The Role of Social Entrepreneurship in Combat Flip Flops

Combat Flip Flops was established in 2010 by three partners, two of whom were ex-rangers. The trio decided to start a company that would help people recover from the effects of war. They aimed to change the economic and social welfare of the veterans. The founders decided to form Combat Flip Flops to empower the local communities financially.

The target market for the company is the pacifists in the society. Most of the company’s products have peace messages written on them. The company also targets consumers who would like to help the community while at the same time getting value for their money. The company makes durable products thus satisfying the needs of such customers.

Combat Flip Flops uses part of its proceeds to support the people recovering from the effects of war. The company has collaborated with several non-governmental organizations to achieve its goals. For instance, Combat Flip Flops has sponsored more than 200 students through Aid Afghanistan for Education. Combat Flip Flops has a factory that hires women only. The firm has also funded the Mine Advisory Group for the removal of landmines and other weapons in the communities. Lastly, Combat Flip Flops has partnered with the Station Foundation to support ex-soldiers who have been affected by the war. The firm plans to extend its philanthropic activities to other countries that have also been affected by the war.

Giving back to the society has aggrandized Combat Flip Flops’ brand. The company’s sales have increased and have enabled the company to expand its operations to new markets.

Background and Origin

Combat Flip Flops was founded in 2012, Kabul, Afghanistan by Mathew Griffins, Donald Lee and Andy Sewrey (StreetShares). Mathew Griffins is the current Chief Executive Officer while Donald Lee is the Chief Marketing Officer. The firm’s president is Andy Sewrey. The Lee and Griffins are former army rangers who worked in war-torn countries such as Afghanistan (Tilton). Combat Flip Flops has hired more employees over the years to manage their growing client-base. The business started with flip-flop manufacturing and later expanded the business to clothing, hats, footwear, sarongs, and sandals.

Griffins, Lee, and Sewrey established the Combat Flip Flops to improve the economic welfare of people in conflict areas. As Griffin and Lee worked in Afghanistan, they saw an opportunity that would help the people recovering from the ramifications of war (StreetShares). They wanted to promote peace in the conflict-affected areas. The trio saw an opportunity in the flip-flop industry, which would improve the welfare of the communities. There were no global entrepreneurs that produced flip-flops made from the rubber used in making combat boots (Miller). Therefore, they decided to venture into the business and started making the durable flip-flops. Their main aim was to connect the local entrepreneurs to the global market. They created Combat Flip Flops to create jobs for the communities. The founders later saw an opportunity in other war-torn countries and expanded Combat Flip Flops’ operations to those communities. Their business has supported thousands of workers that work in the manufacturing firms. Combat Flip Flops has also increased the types of products it produces (Miller). Combat Flip Flops sells the products from the war-affected communities in the global market thus improving their economic and social welfare.

Vision/Mission

Combat Flip Flops’ founders felt that unemployment and the lack of education was one of the contributing factors of war (Combat Flip Flops). Therefore, they decided to empower the communities to mitigate conflicts. Combat Flip Flops’ mission is to promote peace through business and entrepreneurship. The firm strives to create an environment through which entrepreneurs can work together to support the welfare of the people (Combat Flip Flops). Some of the products sold by the company encourage peaceful relations between individuals. Combat Flip Flops has been able to support the welfare of the people affected by war by giving women a chance to access education.

Combat Flip Flops has also promoted peace by using its profits to remove landmines in the countries. The funds donated to the Mine Advisory Group were used to remove unexploded landmines in more than 1300 square meters in Lao and Cambodia (Tilton).

Strategic Objectives and Goals

The central goal of Combat Flip Flops is to promote peace and educate women in communities that face war (Tilton). The organization has used this objective to grow its reputation. Consumers, employees, suppliers, and investors feel that the firm’s orientation is not just about earning profits but also improving the welfare of the community. Combat Flip Flops has created strong relationships with its stakeholders and thus promoting a healthy business environment. The sales have increased because the consumers feel that purchasing the products will be for a good cause.

