Scenario You have been asked to produce a report for the Senior Management Team of your chosen organisation that identifies the sustainability issues facing the industry and reviews the current activities being undertaken to manage these issues. Your chosen organisation must belong to one of the following sectors:
Toms Shoes is a company based in Santa Monica, California and founded by Blake Mycoskie in 2006. With an initial intention of supplying a pair of shoes to poor children in Argentina for every pair sold, the company has expanded to include multiple products in their portfolio. The company operates in the retail industry and has diversified its coverage to the global market. In their product portfolio, the company designs/sells shoes, coffee, apparel, eyewear and handbags (Mycoskie, 2011). With a size of more than 500 employees and annual sales of around $500 million, the company has grown in size to become a multinational firm with a stable grip of the retail industry’s market globally (Quittner, 2016).
Toms products are sold on over 500 stores nationwide and globally. With a reach of over 70 countries, the company has been able to streamline its distribution channel to fit the current market demands. Products are shipped to their various stores where wholesalers, retailers, and direct consumers purchase them. Since its inception, the company has focused on philanthropic activities as part of its sustainable marketing strategies that is considered the new generation approach (Ferenstein, 2010). By offering shoes to the poor in the society across the world, the company has gained mileage against its close competitors in the retail industry. Essentially, Toms Shoes Company takes a social entrepreneurship approach in all its activities making it more prominent in the market (Carroll and Buchholtz 2009, p.54).
The need for a positive impact of companies on the society and the community as a whole is increasingly becoming a necessity in business. Economically, socially and environmentally, businesses have to impact the society in a way that will benefit them, the environment surrounding them as well as the growing business entities (Jianu, ?urlea and Gu?atu 2015, p. 25). Toms Shoe as a company has been able to bring such impacts to the community through their “sell one donate one” initiative that has seen it donate close to 70 million pairs of shoes since it was established in 2006 (Quittner, 2016). In the retail industry, marketing sustainability takes three major channels regarded as the triple bottom line; social, economic, and environmental sustainability. With these accomplished, it can be said that the retail market has a sustainable marketing.
The measure of business profits in human capital is a critical element in evaluating the social bottom line in sustainability in any industry. With this in mind, several factors are known to create the need for a sustainable marketing in the retail industry. The factors not only affect Toms Shoes but also other investors in the sector. First, the need for fair labor practices has created a call for sustainable marketing strategies for many businesses in the retail industry (Jianu, ?urlea and Gu?atu 2015, p. 23). With the increasing diversity in the labor market, Toms Shoes has been able to include people across all races and genders in their labor force. This factor has driven many organizations towards the struggle for marketing sustainability.
Triple Bottom Line: Sustainability in the Retail Industry
Second, sustainability in business processes and products is creating a need for organizations to create sustainable marketing plans. Socially, a sustainable business process should not negatively impact the lives of consumers, stakeholders or any other person directly or indirectly. This factor has made Toms Shoes and other players in the industry to change their tact in the supply chain, production and distribution of their goods to the market. Essentially, business processes need to be socially moral and conform to the different cultures that exist in the communities they are operating (Goworek 2011, p. 77).
Lastly, changing consumer behaviors is creating significant pressure on Toms Shoes to modify their marketing sustainability plans every time. This is meant to adjust to the changes that are experienced in any consumer segments. Although there might be other means changes that require a complete overhaul of the plan, the company has managed to remain on course nonetheless. Ideally, when organizations, sustainability plans do not address existing consumer behaviors, it is likely that it might lead to a social problem that will, in turn, impact the business negatively (Goworek 2011, p. 80). Therefore, retailers need to adopt abstract sustainability concepts that align with the behaviors of the consumers taking into consideration the market situations.
It a common belief that the less natural resources a business consumes and the more positive environmental impacts it has, the more likely for it to survive for longer periods. Based on this approach, Toms Shoes found the need to utilize available resource more economically to conserve the environment as well as reduce pollution. In line with this, three critical factor necessitated a sustainable marketing strategy for the company and other investors in the retail industry. First, increasing waste deposits in major cities and towns across the world have made most businesses in the footwear sector to opt for recycling. Toms use rubber waste as well as other plastic materials to manufacture their alpargata shoes as a way of making the business more sustainable and less dependent on natural resources for their shoe production (Quittner, 2016).
Second, environmental impacts of the products sold by the company have also necessitated the need to have a sustainable marketing. Since the Toms diversified its product portfolio to include coffee, handbags, and apparel, it is obvious that there are environmental concerns raised. This may include gas emissions, pollution, and waste pile up. For this reason, the organization together with others in the industry have adopted a mechanism to combat the problem through recycling some wastes to make other viable and cheap product in the market (Quittner, 2016). Ideally, environmental sustainability in the retail sector is not only concerned with ensuring the environment is conserved but also ensuring the strategies used have positive impacts to the ecosystem (Leemans and Solecki 2013, p. 274).
