1. ALDI: Corporate Responsibility Strategy
Madeline Bird, Elaina DeHoratius, Kate Morrison, Helen Phillips-White

2. Theme
Aldi must capitalize on opportunities presented by the current zeitgeist of corporate social responsibility in the United States in order to increase its visibility and enhance its public image.
Maddie: Theme Statement:

3. Background Current Sustainable Business Practices
Organic product offerings
Living wages/benefits
Current Low-Cost Business Practices
Low property costs
Low labor costs
Limited product assortment
Marketing and Public Relations
Current policy-no publicity
Cultural Values - vanity highly discouraged
Customer Trust - built through simplicity
Helen: In this section we will outline what Aldi is already doing that customers like:
Aldi’s sustainable business practices include offering organic products and providing employees with a living wage. Employees who work more than 20 hours a week receive full benefits. In order to keep costs low, Aldi seeks out the cheapest properties and pays in cash for all real estate. Aldi also keep store staff to a bare minimum by allowing the customer to handle unpackaging products and transporting them around the store. Aldi also carries an average of of 1400 SKUs in comparison to almost SKUs at other grocery retailers. Currently, Aldi does not engage in publicity events and vanity is highly discouraged throughout the chain. Customer trust is built through simplicity and the brand is furthered through its reputation and largely word of mouth.

4. Analysis P
No legislation requiring CSR E
Increasing HH disposable income in UK and USA
Increase in drive for sustainability S
Growing demand for packaged food and beverages
Increase in popularity of social responsibility T
Online shopping market is increasing
Self check out in most retail grocery stores S
Cheap prices, good quality
Low operating cost
International expansion
Existing CSR practices W
No advertising
Low market share
Ambience O
Increasing PR presence to increase awareness T
Competition
Kate: Show why we think we should capitalize on above opportunities through SW-PEST-OT
Aldi and Lidl have successfully invaded the United Kingdom in the past five years, affecting sales and profits of major supermarket retailers like Tesco, Morrison, and Sainsbury

5. Value Chain Analysis Aldi’s value creating activities Low product cost
Good quality
Location strategy
Existing CSR
Differentiation opportunities for improving customer value
Lower costs
Increase quality
Expand locations
Increase awareness
Sustainable differentiation and added customer value
Decreases profits
Increases costs
Increases cost and investments
Fixed annual cost
Lower product cost
Higher quality product
Ease of accessibility
Sustainability exposure
Lowering costs would create a big drop in profits since Aldi already has rock bottom pricing due to their “no frills” strategy
Increasing quality would increase costs dramatically and force Aldi to raise prices, putting them in a whole different market segment
Expand locations would increase up front costs and investments dramatically and puts us in uncertain competition grounds (operating in new cities/environments)
Increasing awareness regarding CSR
great britain and northern ireland olympic team sponsorship before rio and through tokyo
We need to create a sustainable differentiation advantage in regards to our competition.
Because our competitors such as Walmart, discount groceries, and dollar stores do not focus on or highlight sustainability or corporate social responsibility, this will be a big differentiator for Aldi and will make a lot of headway in today’s social and economical environment described in the last slide

6. Recommendations Attain B-Corp Status
Increase Public Relations Initiatives
Develop strict PR guidelines
Encourage media coverage
Do not increase marketing activities
Let actions speak for Aldi
Maddie: We want to change Exhibit 1 - “Aldi will not engage in publicity, appearances, public relations” - change this policy to increase PR initiatives in U.S. (BUT NOT MARKETING)
Strict guidelines for new team: they only facilitate how the media talks about us and our current
Aldi should increase its public relations efforts and encourage media outlets to write about Aldi stores. This decision is supported by Historical Concepts of Business and Competitive Strategy which illustrates that marketing is a competitive emphasis, but that we are moving into the social concept phase. of the Value Frontier. Strict guidelines should be created for PR and any external communications to preserve the Aldi tradition of low transparency and low external communications. Rather than putting out a lot of information themselves, Aldi should let its actions speak for themselves, and should encourage media outlets to profile stores and customers.
Finally, Aldi should become a certified B-Corp in order to glean all of the visibility benefits that come with B-Corp status
“PR remains the most effective way to earn the public’s trust”
Earned, owned, and paid
Paid: Organizations are able to extend their reach and at a relatively low cost
Public relations if done right can reach a large audience without the expensive cost of traditional advertising and marketing.

