Article focus: http://knowledge.wharton.upenn.edu/article/one-one-business-model-social-impact-avoiding-unintended-consequences/
Anyone who’s heard of Tom’s is probably familiar with their business model–you buy one pair of shoes, they give another pair to a someone in need. At first glance, this may seem like a brilliant idea that allows the buyer to enjoy from the “halo” effect while benefiting another person with a free pair of shoes. When you dig further, there are actually flaws to this model that may create the opposite effect. For starters, giving away a free pair of shoes creates a dependency on the giver, which is never good when you want to fight poverty. Eventually when the pair of shoe wears out, what will happen then? Also, giving away free shoes will also hurt local shoe businesses tremendously.
I believe a better way for businesses to create a social impact is by giving support to those in need by “treating the cause.” Rather than directly giving a pair of shoes, Toms can build a school for every 5000 pair of shoes purchased because education is the most important ingredient in eliminating poverty as well as dependency. In terms of marketing, Toms can still allow the real connection between the buyer and those they’re helping by directly communicating the location and the name of the school they helped to build.
Image source:
http://media03.toms.com/static/www/images/site_assets/one4one/One-for-One-Overview_hero.jpg