Finally, climate change has forced businesses to make informed choices on sustainable marketing. Particularly, the retail industry largely depends on products that are directly attached to the environment in their production and sourcing of raw material. With an increase in pressures from environmental activists and organizations, tighter regulations have been put in place to allow each industry to take a green-marketing direction (Kearney, 2014, p. 1520). The restrictions are meant to control businesses from undertaking activities that do not align with the existing environmental regulations. Accordingly, companies such as Toms Shoes have not only embraced the regulations but also created awareness on better environmental practices in the industry (Mycoskie, 2011).
The idea behind any business is surviving the changing conditions in the market while at the same time providing adequate satisfaction to the consumers. Furthermore, impacting them positively in life has made things more complex thus forcing them to adopt long-term sustainable measures. The complexity that is also experienced in the retail industry. In essence, different factors cause the need for a sustainable marketing. To begin with, financial reporting has become a pressing factor to man organisation intending to uphold economic sustainability (Malmaeus 2016, p. 490). Toms Shoes has been forced to make its financial reporting public for transparency reasons as well as revealing their efforts towards growing the economic values of the employees and the community surrounding them.
Additionally, innovation as a factor has created a need for Toms Shoes to adopt sustainable marketing that enables suppliers to continue being in business. Although there is competition in the retail industry, innovation has become central to creating sustainable marketing strategies for organizations. Ideally, the need for innovation in the retail industry necessitates the establishment of mechanisms that not only beneficial but long-lasting in the industry. Economically, innovations are meant to create values for the business and the community associated with the business (Malmaeus 2016, p. 490). This factor is continuously pushing Toms Shoes towards adopting sustainable marketing practices
The destiny of organizations is shaped by the sustainability issues it faces and how well they deal with them. Implications of the issues to the industry as a whole and the well-being of the society vary widely depending on how they tackle the cases. Toms Shoes faces the same fate in their quest to remain in business for as long as possible. However, the anticipated impact of the sustainability issues has to be well known to the management and potential stakeholders for a better counter plan to be designed. This part particularly discusses the potential impacts that Toms shoes and the society may experience due to the sustainability issues present in the retail industry as discussed earlier.
As times changes, societal needs increase and the impact is primarily a burden on businesses that operate within the respective areas. Toms Shoes currently has many philanthropic-oriented corporate social responsibility programs across over 70 countries worldwide (Quittner, 2016). As a result of growing concerns, there is a need for improvements in education programs, health, poverty eradication and social interactions. The company is deemed to face a myriad of challenges in the future that will force them to increase their CSR activities to covers the ever-increasing challenges in the society. Particularly, the impacts of social sustainability are expected to be intensive on the company in future.
Essentially, Toms Shoes is expected to experience increment in the cost of social programs due to the changing needs of the society as well as an increasing population across the world. For this reason, the company may face financial constraints if proper management frameworks are not established in advance. Ideally, sustainability is a long-term engagement that will need the organisation to continuously change its tact in order to occupy the changing times (Wiese, Zielke and Toporowski, 2015). Therefore, Toms Shoes needs to prepare for increasing budgetary allocations for CSR programs to sustain its marketing in the volatile retail industry.
Due to the increasing changes in economic sustainability as well as the factors necessitating it, changes in capital investments decisions will be inevitable in the future of Toms Shoes. The requirements of the society are changing and so does the investment plans for Toms Shoes. For this reason, appraising any projects will largely be dependent on how well it is going to benefit the society and the company altogether as part of practicable marketing principles (Jobber and Ellis-Chadwick, 2016, pp. 34-36). Furthermore, resources are becoming scarce and this calls for Toms Shoes to reinvent their investment plans appraisals. Although the issue might be seen to only impact the company alone, it has significance on the well-being of the society as a whole (Larsson and Hanberger 2015, p. 92).
The financial burden of sustainability will continuously increase which may, in turn, see the social programs reduce in the long run. The impact of this move on the community will be reduced social services offered by the company. Furthermore, the retail industry is increasingly growing and the levels of revenues are decreasing for organizations. Toms Shoes is also expected to feel this effect in the future thus making it unavoidable to change it investment appraisal strategies. Depending on the direction the company will take, the society may find themselves receiving less or more benefits from the sustainability marketing approach taken by the company.
Effects of climate change, waste disposal, and gas emissions are growing concerns in any industry. Since climate change and waste management are part of the environmental factor causing the need for sustainable marketing in the retail industry, the regulations are anticipated to become tougher. On Toms shoe part, this impact will not only require the company to adapt to the regulations but also adjust some of their production and disposal mechanisms. The overall impact will be cost increments due to social responsibilities that they will be required to undertake in order to conform to the regulations. Furthermore, a company grows, the magnitude of its projects also increases thus raising more environmental concerns (Larsson and Hanberger 2015, p. 96).
