Stakeholder Report

IN-DEPTH ANALYSIS OF ALLBIRDS'

STAKEHOLDER LANDSCAPE

Founded in 2016 by New Zealander Tim Brown, Allbirds aims to revolutionize the
footwear industry. The company's approach focuses on sustainable materials like
merino wool, offering a superior and cost-effective alternative to synthetic fabrics.
The brand creates simple designs with one ultimate goal: limited impact on the
environment1. In this report, we will go over all the different stakeholders of the
company, identify their expectations, and explore potential tensions that might emerge
among them.

Stakeholders are individuals or groups of individuals that impact or are impacted by

what the company achieves. We can therefore split stakeholders into two categories:
internal stakeholders who work in the company and external stakeholders who do not
work in the company but still have an impact on its operations2.

The first group of internal stakeholders are employees, they are more than 1 000 at
Allbirds all over the world. They can be divided into three sub-groups: those working
at the headquarters in San Francisco, those working in the logistics warehouse in
Nashville, and those working in the 60 retail locations around the world.

The second group of internal stakeholders at Allbirds is the Board of Directors, which
is composed of 7 individuals, mostly members of venture capital firms that have
invested in the company3. The two founders of Allbirds, Joseph Zwillinger and Tim
Brown, are also stakeholders on their own, playing a prominent role in the day-to-day
running of the company.

Finally, the last group of internal stakeholders are investors and shareholders. Allbirds
has been public on NASDAQ since November 2021 and before that had raised US$50

1
Allbirds. (n.d.). Our story. Retrieved November 5, 2023, from https://www.allbirds.com/pages/our-story
2
Zicari, A. (n.d.). Responsible Leadership: Module 1 [class notes]. ESSEC Business School.
https://www.essec.edu/en/
3
Allbirds. (n.d.). Board of directors. Retrieved November 5, 2023, from https://ir.allbirds.com/corporate-
governance/board-of-directors
million. Investors and shareholders can be divided into three sub-groups. Venture
capital firms and business angels who have invested large amounts of money to
finance the development of the company. Long-term personal investors who have the
desire to keep their investment in Allbirds for some time. And short-term personal
investors who are investing to take advantage of the stock’s volatility.

When it comes to external stakeholders, the first group we can identify is clients, but
we can narrow it down into smaller groups to better understand their expectations.
In-store clients are those who buy shoes from one of the 60 retail locations all over
the world, while online customers are the ones who purchase through Allbirds' website
and have it delivered across more than 35 countries. Lastly, we have clients who
purchase from official distributors and do not benefit from the complete Allbirds
customer experience. All these sub-groups of clients could be further separated into
regular customers and new clients or by country location4.

The second group of external stakeholders are subcontractors and suppliers. At

Allbirds, all the manufacturing is carried out by a subcontractor in South Korea, which
employs over 1 000 workers. In addition to subcontractors, suppliers are also
stakeholders. Allbirds relies on wool producers who supply raw materials needed for
manufacturing, as well as others like electricity and water suppliers5.

Allbirds has also formed partnerships with several brands and artists that therefore
become stakeholders of the company. Some of these include Adidas, Just, City of
Sydney, and Tiffany Bouelle6. In addition, Allbirds' distributors are also stakeholders of
the company, the brand has hundreds around the world, including well-known
companies such as Amazon, In-Sport Fashions, and Nordstrom. We can also argue
that the brand’s affiliates are stakeholders, this includes influencers and all individuals
who promote the brand through their actions.

Finally, we have a last group of stakeholders who have a notable influence on Allbirds,
those are local communities, NGOs, government agencies, media, and future
generations. They are mostly small groups of individuals with local or national
influence, but they are essential to the company as they give a guideline for what to
do and what not to do. Notable examples are the local community of the factory,
NGOs like Greenpeace or WFF, and future generations who will benefit or suffer from
the company’s actions.