Value

Combat Flip Flops is in the business of manufacturing and distributing flip-flops, bracelets, caps, and t-shirts. The organization’s operations are based in war-affected countries. The manufacturers use combat boot material to create durable flip-flops and disarmed bomb material to create and distribute fashion accessories. Combat Flip Flops has been able to create employment opportunities for thousands of people from war-torn countries. The employees manufacture products that are sold domestically and internationally. Combat Flip Flops understands the needs of the consumers and ensures that the products are developed to meet or exceed their expectations. The value that is delivered to the local communities can be divided into the multiple joint initiatives and strategic alliances. Combat Flip-Flops has made alliances with various partners to accomplish its mission. Below is an analysis of such partnerships and associations.

Joint Incentives and Opportunities for Mutual Value Creation

The company has made strategic alliances with Amazon to sell its products online (Combat Flip Flops).

It gets suppliers through partnerships and alliances with the local manufacturing industries (Miller). Investing in the local communities is helping the company to achieve its objectives. It has various partners in Colombia and Bogota that manufacture the flip-flops while the ones from Afghanistan manufacture sarongs and shemaghs.

The company has partnered with various non-governmental organizations to help protect the welfare of the societies it operates in. The first firm is the Aid Afghanistan for Education which was established in 1996 (Combat Flip Flops). Aid Afghanistan for Education main goal is to educate female students (Combat Flip Flops). Afghan women are not able to access education due to age barriers and poverty. The non-governmental organization has sponsored over 3000 women and girls, and 104 boys and men (Combat Flip Flops). Combat Flip Flops partnership with the non-governmental organization to offer secondary school education, young Afghan girls. The company has sponsored over 200 female students (Combat Flip Flops).

The company also collaborated with Mine Advisory Group. Mine Advisory Group is a non-governmental organization protects communities across the world from landmines and other explosives that are left in the war zones after a conflict (Tilton).

Combat Flip Flops has also partnered with The Station Foundation which is a non-governmental organization that helps military men and their families get through the stresses they may face post-war (Combat Flip Flops).

In Laos and Afghanistan, the company has collaborated with local artisans who make fashion accessories such as bangles from bombs.

Barriers

Main Challenges Faced in Forming and Implementing

The founders of Combat Flip Flops faced many challenges when forming the company.

Their first batch of products was defective. They had to give the local communities the products for free and count the loss (Miller).

They also were not able to deliver orders in time because the supplies were held at the Pakistan border. They had to make the flip-flops in one of the founders’ garage.

Starting production in Afghanistan was not easy due to various local government regulations and the political environment.

They also faced funding challenges, as local banks could not finance their operations.

Challenge Resolution

To reduce delays, the company decided to move its operations to Colombia and Bogota as Afghanistan was not ready to have them yet (Miller). They solved their financial problems by approaching StreetShares who gave them a loan to finance their operations.

Additional Assessment Tools

Market Overview

Combat Flip Flops started its operations by manufacturing durable flip-flops for men (Miller). Over the years, the company’s operations have extended to other accessories including t-shirts, men’s footwear, and many other products (StreetShares). The marketing personnel in the company have used various platforms to reach out to consumers such as social media platforms. Marketing has increased the company’s customer base.

The company’s target customers are the peace-loving consumers mostly from the war-prone countries and from other parts of the world (Miller). Therefore, the branding of the products with peace promoting messages creates a connection between the consumers and the company. Most of the products are sold online through sites such as Amazon (Combat Flip Flops). The other products are available to local consumers in the manufacturing countries and the United States. The customers purchase the products because they are durable and to support the company’s mission to educate women and promote the economic and social welfare of such communities.

Environmental Challenges and Opportunities

The company has available sources of labor. The communities in the war-affected areas have many individuals who can be trained on how to manufacture the products. For instance, in Afghanistan, women make clothes in the production sites (Miller). The founders believe that idleness is one of the causes of conflict and therefore, they have created job opportunities for the unemployed people. Most of the consumers also want to be part of the company’s community development programs. They support the development programs by purchasing the company’s products thus increasing its revenue.

Combat Flip Flops also faces various environmental challenges since it operates in war-prone communities. The company faces the risk of terrorist attacks. For instance, in 2016 a suicide bomber attack was launched near the company’s Boumi Factory in Afghanistan (Combat Flip Flops). The explosion did not injure or kill any of the company’s employees, but it led to a delay in production, as the employees could not come to work during that period (Combat Flip Flops). However, such attacks only act as motivating factors for the company to continue with its operations.

