Understanding Stakeholder Analysis And Its Importance For Business Success Is Crucial For Essay.

You are required to watch the YouTube Clip Snapchat's three-part business model with CEO Evan Spiegel: https://www.youtube.com/watch?v=AqPHordzhdw You will also need to perform your own research on Snap Inc. You must then prepare a Snap Inc. Stakeholder Analysis & Strategy Program Report including an Executive Summary and a Conclusion and using the following headings:

A. Snap Inc. Stakeholder View of the Organisation Model

Prepare a diagram with Snap Inc. as the central organisation surrounded by the company’s stakeholder groups using the stakeholder view model

For each stakeholder group identified in the stakeholder view model research Snap Inc. further and prepare a list identifying and describing the specific stakeholders within each stakeholder group

B. Stakeholder Analysis for four selected stakeholder groups Select four specific stakeholders and analyse their behaviour and motives

C. Stakeholder category identification and generic strategic programs for each of the four selected stakeholders

Identify the stakeholder category that each of the four stakeholders belong to and list the generic strategic programs available for managing each stakeholder

D. Recommended strategic program for each of the four selected stakeholder groups including reasons for recommendations

Recommend a specific strategic program for each of the four identified stakeholders that are consistent with one of the generic programs identified in section C.
 

The stakeholders of the organization

A Stakeholder is a person or a group having its personal interest in the organization. They have a stake in the organization. The stakeholder view should be given importance. Stakeholder analysis is a technique which is used by the organization and this helps to identify the various people, groups and institution that influence the growth and success of the project. The organization at the beginning of the project analyses the stakeholders and their interest in the project (Blumenthal et al. 2014). The stakeholder analysis helps the organization in assessing a project and to determine the possibility of negotiation of the project.

Identification of the stakeholder view model

Promoters: The promoters in the organization are also the stakeholders of the company and they have high priority to the reform policy. They are the owners of the organization who have an impact on the implementation of polices in the organization (Koloc et al. 2016). 

Defenders: They have a high priority over the organization but their actions do not have any direction implementation on policies of the organization.

Insiders: They are the shareholders or the employees of the organization and they have a direct interest in the working of the organization. The organization makes any decision upon consultation with the shareholders (Huchu 2016)

Outsiders: They are the suppliers, customers, Government agencies, who do not have direct stake with the organization they have overall impact on the organization.

Distribution of stakeholders as internal and external to the organization

Topic 1: The stakeholders of the organization

Source: (Brinkerhoff 2016)

There are three models of stakeholder’s analysis which states why a stakeholder is essential for the business organization .The three models are as follows:

1. Descriptive Value: This model describes what an organization is. It is the combination of cooperative and competitive interest which has an intrinsic value. It describes an organization, how they work and their impact on the organization.

This theory helps the management of the organization since it helps the managers to connect with the shareholders as it is helpful for the business having the stakeholders category who are the Government, regulators and the policy makers, financiers and also including the NGO’s involving stakeholder association and trade union of the suppliers or distributors.

1. Instrumental Value: In this model, the stakeholders who are managing the business organization shall help in achieving the business goals, profitability and sustainability. They help in reaching the business targets (Paynter and Berner 2014).

This helps in the increase of profitability and the sustainability of the organization. This model explain how there is a connection between managing stakeholders and then reaching the target and the stakeholder who plays a important role are  shareholders, business partners, the past generation and the future generation(who are founders of the organization). 

Normative Value: It has a presumptive approach that the stakeholders have a inherent value and this explains the theory that the stakeholders have a legal stake in the corporate entity.

Three models of stakeholder analysis

This model consists of the group who plays a vital role in the success of the organization. The stakeholders in this model include the suppliers, customers, employees’ communities and the shareholders and the managers (Bardach and Patashnik 2015).

The stakeholder analysis is as follows:

Owners: The owners in Snap Inc are the ones who not only own shares in want of return but also want control as well. The owners are the management, they worries about paying dividend to the shareholders or increases the equity per share of the shares. They want the earning price per share to improve so that the company is not vulnerable to take over bids. If the P/E ratio is high then this is needed for long term investment.

Customers: In the organization Snap Inc, in the initial times the businesses were dominant worldwide, but with the changing scenario, the customers have many choices to make and therefore the choices have changed for both industrial as well as consumers product (Ali-Babiker et al. 2015). There have been new standards of quality and thus the customer relationships have changed drastically. They have concentrated on the designing and producing the same product and less on innovative product. The customer will now come to foreign competitors who emphasizes on the quality of the product.

Employees: In the recent times it has been seen that there is an unusual drop in the productivity of the business of the companies. The actual cause could not be detected but it was assumed that the reason behind such thing is that the relationship between the employee and manager which have decreased a lot. Many employees claimed that the approach of the managers should be less authoritarian and more human so that they can participate in the working of the business. It is important for the management to manage the culture and shared value of the employees (Schwartz 2017). The companies shall focus on a style which emphasizes on giving importance to the employees. Thus the changing employee relationship should be understood by the business. The employees are often the shareholders, customers and members of specialized group therefore it is vital to maintain a good relationship with the customers.

Suppliers: Suppliers and business partners have become more critical stakeholders in the early 21st century. The suppliers play a vital role for the organization Snap Inc. They are the major stakeholder of the company and the sales of the product of the companies and the profit of the business is dependent on the suppliers of the company. The suppliers help in the marketing of the products of the company. They are the provider of raw materials which the company uses to produce the product. The suppliers also provide the finished goods. Thus they are called the external stakeholders of the company (Moths 2014).

Stakeholders categorized as internal and external

The Stakeholder engagement is defined as a process which many organization uses and it helps in the engagement of relevant stakeholders and this is used for the purpose to achieve the appropriate outcomes of the business.

