals?
How might employee motivation be affected by TOMS' social goals?
What is a consequence of lowering product prices to compete with rivals?
What is a consequence of lowering product prices to compete with rivals?
Flashcards
Social Objectives
Social Objectives
A company's goals and commitment to manage its impact on society.
Cost Efficiency
Cost Efficiency
Minimizing the costs of producing goods and services.
TOMS' Trade-Off
TOMS' Trade-Off
Balancing the need for cost efficiency to maximize profits with fulfilling social objectives.
Impact of Social Objectives on Costs
Impact of Social Objectives on Costs
Social initiatives like TOMS' one-for-one donation policy can increase costs.
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Impact of Cost Efficiency on Social Objectives
Impact of Cost Efficiency on Social Objectives
Reducing costs to improve profit margins may compromise the quality of social initiatives.
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Attracting Investors
Attracting Investors
Social objectives can attract investors who share the company's values.
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Employee Motivation
Employee Motivation
Employees are more motivated when working for a company with social objectives they believe in.
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Brand Identity
Brand Identity
Maintaining high quality materials and responsible suppliers is vital for TOMS' brand image.
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Customer Loyalty
Customer Loyalty
Consumers who value social goals may prefer TOMS over companies with less ethical practices.
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Competing with Rivals
Competing with Rivals
TOMS' social objectives may lead to higher prices, making it harder to compete with low-cost rivals like Skechers.
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Cost Efficiency vs. Social Objectives
- TOMS faces increasing costs and low profit margins, impacting its operations.
- Corporate social responsibility (CSR) is crucial for TOMS to manage the impact of its operations on others.
- A $313m investment in 2014 hasn't translated to the expected profit growth.
- Reducing costs is vital to increasing profits and satisfying investors.
Reducing Costs
- Lowering material costs could allow TOMS to lower prices and compete with competitors like Skechers.
- However, compromising on material quality could harm the brand image and reputation.
- TOMS' unique "one-for-one" policy and commitment to social causes are crucial for customer loyalty and repeat purchases.
Social Objectives
- Helping consumers by providing better eyesight contributes positively to the company's image.
- Strong social goals attract new investors and motivate employees.
- Focusing on social objectives may potentially increase revenue and media attention through improved public perception.
- Social goals come with higher costs – sustainable and recyclable materials, for example.
- The price sensitivity of consumers may influence purchasing decisions if costs become too high.
Overall Strategy
- Cost efficiency is vital for financial survival, but TOMS' unique selling point (USP) relies on its ethical behaviour and social objectives.
- Balancing cost efficiency with social responsibility is essential for long-term success.
- Expanding product lines beyond its core shoe styles could enhance its financial outlook.
- Compromising social objectives could harm the brand's image and competitiveness over time.
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