Product and Service Overview

Combat Flip Flops started by making flip-flops. The idea to make durable flip-flops began in a combat boot factory (Tilton). At the factory, Griffin decided to create a company that would support the local community by offering employment. The first investments did not bear any profits, as the founders had not researched the market and the environment well. For instance, the company’s first productions were of lower quality than expected (Miller). The flip-flops had to be given out for free to the local communities. The company’s second batch was delayed, as the supplies did not get to the company in time. They were held at the Pakistani border (Miller). The supplies had to be sent to the United States, and production was done in Griffins garage. Lee and Sewrey made 4000 flip-flops from the garage (Miller). After that incident, the founders decided to carry out market research to understand the needs of the consumers and the availability of production inputs.

The research enabled them to identify the best areas to locate their production facilities, the people to hire, and the sources of raw materials. They were able to discover that it would not be possible to manufacture the flip-flops in Afghanistan at the moment. Therefore, they decided to establish a factory in Colombia (Miller). After researching the flip-flop industry in Colombia, the founders decided to hire employees from local communities (Combat Flip Flops). The founders were also able to smoothen things out with the local authorities thus making it easier to import raw materials and export the finished products when necessary.

Combat Flip Flops decided to use the locally available raw material to make its products. For instance, it uses the material from the landmines to create accessories such as bracelets (Tilton). The company has been able to grow its business by diversifying its production. Through research, Combat Flip Flops understands the needs of its consumers and produces goods that satisfy them. The consumers have the desire to promote peace and therefore, the company makes products with peace-promoting messages. For instance, some of the products encourage people to become better people such as caps and t-shirts.

The manufacturing process is mostly carried out using human capital. The factories do not have advanced technologies to aid in the manufacturing. Therefore, Combat Flip Flops hires many locals to manufacture its products (Miller). The local communities have acquired various skills, which can help them in improving their economic welfare. Over the years, the company has been able to extend its operation to other countries such as Cambodia. The management has researched the Afghanistan market and found ways of expanding the business in the market (Buchanan). Combat Flip Flops has established various manufacturing factories in the Afghanistan, which helps in supporting the welfare of the women in the society. For instance, the company has a factory that hires women to make sarongs and shemaghs (Miller). By supporting the community, Combat Flip Flops has created a healthy relationship with the Afghans.

Partners and Alliances

Combat Flip-Flops has made alliances with various partners to accomplish its mission.

Corporate Partners

The company has made strategic alliances with Amazon to sell its products online (Combat Flip Flops). Combat Flip-Flops has been able to reach the global market through Amazon.

Local Companies and Entrepreneurs

Combat Flip Flops has become an international brand with outlets in various countries. The company gets suppliers through partnerships and alliances with the local manufacturing industries (Miller). Investing in the local communities is helping Combat Flip Flops in achieving its objectives. The organization has various partners in Colombia and Bogota that manufacture the flip-flops. The partners in Afghanistan make sarongs and shemaghs.

Non-Governmental Organizations

The company has collaborated with various non-governmental organizations to improve the welfare of the people in the countries affected by war. The first partner is the Aid Afghanistan for Education, which was established in 1996(Combat Flip Flops). Aid Afghanistan for Education’s mission is to educate students in Afghanistan (Combat Flip Flops). Poverty and age barriers have denied the Afghan women the opportunity to attend school. The non-governmental organization has educated over 3000 women and girls, and 104 boys and men (Combat Flip Flops). Combat Flip Flops has sponsored over 200 female students through Aid Afghanistan for Education. (Combat Flip Flops).

The company also partnered with Mine Advisory Group. Mine Advisory Group is a non-governmental organization that protects communities across the world from landmines and other explosives that are left in the war zones after conflicts (Tilton). The firm has disarmed weapons from more than 35 countries across the world. Mine Advisory Group also teaches the communities how to identify such weapons and actions to be taken after identification (Combat Flip Flops). The company donates funds for the removal of such weapons. After the weapons have been disarmed, the materials are used to manufacture fashion accessories.