Topic 2: Stages of Stakeholders participation

Source: (Hicks, Allen and Wright 2015)

The stakeholder theory is important for describing the management for many years, although there was no theoretical approach. In the 21^st century in order to cope up with the changing environment and to cope up with the uncertainty faced by many industries, the business executives are trying hard so as to effectively manage the stakeholders. The stakeholders are those groups of individuals who have the capability to influence in the organization (Wyker, Jordan and Quigley 2014). It is stakeholders who cooperate with the organization for optimum outcome.

The stakeholders who are the internal to the organization are the competitors, employees, shareholders and the prospective employees, investors. The external stakeholders who influence in the function of the organization are the suppliers, Government, industry trade groups, labor union, and professional associations, local and national communities (Balser, and McClusky 2015). The company has divided the stakeholders into two parts, named as internal and external stakeholders and they influence in the growth of the organization. In order to grow the organization it is vital that all the stakeholders participate in the affairs of the organization. It is crucial for the organization to communicate with the stakeholders so as to have well formed knowledge of what is going in the organization. The organization has major stakeholders and it is differentiated by the organization.

The organization Snap Inc have concentrated much more in the development of the stakeholders theory hereby emphasizing and explaining how a organization functions and how it influences the exiting environment in which it work. The strategic generic program as defined by Michael Porter is used for stakeholder category identification and this is divided into three categories which are cost reduction, differentiation and focus strategy.

Firstly in the cost reduction strategy, the company gets benefited by using the concept of competitive advantage that the entity has over the products. In this case the suppliers and the distributors get benefited since they are able to sell a huge quantity of materials at a reasonable cost. Thus the company has advantage over the competitors.

 Secondly the strategy as identified by Porter in the differentiation strategy where variety of products is created by the company so that it is valued by their customers and is better than that of the customers. Thus this strategy focuses on the customers and the buyers in the economy. This strategy followed by the company help the customers to have confidence and trust over the company.

Importance of stakeholder satisfaction for business success

Lastly, the focus strategy helps the companies to win over the employees and the owners, suppliers and buyers. This strategy help to generate profit higher than the usual profit margin by focusing or entering into a narrow market segment where the products are sold to a particular class of people to satisfy their needs and thus at last it helps the company to survive and sustain during the time of crisis. Thus the strategic generic approach to the stakeholder is an effective tool in the analysis of each of the stakeholder group in the organization

It is the key stakeholders who have an influence and play a role in the success of the organization. It is thus important to see that the stakeholders are satisfied or not since if the stakeholders are contented with the organization then it can help in the success of the organization. The project is only successful and sustainable only when it meets the expectation of the stakeholders. Thus the strategies of the organization should be based on the technique which will help the stakeholders to benefit the organization (Ireland, Hoskisson and Hitt 2017).

When the company plans a strategy, the organization involves the stakeholders in the decision making process. The organization communicates, cooperate and associate with the stakeholders. 

The strategic program shall include as follows:

• The company analyses the degree of importance which is given to the specific shareholders and how much initiative is taken by them. The organization shall give priority to the needs of the stakeholders so that there is no conflict between the stakeholders (Loritsch et al.2015)
• It is important for the organization to influence the power of the stakeholders so as to detect the success and failure of the initiative taken. The potential of the stakeholders to influence the implementation of the project in the organization is crucial.
• The influence on the stakeholder is determined through the matrix or the flip chart and then classification of the shareholders is crucial depending upon the factors:

1. Power and interest
2. Power and influence
3. Influence and impact
4. Power, urgency and the legitimacy

Topic 3: The Influence of the people

Source: (Axelsson, Melin and Lindgren 2013)

The ways of developing the stakeholder’s analysis are as follows:

The attitude of the stakeholders is important to determine the success of the project. This is crucial for the stakeholders to determine how they influence the project. The four types of the tools are as follows:

• Identification of the key stakeholders and their positive and negative impact on the organization
• Accessing the importance and the influence each stakeholder posses impact on the organization
• Identification of the best way to engage he stakeholders which is dependent upon the  more impacted upon or the less impacted upon information of the stakeholders

The Recommendation is as follows:

The above generic strategic program as determined by Porter is helpful for the company and to differentiate the stakeholders group. It is seen that in case of the focus strategy, the owner or the management of the company is affected and they are benefited since the niche market helps to create advantage when the product which is sold for a particular class of people and the company is able to focus on the particular segment and generate profit which is comparatively higher than the rest of the products. The target market for this strategy is a particular class of consumers who are availing the products of the niche market. 

In case of the differentiated strategy when the company is creating different product for different segment of people since they are producing different products it will be helpful to the consumers or the buyers who will be attracted to purchase different product from the company. This will in turn help the company to have hedge over different market and product life cycle.

Three strategic programs for stakeholder category identification

The last strategy which is also called the cost leadership or cost reduction strategy is used for generating competitive advantage over the products, since there is competitive advantage over the products; the company is able to sale high quality goods at a low cost. This strategy will help the company to sustain even in the bad times and thus helps to invest in more business throughout the year

Conclusion

In order to conclude we can see that Snap Inc has prepared a stakeholders  and strategy report which will focus on the various stakeholders who have influence over the organization and their contribution is central to the organization the company has thus divided the stakeholder into four parts who is important who the growth and sustainability of the organization. Thus the organization has concentrated on making strong individual stakeholder relationship. The stakeholder theory is much advanced and descriptive and it covers all the internal as well as external shareholders who are crucial for the development and growth of the organization. It is seen that the stakeholders’ decision have a huge impact on the organization and the strategies made determine which stakeholder to be chosen 

References

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