7. B Corp and Aldi B Corp Aldi For profit companies, certified by B Lab
Meet standards
Social/environmental performance
Accountability
Transparency
Aldi
Currently meeting and exceeding standards
Becoming a B Corp will
Generate press and increase positive brand reputation
Save money which is in line with operational model
Hold Aldi accountable to CR principles (est. 2015)
Elaina: B Corps are for profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. Aldi is currently meeting and in some cases exceeding these standards, so the next logical step is to attain B Corp status, which will continue to help Aldi generate press and increase positive brand reputation,expand its customer base, continue to save money, which is in line with Aldi’s operational model, and will help to hold Aldi accountable to its new Corporate Responsibility principles that it put into action in a report in 2015 (check this, think that’s accurate)

8. How to Become a B Corp Meet Performance Requirement
Complete B Impact Assessment 80/200
Governance
Workers
Community
Environment
Meet legal requirement
Determine path for corporate structure and state of incorporation
Make it official
Sign B Corp Declaration of Interdependence and Term Sheet
Helen: Becoming a B Corp takes three steps, the first being meeting performance requirements, which is scoring a minimum of 80 points out of the 200 possible on the B Impact Assessment.
Elaina: The B Impact Assessment asks questions pertaining to governance and how the company is structured/run, how the company treats its workers, the company's interaction within the community, and the company’s effect on the environment and how it is addressing it.
Helen: The second thing a company has to do is meet the legal requirement and determine a path for corporate structure and the state of incorporation. Finally, the company needs to sign the B Corp Declaration of Interdependence and Term Sheet.
Assess Your Impact. (2016). Retrieved October 03, 2016, from

9. Governance
Ex: Has the company worked within its industry to develop social and environmental standards for your industry?
Environmental
Aldi has increased # of sustainably produced cocoa products
Similar increases in seafood, coffee, etc.
Social
Partnerships with Feeding America and Action for Healthy Kids in California
Elaina: This is a sample question that is on the B Impact Assessment under governance. Has the company worked within its industry to develop social and environmental standards for your industry? PwC performed an Independent Practitioner's Limited assurance Report on the sustainability information in Aldi’s International Report on Corporate Responsibility from This is Aldi’s first time summarizing strategies and goals. This graph is from the CR report and shows how Aldi has increased its amount of products containing certified cocoa. Certified by the Rainforest Alliance or Fairtrade means that they were made with respect to the people and the planet and that the farmers grew the crops and managed the lands in a sustainable way.

10. Employee Satisfaction
Workers
Ex: Based on the results of your employee satisfaction assessment (conducted within the past two fiscal years), what percent of your employees are “satisfied” or “engaged?
High employee satifaction is part of Aldi’s culture
Employee Satisfaction
Year
2014
% of employees whoagreed or fully agreed with statement: "In general, Aldi is an excellent employer"
80.25
Kate: Based on the results of your employee satisfaction assessment, what percent of your employees are satisfied or engaged is one of the questions that the B Impact Assessment asks under the Workers section. In 2014, Aldi performed an employee satisfaction survey and the percent of employees who answered I agree or I fully agree to the question, “In general, Aldi is an excellent employer” was 80.25%.

11. Women in Management Positions
Community
Ex: What % of management is from underrepresented populations? (includes women, minorities, people with disabilities)
Over half of total employees are female
There is room for improvement in management representation
Women in Management Positions
Year
2015
Share of female employees in the total number of employees in %
65.91
Share of female employees in the total number of employees in management positions (store management and above) in %
39.21
Maddie: An example question from the community section of the B Impact Assessment is what % of management is from underrepresented populations? In Aldi’s CR Report, it listed, as of 2015, the percent of females overall in the company at 65.91%, and it listed the percent of female employees in management positions, which is 39.21%.