Combat Flip Flops has also worked with The Station Foundation, a non-governmental organization that helps military men and their families get through effects of war (Combat Flip Flops). The organization helps soldiers fit in the society once they are back from war. Two of Combat Flip Flops’ founders were military men, and they understand the stresses and frustrations one might face post-war. The company contributes parts of its earnings to The Station Foundation to help the veterans.

Local Individuals & Groups

In Laos, the company has employed local artisans who make fashion accessories. Combat Flip The company has promoted the local talents in the countries affected by war. Combat Flip Flops gave the people a source of income.

Government - Local/State/National

Combat Flip Flops adheres to the rules and laws placed by the governments in the countries where it operates. Being on the right side of the law has enabled the company to grow without hindrances from the governments. The company can sell to the domestic market as well as export products to the global market.

Other Stakeholders

The company has been able to create employment to thousands of people from war-torn countries. Combat Flip Flops has done so by promoting local entrepreneurs who hire more people to meet the demand from Combat Flip Flops (Miller). The employees manufacture products that are sold domestically and internationally. The company understands the needs of the consumers and ensures that the products are developed to meet or exceed their expectations.

Business Model Development

Ownership and Governance Structure

Combat Flip Flops is owned by its three founders: Mathew Griffins, Donald Lee and Andy Sewrey (Combat Flip Flops). The company’s CEO is Mathew Griffins who had visited Iraq and Afghanistan while in service. Donald Lee is the Chief Marketing Officer of the company and has visited war-prone nations (Combat Flip Flops). He has prior experience in acquisitions and digital marketing, which has enabled him to reach out to the company’s potential clientele. Lastly, Andy Sewrey is the president of the company. Andy was a bass musician, a producer, and a designer before co-founding Combat Flip Flops (Combat Flip Flops).

The customer service sector of the company is led by Jill Doherty who ensures that operations are running smoothly by solving all issues that come up (Combat Flip Flops). She ensures that customers are satisfied. Casey Stenzel is the company’s Chief Financial Officer. Before joining the company, he had worked in other organizations where he gained over 22 years of experience in accounting, finance, and consultation (Combat Flip Flops).

Also, the company has one board member and three advisors. John Sercu holds the two titles. He is a former ranger who ensures that the business is moving towards the right direction. One of the advisors is Paul Litchfield who is an expert in sporting products such as sports footwear. His work is to offer advice on the type and design of the products to be manufactured. His previous designs are patented. The other advisor is Ned Post who was the CEO of Smith Optics. The company also offers internship opportunities. The current intern is Joseph Suh who studies at the University of California. He would like to join the United States Marine Corps after completing his degree program. Figure 1 below represents the company’s organizational structure.

Figure: 1, Company’s structure.

Organizational Decision Making

The Chief Executive Officer, Chief Marketing Officer, and President have the final say in decision-making. However, they consider the suggestion of the other employees such as the advisors and the board member (Combat Flip Flops). They do so to ensure that the decisions they make are in line with the objectives of the company. The management also makes sure that the decisions are always in line with the company’s core values (Black). They also consider the impact of their decisions on the consumers, products, market, communities, and all the other stakeholders. Decisions made should not hurt the welfare of any stakeholder.

Financing

The founders used their private capital to establish the business. Combat Flip Flops had to expand its operation but getting capital was the problem (StreetShares). The company could not get financing from banks because it was a small company with no insurance. The owners requested StreetShares, a company owned by veterans, to fund their business operations. StreetShares supports veteran-owned startups through funding and connecting them to potential investors. The company was able to secure a loan worth $30,000, which came at 23.3% Interest Rate (StreetShares). Combat Flip Flops used the funds to expand and grow its business operations.

In 2016, three shark tank entrepreneurs invested $300,000 for 30% stake in the business (Tilton). Two of the founders, Griffin and Lee, appeared on one of the Shark Tank episodes in search of $150,000 for 10% stake in the business (Tilton). The judges were overly impressed, and they all decided to invest in the business. The company has used the $300,000 to finance its operations and expand the business.

