Snap Inc., formerly known as Snapchat, Inc. is a camera company that has three main products, the Snapchat app., the publishers’ tools that assist partners to make stories, and the spectacles, which is a type of sunglasses that make Snaps. The company advertises products through the Snap Ads and Sponsored Creative Tools, including the Sponsored Lenses and Sponsored Geofilters (Revenues and Profits 2017).
Evan Spiegel the co-founder and CEO of Snap, Reggie Brown the CMO and Bobby Murphy the CTO, co-created the idea of the “ephemeral social media”. It has stemmed from their college life to adapt to every day changing events. The images and videos disappear after the recipients open them. In the beginning, the teenagers represented the most important users of the app (Blaney et al. 2016).
Snapchat is a globally known as a mobile application that allows its users to communicate through sending and receiving disappearing images and videos. Also, users can create a story formed from a series of Snapchas that appears for only 24 hours. The business companies use Snapchat to promote their brand names to their stakeholders in funny and temporary ways. Also, they can use it to share information about conferences and for introducing new products (Code Conference 2015). The following section is concerned mainly with the analysis of Snap Inc. stakeholder.
The theory of stakeholder assumes that the stakeholder model clearly and simply delivers the stakeholder concept. It is gaining a growing importance in the stakeholders’ management practices. The stakeholder theory involves four different dimensions; the descriptive, the instrumental, the normative, and the metaphorical use of a stakeholder. The Freeman’s stakeholder model declares the linkages among the various types of actors in and around the organization. The model reflects a socio-gram that visualizes the degree of interactions among the groups of stakeholders. The model design involves input, processing and output, it assumes that any organization is related to 4 groups of stakeholders; the suppliers, employees, shareholders and the customers. This model considers the organization in a central position of a series of interrelated two-way relationships (Fassin 2009).
Figure 1: The shareholder model of Snapchat
Snapchat has five main groups of stakeholders including, the co-founders, the employees, the shareholders and the customers. There are other pressure groups, including the government, environments, NGOs, the media and the critics. Figure (1) represents the adapted version of the stakeholder of Freeman.
According to Andrews (1980), as cited in Pérez & del Bosque (2016), the organization contributes to four main groups of stakeholders. The stakeholder theory explains the reason behind the necessity of having non-financial goals for business organizations. It assumes that the organization should exceed the needs of its shareholders and consider the interests of the other groups, including the corporate social responsibility (CSR). This assumption could be linked to the Freeman adapted version of the stakeholder that considers the NGOs and environments. Although, other researchers argue that the strong relationships with the four main groups of suppliers, employees, shareholders and customers stem from the high financial performance (Wicks & Harrison 2017).
In 2008, the first several few months that witnessed the emergence of Snapchat, the app gained only 127 users. In the following months, they grew to 100 thousand users through the word of mouth. Lightspeed Venture Capital invested $485 thousand in 2012 on a valuation of $4.85 million that assures a success of the future of the app. The app continued to grow, its network of stakeholders also grew rapidly that enabled the company to raise $13.5 million through Benchmark Capital with a valuation of $70 million (Blaney et al. 2016).
Stakeholder analysis refers to the categorization and ranking of individuals and groups. They affect or could be affected by the organization. They represent the source of the requirements for a software production company. The customers should be treated as the end users of the product or service all the time. According to Mulla & Girase (2012), most of the software developers find difficulties in defining their stakeholders. It is important for any organization to understand its stakeholders to be able to take the right actions that suit each group of them. Stakeholders should be identified, characterized and classified according to their attributes. Every organization should make an environmental scanning to collect data that helps in stakeholder identification (Aaltonen 2011).
The accurate awareness of the organization stakeholders increases its potential success by influencing the stakeholders and responding to their requirements (Eskerod & Larsen 2018)
Regarding the Snapchat group of stakeholders, they are mainly its customers, employees, co-founders and shareholders.
The Savage’s typology classifies stakeholders into four groups and declares their associated generic strategies; ‘the supportive’ and its strategy is ‘involve’, ‘the marginal and its ‘strategy is monitor’, ‘the mixed blessing’ and its strategy is ‘collaborate’ and ‘the non-supportive’ and its ‘strategy is defend’ (Cetinkaya et al. 2011). Although, the normative approach argues that the stakeholder groups are an end for themselves. They are profitable to the company and should be classified in broader group ranges. The company main stakeholders are to be classified according to their economic relation to the company, but the other groups are to be classified in generic terms (Crane & Ruebottom 2011).
Snap stakeholders of the mixed blessing style are the customers, the cofounders and employees they represent a category of the stakeholders that are able to cooperate with the company and its competitors. For example: in some cases, there should be a collaboration with the competitors, especially in the R&D, the mixed blessing stakeholders should be collaborative in dealing with competitors. They are required to act according to the company interests. The collaboration strategy with stakeholders increases their dependence and decreases their intention to act against the interest of the company (Cetinkaya et al. 2011).
