Please enable JavaScript.
Coggle requires JavaScript to display documents.
Stakeholder Strategy and Competitive Advantage - Coggle Diagram
Stakeholder Strategy and Competitive Advantage
Value Creation
Occurs when companies with a good strategy are able to provide products or services at a price point that they can afford while keeping their costs in check
Thus, making a profit at the same time
Both parties benefit from this trade as each captures a part of the value created
As a result, society is better off
Companies with a good strategy generate value for society
When firms compete in their self-interest while obeying the law and acting ethically, they ultimately create value
Google
Stakeholder Strategy
An approach to strategy formulation that considers all of the company's stakeholders, not just its shareholders
A core tenet of stakeholder strategy is that a single-minded focus on shareholders exposes a firm to undue risks
Exemplifies how strategic leads can improve the firm's performance, thereby enhancing its competitive advantage and increasing the likelihood of its continued survival
Can increase firm performance
Can lead to greater organisational adaptability and flexibility
Can create more predictable and stable returns
Increased trust lowers cost of transactions
Satisfied stakeholders are more cooperative and thus more likely to reveal info that can increase value or lower costs
Firms can build strong reputations that are rewarded by internal and external stakeholders
Stakeholders
are organizations, groups, and individuals that can affect or are affected by a firm's actions
They have a vested claim or interest in the firm's performance and continued survival
Shareholders
Creditors
Employees
Community
Stakeholder Impact Analysis
While strategic leaders need to ensure that their shareholders achieve their desired ROI, at the same time they must recognise and address the concerns of other stakeholders ethically and fairly so that they too are satisfied
SIA
provides a decision tool that helps strategic leaders recognise, prioritise, and address the needs of different stakeholders, enabling the firm to achieve competitive advantage while acting as a good corporate citizen
Each step must pay attention to the crucial stakeholder attributes
Legitimate claim
Claim is perceived as legally valid or otherwise appropriate
Urgent Claim
When stakeholder requires a company's immediate attention and response
Power
When stakeholder can get firm to do something that it would not otherwise do
The Steps
Identify Opportunities and Threats
Identify Social Responsibilities
Identify Stakeholders' Interests
Address Stakeholders concerns
Identify Stakeholders