Performance Metrics

Combat Flip Flops uses various metrics to determine whether it is achieving its targets. Firstly, the company tests its financial measures such as revenue, profits, and expenses. Combat Flip Flops monitors the trends on its financial reports to determine its performance (Combat Flip Flops). A decrease in income or profits means that the company is not moving towards the right direction. The company needs to ensure that the costs do not exceed its sales, as it would reduce the income. Secondly, the company uses the number of customers as a measure of whether it is meeting their needs adequately. An increase in the number of customers means that the clients are happy. The company also checks its customer retention rate to determine whether they are satisfied.

Combat Flip Flops also uses quality indicators to determine whether the manufacturers are producing the right products (Combat Flip Flops). An increasing number of defective products means that there is a problem in the factories. The firm also measures the production rate of each factory. An increase in the number of shoes produced in a day is desirable.

Theory of Change

The company’s long-term goal is to create a peaceful environment in the war-torn communities (Combat Flip Flops). To achieve this, Combat Flip Flops has come up with ways to promote the welfare of the people by creating jobs and entrepreneurial programs. The founders believe that when people are busy, they will not have time to hate and fight one another. The company is also safeguarding the lives of the people by removing landmines from the communities. Combat Flip Flops is also educating women and girls. The company’s efforts will improve the peoples’ economic welfare. In the long run, the company will be able to achieve its objectives through these actions.

Manufacturing, Packaging, and Distribution

The products are manufactured locally by the communities. Combat Flip Flops has various factories located in Laos, Colombia, Bogota, and in Afghanistan (Miller). After production, some of the goods are shipped to the U.S while the others are sold locally. In the US, the products are stored in Issaquah, Washington. The goods are also sold online on various websites such as the company’s website and Amazon. The company enables the consumers to order the products online after which they are shipped to them.

Prices across Value Chain

Combat flip-flops’ products are normally affordable to the consumers. The company gets the supplies at cheaper rates and sets a profit margin on the selling price. The profit margin caters for the company’s expenses and its charity programs.

Marketing

Combat Flip Flops has been able to reach out to existing and potential customers through various marketing channels (Combat Flip Flops). The marketing team creates product and brand awareness. They have used the promotion phrase that states that ‘buying a product keeps a girl in school’ which has enabled the consumers to understand the importance of purchasing the products. By promoting brand awareness, Combat Flip Flops got a chance to attend one of Shark Tank’s episodes where it got funds to expand businesses.

Fundamental Changes Made Over History of Venture

Combat Flip Flops changed their initial plans to manufacture flip-flops in Afghanistan. The founders decided to produce the shoes at Colombia and Bogota because it was more comfortable import supplies in the two locations than in Afghanistan.

Competitors

Combat Flip Flops is striving to acquire more customers every day. The company has had an increase in the number of clients over the years, but it still faces a lot of competition in the market. There are many large companies in the apparel and footwear industry such as Sketchers, Levi’s, and Reebok International. The company also faces competition from bracelet and accessories companies such as Pura Vida Bracelets, and Alex and Ani. These companies are large by size and revenue. They have an established market share in the apparel and footwear industry thus making it harder for small companies like Combat Flip Flops to get a slice. These companies have a good reputation as they are known for their quality products. They are also able to produce more at a faster rate when compared to Combat Flip Flops because they have the technology, skills, and resources. These companies produce at large scales and can optimize the economies of scale and thus minimize the costs of production. The firms can produce higher quality products at relatively lower prices when compared to smaller firms like Combat Flip Flops.

The company also faces competition from smaller companies in the industry such as American Legend Corporation and AHN & Son. The firms are almost the same size as Combat Flip Flops. They compete for the same customers, investors, and skilled employees. The organizations mostly experience virtually the same market challenges as Combat Flip Flops. The companies compete on price and quality basis.

Competitive Advantage

Combat Flip Flops manufactures durable products and sells them at lower prices. The company uses the materials that make combat boots to make its flip-flops and other footwear products. Combat Flip Flops also uses the material from bombs to create accessories. These materials are durable, therefore, giving customers value for their money. The products have enhanced the company’s reputation and in turn, increased its sales.

