CASE ANALYSIS

Lorrie Jane B. Alivio

BSBA FM 1-A
Case Study:
Form of Business of
Organization
of TOMS Shoes Company

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Introduction
TOMS began as a sole proprietorship in 2006, with Blake
Mycoskie using his own personal funds to launch the
business. The company's initial product was a unique line of
shoes inspired by the traditional Argentine alpargata shoe,
and for every pair of shoes sold, TOMS would donate a pair
to a child in need.

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Problem Statement
1.As TOMS grew in popularity and sales,
Mycoskie realized he needed to bring in
outside investors to expand the business.

2.Mycoskie wanted to maintain TOMS' social

mission and values while still attracting
investors.

3.There was a risk of losing control of the

company's mission and values if it became too
focused on profits.
 Analysis
• TOMS was initially a sole proprietorship, but as the company
grew, its founder, Blake Mycoskie, realized the need to bring
in outside investors to expand the business.

• However, he wanted to ensure that TOMS' social mission and

values were not compromised in the pursuit of profits.

• Additionally, as a for-profit company with a social mission,

TOMS faced the challenge of balancing financial goals with
social impact goals.

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 Solutions
• To address these challenges, TOMS chose to become a Benefit
Corporation in 2011. This structure allowed TOMS to prioritize its social
mission and values while still attracting investors.
• In 2014, TOMS became a certified B Corporation, which is a third-party
certification that recognizes companies that meet high standards of
social and environmental performance, accountability, and transparency.

• In 2019, TOMS was acquired by the investment firm, The Raine Group,
but it continues to operate as a B Corporation.

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 Recommendations
1. Companies should consider becoming a Benefit Corporation or a certified
B Corporation if they prioritize social and environmental responsibility.

2. It is important to carefully choose investors who align with the company's

mission and values to prevent loss of control.

3. Companies should regularly assess their impact on society and the

environment and make necessary changes to align with their mission and
values.

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 Conclusion
• In conclusion, this case analysis highlights the importance of choosing the right form
of business organization and staying true to the company's mission and values.

• Becoming a Benefit Corporation and a certified B Corporation helped TOMS maintain

its social mission and values while attracting investors and expanding the business.

• Regularly assessing the company's impact on society and the environment can help
ensure that the company continues to operate in a socially responsible and
sustainable manner.
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Thank you ☺