Figure: Snap Inc. Stakeholder’s Model
Source: Created by author
Stakeholders of Snap Inc are
The number of employees in Snap over different branches of the company is over 1800. The company affects the employees by the policies of work, culture, and profit and job security of the company.
The company’s revenue comes from the lenses, application users, spectacles, Looksery Lenses and from broadcasting the content generated by Snap Inc. The suppliers are the web development teams (Snap.com 2018)
The investors are the shareholders of Snap Inc, at NYSE, The financial institutions investing on a huge amount for the company. The asset management company of Fidelity, Blackrock Inc., have invested in the company. Bobby Murphy is also one of major shareholders of Snap. The largest shareholder of Snap is Imran Khan, T. Rowe Associates Inc. and others including 22 million shares. BenchMark and Lightspeed Venture capitalist is also an important investor in the company.
The four selected stakeholders are
Customers – the customers are one of the essential parts of a company. They are in the centre of the business’s revenue model. The customers are the point where they are the focus of the business model too. The product purchaser has the most important stake in the business (Donaldson and Preston 2011). The main concerns that a business must rely on the price of the products. Customers want the value of money they are investing in their product. Therefore, the value proposition to the customers must be the main objective of the company. The products must satisfy the need of the customers. Snap Inc (Snap.com 2018). has different revenue stream, one of them is the smart glass spectacles, which is a major revenue generator and the tech savvy people in all over the world buys the product online. The other services that the company sells are camera lenses. The snap chat is has become the most important communication app after face book and Twitter. The comic internet content is also a revenue generator whose customers are the enthusiastic app savvy youth. The application and tech savvy millennial are the main customers of the company.
Investors
The venture capitalists that have invested in the company comes under the internal stakeholders. Their main motive is to double their invested capital by the end of the contract. The financial performance of the company is their main interest. Simultaneously the shareholders of the company are also the one that invest to rip profit from the investment. Evan Spiegel is the owner of Snap Inc. and the co owner is the Robert Murphy. They have acquired the many businesses over the years and became public in the year 2016. The major stockholders are the two of the co owners with 45% stock. Secondly, BenchMark and Lightspeed Venture collaborates. The Other major institutional investors are T. Rowe. Coatue Management and LLC who has 22 million shares. Vanguard is also a stock market Index fund (Beauchamp et al. 2014).
Employees
The employees are the major stakeholders of a company. It is of highest priority if the company wants to thrive. Managing the employees, as they are the developer of the company’s products and services. Making the decisions which is of interest of the business is one of the most important part of the individual employee’s job. The concerning aspects of the company are the salary, job security, Job culture and the profits they make according the pay structure (Harrison et al. 2015). The Payment or the salary is the only motivation for the employees. The compensation structure of the company is also a major component of the company. The job security is also a major motivator for the employee. If the business belongs to a risky situation or the shareholders suspects the volatility in the business, then the long term employees would prefer to change the job (Crane and Matten 2016).
Owners and partners
Evan Spiegel is the founder of the company being only 26 years old and an innovator of the world known app. The co founder and the recent chief technical officer is also a major partner in the business. Both of them started Snap chat and own 45% of the stock in the business. Other important personnel in the business is Michael Lynton the chairman.
The stakeholders of Snap Inc. are the interested parties of the organisation. Snap’s stakeholders can be divided in two broad categories that are internal stakeholders and external stakeholders. The internal stakeholders who are directly related to the company and the externals are that related but indirectly to Snap Inc. The internal or primary stakeholders who are related to the company with a economic transaction (Crane and Matten 2016). For example, customers, suppliers, creditors and employees. The secondary stakeholders who are not engaged in a economic transaction. For example, the communities, activists group, business support groups and media (Mansell 2015). Other part of the stakeholders is excluded stakeholders, who does not have vested interest in the company.