The company also came up with a way to help a broader population by giving them skills and education. The philanthropy of the company has enhanced its reputation in the industry. Consumers, investors, employees and other stakeholders can tell that the company is not just after making profits but changing the lives of the people. The company has an advantage in the market, as consumers are willing to purchase their products, as they know that their money will be used to do admirable things. Most consumers usually are more willing to pay higher prices for products associated with corporate social responsibility programs. By helping the communities affected by war, the company’s reputation has grown and so has its sales. In future, the company should expand its operations to other countries affected by conflict. Helping the communities recover from the effects of war will be advantageous to the company.

Impact

Economic performance

Combat Flip Flops has been growing over the years. The firm’s sales increased from $75000 in 2013 to $300,000 in 2015 (Moltz). The sales had risen by 150% from 2014’s sales value (Buchanan). According to Buchanan, the company is worth $1million. The growth is attributed to the company’s growing reputation.

Combat Flip Flops has also increased the number of factories it owns by expanding its operations to other countries. The move has led to an increase in the types of products it manufactures. Combat Flip Flops’ production capacity has also improved as it can produce more in a day.

Local Livelihood Impact

Changes in Individuals’ Capabilities. Combat Flip Flops has increased the security levels in the communities where it operates. The company has helped in removing weapons that had remained in the war zones after the war (Tilton). The support has saved the lives of many civilians who would have been maimed or killed. Combat Flip Flops has also increased security by giving jobs to the people. People do not have time to fight as they are busy working.

Congruency of Business Model with Local Economy and Community. Combat Flip Flops’s manufacturing factories are located in the countries affected by war. The company partners with local entrepreneurs to manufacture the products (Miller). The entrepreneurs now have the opportunity to grow their businesses. The employees have trained the process of making the products.

Jobs Created. The company has created many employment opportunities in war-torn communities. According to Moltz, each factory has 50 to 200 employees. The company has factories in Colombia, Bogota, Afghanistan, Laos, and Cambodia (Miller). The employees are hired for production purposes as the company does not have advanced production technology. These jobs have helped the residents in improving their socio-economic standard.

Increases / Decreases in Local Self-Sufficiency / External Dependency. Combat Flip Flops has given the communities recovering from war, an avenue to develop themselves economically. Those working at the company are not waiting for handouts from well-wishers. By reducing the number of explosives in the war fields, it has reduced the number of people that could have been maimed or orphaned thus increasing the average life expectancy (Tilton). The company has grown the communities’ self-sufficiency.

Increases / Decreases in Vulnerability to Shocks. The company has decreased the communities’ vulnerability to shocks by ensuring that they are self-sufficient. For instance, it has reduced the economic shocks that could have been as a result of conflicts or the landmines (Tilton).

Power Relationships Affected By Business. Combat Flip Flops has been empowering women in the societies affected by war. Women from such communities have always been discriminated against (Combat Flip Flops). The company has been schooling girls and offering women jobs in Afghanistan. Combat Flip Flops also has a factory in Kabul that employs only female employees.

Environmental impacts

Generation of Solid Waste/Effluents / Emissions. Combat Flip Flops does not produce solid waste that is harmful to the environment. The company uses ready-made rubber to make the flip-flops hence the low waste production.

Changes Natural Resource Base. The company uses ready-made supplies such as rubber. Therefore, its operations do not affect the natural resources in the countries that it has a presence (Combat Flip Flops).

Outcomes and Recommendations

Although the company experienced some challenges when starting out, it has performed as per the expectations of its founders so far. The management is working towards the achievement of the company’s objectives. So far the company has created employment in various communities affected by war and is taking Afghan girls to school.

New Opportunities

Combat Flip Flop’s primary product was flip-flops. Over the years, the company has expanded its operations and is now developing new products such as cups, sarongs, T-shirts, and many more (Miller). The company has also expanded its presence to Afghanistan where women make the sarongs.

How Has The Venture Leveraged These Opportunities?

To expand its operations, the company took a loan from StreetShares worth $30,000. Later on, in 2016, the company also received $300,000 from three Shark Tank investors (Buchanan). These funds have been used to finance the opportunities that the company encountered.

Key Lessons and Surprises

Product Configuration, Production, and Distribution. When starting out, the company experienced various challenges relating to production. The company’s first products had defects and were given away (Miller). Combat Flip Flops also suffered delays in distribution because the founde