12. Environment
Ex: Does your company monitor and record its universal waste?
“Avoid, reuse, recycle” strategy
Recycles nearly 100% of transport packaging
81% of stores donate unsold food
Elaina: Finally, this is a question from the Environment section of the assessment. It asks if the company monitors and records its universal waste. In the CR Report, Aldi documents that 81% of its stores cooperate with charitable organizations and donate unsold food, and that 99% of its cardboard, paper, cardboard boxes, and plastic wrap from transport packaging were recycled.
Maddie: To the right you can see graphs documenting Aldi’s carbon footprint. In the US, Aldi was able to lower its carbon footprint by 2%, and lower its absolute greenhouse gas emissions from 1521 to 1385 (in thousand tons, not sure how to say that) over the course of two years. In accordance with Greenhouse GAs Protocol, Aldi will continue to calculate the company’s carbon footprint for all corporate processes every two years.

13. Value Added Macro trend Reputation
Importance of purpose as a purchase factor has risen 26 percent globally since 2010
88 percent of research shows solid ESG practices result in better operational performance
Reputation
“Word of mouth is becoming your number one marketing tool” -Kaspar Ulf Nielson
73% of global consumers would recommend companies they see as delivering on CSR
CSR efforts (citizenship, governance, workplace) make up 41.2% of a company’s reputation
Helen: A lack of communication leads to a gap between actual CSR and perceived CSR, Aldi already has CSR activities within its business structure. We’re not arguing for a CSR budget increase, just better communication/transparency of those practices to the public
Extra Stats FROM ELAINA EXTRA EXTRA FIND WHERE TO PUT IT IN THE SCRIPT
B-Corps have been featured on CNN, The Economist, NBC News, PBS, CBS News
B-Corp’s receive free ads in national magazines reaching 5mm readers
Becoming a B-Corp ensues a $50,000 fee every two years out of 73.4 billion yearly revenue

14. Sources
Aldi and Lidl. (2015). Tomorrow, Not Quite The World. The Economist. Retrieved from
Aldi einkauf GmbH & co. oHG: Retailing - company profile & SWOT analysis. (2015). Basingstoke: Progressive Digital Media.
Retrieved from
ALDI US - Corporate Responsibility. (2016). Retrieved October 02, 2016, from
ALDI SOUTH GROUP corporate responsibility report - Supply chain. (2016). Retrieved October 02, 2016, from
Assess Your Impact. (2016). Retrieved October 03, 2016, from
ALDI SOUTH GROUP corporate responsibility report - CR Report. (2016). Retrieved October 02, 2016, from
Caruso, A. (2016, January 12). Aldi Hits 'Refresh' So You Can, Too. Retrieved October 02, 2016, from
Corporate Responsibility Principles of the ALDI SOUTH Group. (2016). Retrieved October 02, 2016, from Corporate Responsibility Principles of the ALDI SOUTH Group. (n.d.). Retrieved October 01, 2016, from

15. Sources Cont.
Gilbert, J.C., Kassoy, A., Houlahan, B. (2016). Impact Governance and Management: Fulfilling the Promise of Capitalism to Achieve a Shared and Durable Prosperity. Center for Effective Public Management at Brookings. Retrieved from
Hartman, Harvey. (2015). Aldi is a Growing Menace to America’s Grocery Retailers. Forbes.com. Retrieved from
Loeb, Walter. (2016). Lidl and Aldi’s Aggressive U.S. Invasion Spells Trouble For Supermarkets. Forbes.com. Retrieved from
Peterson, Hayley. (2016). Aldi Is Fixing its Biggest Weakness, and that should Terrify Whole Foods. BusinessInsider.com. Retrieved from
Prado, F. (2016, September 15) CSR RepTrak® 100.
Rodgers, Bruce. (2013). Too Many Feelings and Not Enough Facts in CSR Strategy. Forbes.com. Retrieved from
United States Disposable Personal Income | | Data | Chart. (2016). Retrieved October 03, 2016, from