According the stakeholders theory, anyone who are directly or indirectly affected by the business objectives then they can be identified as the stakeholders. The stakeholders influence in the business strategy depends on the level of stake they have in the business. The stakeholder’s relationship management decides the level of power they have in the business. The managers in this function are the key persons to manage and satisfy the business. The three approaches to stakeholder’s management are normative, descriptive, and instrumental (Beauchamp et al., 2014). The Normative approach relies on identifying the philosophical guidelines to activities related to management of corporation. The Descriptive approach is how the managers should deal with the managers and instrumental is depended on studying the consequence of management. The offensive strategy of the companies engages in the competition. This strategy is also depended on aggressive takeover of market share of the company. According the author Freeman (2014), the offensive strategy is in support of the internal stakeholders like customers, employers, suppliers and managers. This treatment is to influence the stakeholder’s decision or influence the decisions according to get them cooperate with stakeholders. Defensive strategy considers regarding the reinforcement of the current beliefs in the stakeholder’s as well as letting the stakeholders drive the integration process (Beauchamp et al. 2014). Swing strategy suggested the cooperative or threatening stakeholders are one of the swing categories that can either help or hinder the organisational activities. Hold strategies take into account the stakeholder’s engagement process should be of less important and the company should hold on to the current strategy that they want to apply. They should stick to it.
Snap chat has gone through a rather tough phase regarding the stockholders equity. They reported a 2.2 billion loss in the quarterly. The organisation should try to go for positively influence the stakeholders to minimize the threat. Fending off the potential competitors and encirclement strategy is taken to minimize the negative outcomes. This strategy can retain the present shareholders after the report of huge loss. They also have faced a rather complicated situation from the former marketing officer Reggie, accusing them to steal his idea of Picaboo. They also faced the complicated situation in the lawsuit because of the allegation by them.
Integrating the process as well as consolidating all the existing process is function of the stakeholder managers. Therefore, they should also consider consolidating all the process to defend them from negative outcome. As Snap reported that the occurrence of loss in the business and devalue of 20% of its stock value the company faced tremendous loss in the shareholders society. This value degradation of the company reputation among the shareholders and institutional investors affected the organisation. Therefore, the defensive strategy can be suggested for the company. Being defensive will fend off the competitors like Facebook, Twitter and other messaging app. As the CEO’s plan is also to service people on the basic functions of messaging and communication they should also use the hold strategy to enhance and retain the current customers of the company. The CEO’s plan is also to service their 20 million of customer base in music too, here they can also use the swing strategy for the cooperative stakeholders in US as well as in UK. For the threatening stakeholders can also eliminate during the process.
Three part of the business are camera, communication and spectacles. They stakeholders comes from that part of the business therefore they may categorise each stake of the business and proceed to satisfy them in their related stakes. For Example, if the camera gives more feature, the selfie-obsessed millennial may be more than happy to use the feature.
References
Beauchamp, T.L., Bowie, N.E. and Arnold, D.G. eds., 2014. Ethical theory and business.
Blowfield, M. and Murray, A., 2014. Corporate responsibility. Oxford University Press.
Bobby Banerjee, S., 2014. A critical perspective on corporate social responsibility: Towards a global governance framework. Critical perspectives on international business, 10(1/2), pp.84-95.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Donaldson, T. and Preston, L.E., 2011. The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of management Review, 20(1), pp.65-91.
Ferrero, I., Michael Hoffman, W. and McNulty, R.E., 2014. Must Milton Friedman embrace stakeholder theory?. Business and Society Review, 119(1), pp.37-59.
Freeman, R.E., 2012. A stakeholder theory of the modern corporation. Perspectives in Business Ethics Sie, 3, p.144.
Freeman, R.E., Wicks, A.C. and Parmar, B., 2014. Stakeholder theory and “the corporate objective revisited”. Organization science, 15(3), pp.364-369.
Harrison, J.S., Freeman, R.E. and de Abreu, M.C.S., 2015. Stakeholder theory as an ethical approach to effective management: Applying the theory to multiple contexts. Revista Brasileira de Gestão de Negócios, 17(55), p.858.
Mansell, S., 2015. Book Review: Rejoinder to Veldman’s review of Capitalism, Corporations and the Social Contract: A Critique of Stakeholder Theory (Vol. 22, No. 2, pp. 271-275). Sage UK: London, England: Sage Publications.
Snap.com. (2018). Snap Inc.. [online] Available at: https://www.snap.com/en-US/ [Accessed 6 Jan. 2018].
YouTube. (2018). Snapchat’s three-part business model with CEO Evan Spiegel (2015 Code Conference, Day 1). [online] Available at: https://www.youtube.com/watch?v=AqPHordzhdw [Accessed 6 Jan. 2018].
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