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Monday, September 26, 2016

Strategic CSR - Best Buy

At present, there is a cost to recycling e-waste (Chapter 13, p297). Given the drop in global commodity prices in materials such as copper and plastics, it remains significantly cheaper to buy these components on the open market than it is to strip down used consumer electronics goods and recycle the components that can be salvaged. In spite of this, Best Buy, the consumer electronics retailer, sees value in establishing a reputation for itself as the most progressive recycler of e-waste among retailers:
"To date, the retailer has accepted junky gadgets and appliances from anyone – not just customers – for free."
As discussed in the article in the url below, for Best Buy the commitment is far from symbolic. In particular:
"In its annual report last year, the retailer said it had collected more than 126m pounds of consumer electronics and 110m pounds of appliances during that fiscal year, helping it meet its goal of collecting 1bn pounds of electronic waste. The company has since vowed to double that number by 2020."
As a result of current market conditions, however, the firm is beginning to reconsider its recycling model:
"Earlier this month, the retailer announced it would start charging customers $25 for every television and computer monitor dropped off at a retail outlet as part of its in-store recycling program. Because of this, Best Buy will no longer accept television and computer monitors from customers in Pennsylvania and Illinois, as both states prohibit companies from collecting fees to help defray recycling costs. It will still recycle hundreds of other items for free."
Laura Bishop, vice president of public affairs and sustainability at Best Buy, sees this area as becoming increasingly challenging for Best Buy and, at some point, will cross over from being a competitive advantage to a distinct disadvantage relative to its competitors:
"'E-waste volume is rising, commodity prices are falling and global outlets for recycled glass, a key component of TVs televisions and monitors, have dramatically declined,' she wrote. 'More and more cities and counties have cut their recycling programs for budget reasons, limiting consumer options even further. While providing recycling solutions for our customers is a priority, Best Buy should not be the sole e-cycling provider in any given area, nor should we assume the entire cost.' … Many of Best Buy's biggest competitors, such as Amazon and Walmart, don't offer recycling, or their programs don't cover nearly as many personal gadgets and household items. Staples runs a similar recycling program to Best Buy, but it has a more modest goal of recycling 40m pounds of e-waste by 2020."
It is only reasonable to expect firms to promote recycling if that is behavior that is rewarded by stakeholders. Whether government or customers or employees (or some other stakeholder), it is up to us to make it in Best Buy's interests to become a leader in this field. In other words, it is stakeholder response that determines whether this (or any) action can form the basis for a competitive advantage. If stakeholders provide that incentive, Best Buy will lead and its competitors will soon follow.
Take care
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Best Buy's e-cycle program is ambitious, successful and financially unsustainable
By Alison Moodie
February 23, 2016
The Guardian