Corporations depend upon the support of their stakeholders for success in the marketplace. In this lesson, you will learn about both the market and non-market environment of stakeholder groups.
It is very difficult to make everyone happy in your life. Your parents, significant others, friends, and teachers all demand attention in order to remain satisfied. Companies face the same challenge when dealing with their stakeholders, which are any person or group associated with the organization that has a stake in the organization's output. In this lesson, you will learn about the stakeholders of a corporation's market and non-market environments. A Big Thrill is the owner of numerous amusement parks nationwide. Let's use this company as a case example to identify market and non-market stakeholders.
A Big Thrill's market stakeholders contain employees, suppliers, customers, owners, and competitors. These groups are the primary stakeholders to A Big Thrill, as without their support, the company would immediately be in financial ruin. Each group offers essential parts of business help that A Big Thrill depends upon to succeed.
Owners/stockholders share in the profitability and loss of A Big Thrill. These stakeholders can influence the company's direction, business choices, and strategies through their votes and social influence. For example, the stockholders petitioned the board of directors to express their disapproval of a new park idea called 'Vampire World.' The stockholders felt it was a fad that did not have long-lasting profitability.
Employees are vital to A Big Thrill's corporate success. The company depends upon their employee support for daily park work and in regards to developing long-lasting trusting relationships. Many of A Big Thrill's employees also own stock as part of their retirement plans. Employees have a vested interest in the success of the company. Every employee donates their time to the community to help A Big Thrill's corporate image and customer reach.
Customers are a central focus of A Big Thrill's inventive theme park rides. The company values customer loyalty and looks to satisfy their needs. Consumer trends have been moving towards bigger and more extreme coasters. A Big Thrill values customer feedback and has integrated a new coaster called 'The End of The Road,' a ride which launches people so far and fast that they need goggles to protect their vision.
Suppliers provide A Big Thrill with the needed equipment, concessions, and parts to help satisfy customers. A Big Thrill has a network of suppliers that provide innovative rides, unique park food (deep-fried Twinkies), and cool technological games. Creditors, or financial institutions that loan businesses money, are also valuable suppliers of monetary support. A Big Thrill depends upon their relationship with Bank of USA for investment money to finance new parks.
Competitors are also considered part of market stakeholders as their actions can have a dramatic impact on A Big Thrill. Last month, A Big Thrill's biggest competitor dropped prices by 50% for one month, and the result was a huge decline in profits as ride enthusiasts visited the other, cheaper park. In some instances, competitors can support each other and the industry. A Big Thrill's other competitor partnered together with them on lobbying the government to not pass regulation to increase frequency of ride inspections.
A Big Thrill also has non-market stakeholders who consist of the media, community, government, and social groups. Non-market stakeholders are extremely important to A Big Thrill as they help support market stakeholder objectives through government regulation and community and social support. Let's look at how each non-market stakeholder group affects the company.
Societal groups provide support, guidance, and pressure to A Big Thrill to follow specific business suggestions. For example, PETA (People for the Ethical Treatment of Animals) has led protests outside their theme parks, which feature caged animal exhibits. PETA's demonstrations caused A Big Thrill to rethink their business safari parks and not keep animals caged for entertainment. Other societal groups, such as chambers of commerce, help A Big Thrill develop business-networking connections and gain customers.
New media also includes social media in regards to affecting A Bill Thrill's business model. Media can hurt or help the amusement parks, depending on whether the issue is good news or a problem. For example, A Big Thrill uses their social media presence to announce video footage of the new rides and distribute coupons to customers. In addition, social media has contained major complaints directed at their amusement parks for rides closing down, dirty environments, poor customer service, and disgusting food.
Government can also be looked at as both a positive or negative force for A Big Thrill to deal with during the business day. Government provides regulations that ensure customers are kept safe in the park. Regulations guide park inspections, ride enter and exit procedures, and even employee training. In addition, the regulation can help protect amusement parks as well from potential litigation if customers were to get injured.
Companies focus on providing satisfaction to all of their stakeholders. Stakeholders are any person or group associated with the organization that has a stake in the organization's output. There are two different groups of stakeholders:
- Market stakeholders include employees, suppliers, customers, owners, and competitors
- Non-market stakeholders consist of the media, community, government, and societal groups
Each specific group has influence on whether a company is profitable and ethical.
Following this lesson, you'll have the ability to:
- Define stakeholders
- Identify examples of market and non-market stakeholders
- Explain how both market and non-market stakeholders influence companies