5.4. Stakeholder Analysis

Every business is significantly impacted, both positively and negatively, by a wide range of internal and external interest groups. The basis of the stakeholder analysis is to ensure that the strategy accommodates the expectations of key interest groups, who will in turn be more likely to accept and support the strategy. If, on the other hand, the strategy conflicts with the requirements of key interest groups, the chances of the strategy’s success are drastically diminished.

The stakeholder analysis suggests, prior to setting the strategy, to evaluate whether or not there are any key interest groups, and if so, what are their exact interests or expectations and what this implies for the company – certain interest groups will offer opportunities while others may bring about risks. Typical interest groups include (Johnson, Scholes, 1993, de Witt, Meyer, 1994):

• Other Owners

• Management

• Employees

• Customers

• Suppliers

• Local Community – Residents, Local Government, Non-profit and Other Organizations etc.

• Political Representation and Others.

The company strategy should then not be in conflict with the interests of key stakeholders, nor should the strategy be based on conflicting interests.

Example: Nursery School

An entrepreneur gained the support of local council in a municipality with insufficient places in nursery school. The council was in favour of the initiative to found a commercial day care in the area, showing support for the project by securing a location for the school and providing marketing assistance. In this case, the business goals were clearly in line with the needs of the local council, which greatly facilitated the establishment of the day care.