Snapchat targets users of younger age (13-34) years old, with 70% female. The major fashion houses use the app to promote their brand names that were highly appreciated by the consumer side. Also, big companies like JPMorgan used the Snap app to hire new employees from the colleges across the USA. These activities have resulted in an increasing engagement level through the collaboration strategy (Clayton 2017).
The co-founders of the company should continue to develop new products and add new features to the app in different operating systems, networks and devices (Snap Inc. 2017). This cannot continue in the future without collaboration. Regarding the employee, they need support and require to be increased in the areas that have potential progress. The Snap layoff strategy has affected its reputation and growth in the countries that showed low potential progress (Snap Inc. 2017). This implies that Snap could not manage the collaboration strategy in the international market.
The non-supportive stakeholders could be represented in the Snap case in the shareholders. They are ranked as the high potential threat to the company interests. The shareholders could be managed with a defense strategy. It mainly focuses on decreasing the dependency level on the non-supportive stakeholders (Cetinkaya et al. 2011). Accordingly, in order to avoid the threat of the shareholders who might sell their shares and result in a reduced price per share, Snap has to watch its financial progress and diversify its sources of funding in order to secure the company against the shareholders’ threat. Snap annual revenue growth in 2016, was 589.5%, while the software industry grew by 0.9%. Although, the company net margin was -127.2% in 2016 compared to 13.6% average net margin of the software industry (Revenues and Profits 2017).
Conclusions
Snapchat has five main groups of stakeholders including, the co-founders, the employees, the shareholders and the customers. Snapchat customers are individuals who like to communicate with their friends to have fun. The company uses social media just for fun and networking. The teens represent the majority of the app users, about 40% of the 18 years old in the USA were reported to use Snapchat daily in 2014.The shareholders of Snap can buy their shares directly from the company in the public sale to investors. The co-founders represent the key personnel essential for developing the software application. Their loss in the future highly threaten the company success. Snap attracts and retains highly qualified employees, including software developers, designers and product managers.
Snap stakeholders of the mixed blessing style are the customers, the cofounders and employees they represent a category of the stakeholders that are able to cooperate with the company and its competitors. The non-supportive stakeholders could be represented in the Snap case in the shareholders. They are ranked as the high potential of threat to the company interests
References
Aaltonen, K 2011, ‘Project stakeholder analysis as an environmental interpretation process’, International Journal of Project Management, vol 29, pp. 165–183.
Blaney, J, Dickenmann, J, Ferneini, G, Jagati, A, Powers, J & Schere, L 2016, ‘Now you see me, now you don’t: The rise of Snapchat’, Tufts University, USA.
Cetinkaya, B, Cuthbertson, R, Ewer, G, Klaas-Wissing, T, Piotrowicz, W & Tyssen, C 2011, Sustainable supply chain management, Springer, Berlin.
Clayton, S 2017, Social media strategy- Snapchat, viewed 2018 Aug. 2018, <https://www.elevatecom.com.au/blog-view/social-media-strategy-snapchat-83>.
Code Conference 2015, Snapchat’s three-part business model with CEO Evan Spiegel (2015 Day 1), viewed 2018 Aug. 2018, <https://www.youtube.com/watch?v=AqPHordzhdw>.
Crane, A & Ruebottom, T 2011, ‘Stakeholder theory and social identity: Rethinking stakeholder identification’, Journal of Business Ethics, vol 102, pp. 77-87.
Dave, P 2017, How much money Snap’s existing shareholders could reap in the IPO, viewed 30 Aug. 2018, <https://www.latimes.com/business/la-fi-live-updates-snap-ipo-how-much-money-snap-s-existing-1487274904-htmlstory.html#>.
Eskerod, P & Larsen, T 2018, ‘Advancing project stakeholder analysis by the concept ‘shadows of the context’’, International Journal of Project Management, vol 36, pp. 161–169.
Fassin, Y 2009, ‘The stakeholder model refined’, Journal of Business Ethics, vol 84, pp. 113–135.
ISO 2013, ‘Additional guidance from the TMB on stakeholder engagement’, ISO, Switzerland.
Lim, S, Quercia, D & Finkelstein, A 2010, ‘StakeNet: Using social networks to analyse the stakeholders of large-scale software projects’, Proceedings of the IEEE 32nd International Conference on Software Engineering, Cape Town.
Mulla, N & Girase, S 2012, ‘A new approach to requirement elicitation based on stakeholder recommendation and collaborative filtering’, International Journal of Software Engineering & Applications, vol 3, no. 3, pp. 51-60.
Pérez, A & del Bosque, I 2016, ‘The stakeholder management theory of CSR: A multidimensional approach in understanding customer identification and satisfaction’, International Journal of Bank Marketing, vol 34, no. 5, pp. 731-751.
Revenues and Profits 2017, Snap, viewed 29 Aug. 2018, <https://revenuesandprofits.com/snap/>.
Snap Inc. 2017, ‘Annual report’, Snap Inc., USA.
Wicks, A & Harrison, J 2017, ‘Toward a more productive dialogue between stakeholder theory and strategic management’, in Stakeholder management, Emerald Publishing Limited, UK
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