4
Allbirds. (n.d.). Our story. Retrieved November 5, 2023, from https://www.allbirds.com/pages/our-story
5
Allbirds. (2022). Flight Status 2022. Allbirds. https://cdn.allbirds.com/image/upload/v1682034443/marketing-
pages/23Q3-2022_Flight_Status.pdf
6
Allbirds. (n.d.). Partnerships. Retrieved November 5, 2023, from https://www.allbirds.com/pages/partnerships
Now that we have identified the different stakeholders of Allbirds, we are going to
identify their expectations.

The first group of stakeholders, employees have multiple expectations, but the two
most important ones are work/life balance and salary. However, with the labor
market becoming more and more tense, employees have growing expectations that
include reduced stress at work, high flexibility, and the desire to make a positive
impact. Similarly, employees of subcontractors also have expectations like respect of
human rights, good working conditions, and fair salary.

Shareholders and Investors on their side expect a return on their investment, this can
be done by the distribution of dividends or by an increased valuation of the firm that
enables investors to sell their stocks with capital gain. However, while financial return
may have been the only expectation of investors, this is no longer the case as
mentioned by Freeman in the first module. Indeed, more and more investors are
looking for companies with a purpose that goes beyond an economic standpoint. In
addition, shareholders and the board of directors expect managers to ensure that
the company is well managed on a day-to-day basis as well as transparency in
operations and reporting (financial and sustainable)7.

Clients also have multiple expectations from Allbirds, the most evident one is quality
which means a comfortable product that is made from qualitative materials. The
sustainable and responsible aspect of the brand is also very important considering
its positioning, clients expect that, when buying from Allbirds, they will have a positive
impact on the planet. But there a many more factors that influence the choice of a
client including pricing (should not be too expensive compared to similar products)
and design. In-store clients also have specific expectations like the attractiveness and
the location of the store (nearby parking and public transport), as well as the size of
the inventory and quality of the personnel. For online clients, an easy-to-use website
is primordial as well as a secure payment system, fast delivery, and respect for
personal data8.

Suppliers and subcontractors also hold expectations in their relationship with Allbirds.
They expect respect from the brand in the commercial relationship they have with one
another. Indeed, they tend to be highly dependent on one company and if this partner
stops working with them, consequences could be devastating. This implies that Allbirds

7
ESSEC Business School and Freeman, E. (2013, July 2). What is the stakeholder theory ? by R. Edward Freeman
[video]. YouTube. https://www.youtube.com/watch?v=epxmG3YRgok
8
Zicari, A. (n.d.). Responsible Leadership: Module 2 [class notes]. ESSEC Business School.
https://www.essec.edu/en/
treats its partners with fairness and does not exercise any leverage on them. On the
other hand, Allbirds expects its suppliers and subcontractors to be responsible in their
operations (respecting human rights, neutral carbon footprint, and responsible
purchasing policies)9.

Government agencies on their side, expect Allbirds to comply with the laws in place
in the country in which they operate. Ethical responsibilities, as highlighted in Carroll's
Pyramid, are also expected. Allbirds is likewise expected to adhere to financial and
accounting guidelines to ensure transparency in their public information.

Finally, NGOs and future generations expect that Allbirds will not hurt the environment
and lives of local communities. Even more, they expect from the company that it has
a positive impact on those matters and will serve as an example for others. Those
important matters include the preservation of ecosystems, respect of human rights
and local communities, and the use of responsible raw materials.

With such a wide range of expectations, that are often contradictive, it is inevitable
that tensions arise among stakeholders. Let’s identify potential tensions.

The first tension that we can identify is between socially responsible shareholders and
other shareholders. Allbirds is a brand that aims to make a positive impact on the
environment and set a new standard for the footwear industry. They achieve this
through the use of natural and sustainable fabrics and responsible production in
South Korea. Despite their efforts, this has a cost, and it leaves Allbirds with a lower
profit margin compared to its competitors. As a result, some profit-driven shareholders
may suggest cutting costs, which would reduce Allbirds' commitment to sustainability,
creating a conflict with socially responsible shareholders who value the environment
over profits10.