To the well-being of the society, this impact will create a safe and human-friendly environment for all. With environmental regulations in place, Toms Shoes and other organizations in business will be forced to carry out activities that are less harmful to the ecosystem and create an avenue for the better living environment for all. Additionally, it is believed that environmental conservation programs are meant to reduce the health effects of business activities (Carroll and Buchholtz 2009, p. 54). Therefore, the stringent regulations will positively impact the society while at the same time burdening Toms Shoes and others in the retail industry.
Currently, it is not mandatory in some countries as for-profit private organizations report on their CSR programs. However, with the increasing demands by the society especially due to economic level differences, more sustainable marketing measures need to be taken. This may partially or entirely change the mode of a sustainability report. In this regard, Toms Shoes will probably face the challenge of changing its sustainability reporting for it to maintain its market share in the industry. This is possible due to the growing competition in the retail industry which calls for transparency in reporting. The transparency is meant to allow consumers to gain confidence about the company’s brands and activities by appreciating the efforts they put in place to keep their activities socially acceptable, economically beneficial and environment-friendly (Owen 2006, p. 127). In the long run, this impact will shape how the company operates and how the society perceives its operations in any given location.
Sustainability is an issue that gives every organisation challenges due to changes that occur unanticipatedly and realignment of market conditions. Maintaining it has thus been almost impossible for some companies, forcing them to keep on changing according to the prevailing conditions in the market. Toms Shoes has however been able to maintain its sustainability strategies since 2006 and continues to reinvent more mechanisms of supporting their sustainability goals. According to Mycoskie (2011), he intends to not only make profits but also to be a social entrepreneur whose ideas are philanthropic in nature. For this reason, the company is managing its sustainability in a manner that benefits both the company and the society. Several initiatives are being used by the company to manage its sustainable marketing goals.
The campaign of Toms Shoes that involves giving out one shoe for everyone that is bought has been a great milestone in ensuring the sustainability of the company in the market. In the first year of operation alone, the company was able to make sales of 10,000 pairs of shoes which directly translated to a total of the same amount of shoes in donations to over 50 countries across the world (Brown, 2013). This initiative has made the company one of the best known to have a philanthropic approach whose cost is almost half of its revenues. With an initial idea of providing poor children in Argentina with shoes, Mycoskie opted to diversify the business to cater for other needs in the society including the provision of handbags and apparels that are used by women who deliver at home (Toms, n.d.).
This strategy has not only been able to keep the business running in the industry but also it has attracted the attention of more consumers and humanitarian organizations to join them in the calling. Despite having started from the backyard of Mycoskie’s house the business has gained popularity across the world due to this out-reaching program that has immensely helped needy children in countries such as Rwanda, South Africa, Philippines, and Pakistan. As a sustainability activity, the company is able to maintain its relevance and prominent in the market. Furthermore, the products they sell are mostly made from simple raw materials but modified to be unique and appealing to consumers (Mycoskie, 2011).
Toms Shoes Company has been at the forefront of reducing environmental pollution with most of its materials made from recycled materials and the final product are recyclable after use. For instance, the shoes are made from natural hemp, reusable polyester, and organic cotton while the packaging boxes are made of 80% post-consumer disposals and later printed using soy ink (Brown, 2013). This approach has saved the environment from pollution as well as providing the company with an adequate supply of raw material for the shoe production. Just like in any business, sustainability in the market is determined by the adequacy of the supply of materials for production (Wiese, Zielke and Toporowski, 2015).
This approach in business has for the past 12 years given Toms Shoes an opportunity to continue growing and reaching out to the much bigger population. Through recycling, for instance, the company has been able to pass the environmental regulations tests as well as win the loyalty of consumers who consider buying from the Toms store or their products as an effort towards helping another person. Although there have been challenges on the way, recycling has proven to be a great boost to the operations of the company. In essence, it is the basis of its low operational cost that has enabled it to undertake its philanthropic programmes across the globe (Quittner, 2016).
Toms started as footwear business only but it has since adjusted its product portfolio according to the needs of the society. With the increasing demand for salient products such as apparels and eyewear in the world, the visionary social entrepreneur, Blake Mycoskie decided to increase the product range to nutrition, healthcare and education to match with the competition in the retail industry (Fritz, 2018). This has been its primary strategy of achieving economic sustainability in the company. Essentially, a large product portfolio helps businesses cope with competition, increasing production cost and ever-changing social needs (Carroll and Buchholtz 2009, p. 59). Due to the diversification, Toms Shoes adopted, it has maintained its presence in the market and competed fairly with giants like Nike, Adidas, and Puma.
Based on the business concept of Toms Shoes, its sustainability is the retail industry is bound to remain stable. The appealing approach to business they use has created a global desire from other upcoming companies. However, their focus on helping more than making supernormal profits has allowed the company to stay afloat and dominant in the retail industry. Furthermore, the decision to use recycled waste as some of its raw materials for production has seen the company run its production at relatively low costs thus saving it enough capital for corporate social responsibilities in the long run. Generally, the company has sufficiently managed its sustainability plans and they are proving beneficial to both the firm and the society.
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