We could also anticipate tensions between local communities and Allbirds regarding
the factory's impact on the area. The creation of a factory is always controversial,
especially if it requires destroying residential areas or natural ecosystems. Such
actions would affect the local community’s living conditions, likely leading to increased
tensions with the brand.

9
Zicari, A. (n.d.). Responsible Leadership: Module 2 [class notes]. ESSEC Business School.
https://www.essec.edu/en/
10
Zicari, A. (n.d.). Responsible Leadership: Module 3 [class notes]. ESSEC Business School.
https://www.essec.edu/en/
Finally, other tensions could arise between employees and managers concerning
salary or working conditions. But also, between the brand and its suppliers if one
party tries to increase the price or vice versa.

In conclusion, Allbirds has various stakeholders, some of whom have a direct impact
on the company, while others have an indirect impact but are still crucial for Allbirds'
success. When identifying the different expectations of each stakeholder, it has
become evident that some may conflict with one another. As managers must take
care of all stakeholders, some tensions would likely emerge. It is therefore essential for
Allbirds to anticipate and prevent those tensions as one group of stakeholders, if not
satisfied can compromise the operations of the company.

[1038 Words]
 USE OF GENERATIVE AI

For this essay, I chose not to use any AI or generative tools like ChatGPT. I believe
that we had all the necessary information to do this essay in the different modules
we had to study and any additional information about Allbirds was available on
their website. As a result, I chose to rely on my own knowledge to have full control
over the content of my essay. I believe that not using AI will help me to stand out, as
it is likely that those who choose to use this technology will have similar content.

However, after writing the text, I checked it using the grammar and spelling checker
Grammarly. I also used a feature they added recently that suggests improvements
in sentence structure and syntax, which uses forms of artificial intelligence.
 SOURCES

Zicari, A. (n.d.). Responsible Leadership: Module 1 [class notes]. ESSEC Business School.
https://www.essec.edu/en/

Zicari, A. (n.d.). Responsible Leadership: Module 2 [class notes]. ESSEC Business School.
https://www.essec.edu/en/

Zicari, A. (n.d.). Responsible Leadership: Module 3 [class notes]. ESSEC Business School.
https://www.essec.edu/en/

ESSEC Business School and Freeman, E. (2013, July 2). What is the stakeholder theory ? by R.
Edward Freeman [video]. YouTube. https://www.youtube.com/watch?v=epxmG3YRgok

Allbirds. (n.d.). Sustainable practices. Retrieved November 5, 2023, from

https://www.allbirds.com/pages/sustainable-practices

Allbirds. (n.d.). Our story. Retrieved November 5, 2023, from

https://www.allbirds.com/pages/our-story

Allbirds. (n.d.). Partnerships. Retrieved November 5, 2023, from

https://www.allbirds.com/pages/partnerships

Allbirds. (n.d.). Board of directors. Retrieved November 5, 2023, from

https://ir.allbirds.com/corporate-governance/board-of-directors

Allbirds. (2022). Flight Status 2022. Allbirds.

https://cdn.allbirds.com/image/upload/v1682034443/marketing-pages/23Q3-
2022_Flight_Status.pdf

Allbirds. (2022). 2022 Annual Report. Allbirds.

https://ir.allbirds.com/static-files/01164458-e240-45bc-ab27-c363288ad2ae

Novet, J. (2018, December 14). Allbirds went from Silicon Valley staple to billion sneaker startup.
CNBC. https://www.cnbc.com/2018/12/14/allbirds-went-from-silicon-valley-staple-to-billion-
sneaker-startup.html

Kish, M., Tobin, B. and Dawkins, JO. (2023, April). What happened to Allbirds? The rise and fall.
Business Insider. https://www.businessinsider.com/what-happened-to-allbirds-rise-fall-2023-4

Treagus, E. (2023, March 4). Allbirds: The world's most comfortable shoes. Luxe Digital.
https://luxe.digital/brand/allbirds/