Understanding Stakeholders and the Importance of Value Added

Topics: Primary source, Marketing, Management Pages: 4 (1456 words) Published: March 18, 2012
“Stakeholders are always competing for a larger slice of the value added fund and satisfying all stakeholders is difficult when the business is competing in mature product markets”. Critically examine this statement and use contrasting examples.

The idea of stakeholders shall in this paper be defined as a “person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies.” (businessdictionary.com) They are essentially anyone with an interest in the company and may be divided into primary and secondary stakeholders. Primary stakeholders are people from directly within the firm such as employees, managers, shareholders, sub contractors, etc who may range for many miles across the country or even the world depending on how big the firm. Secondary stakeholders can be defined as anyone else who is affected by the firm such as people who live in the local area affected by traffic, pollution or an increase or decrease in business as a result of the firm. Different groups of these stakeholders compete against each other for the benefits of a company or firm which has reached the stage of a mature product market and, as a result, it is a challenge for this firm to ensure that all the stakeholders needs are met to a satisfactory level to ensure the safety and continuing growth of the company. Mature products by definition have reached the equilibrium at a specific price (p) and number (q). They are in the profit maximising position in the long run and will stay there unless there is a shift in price or quantity, supply or demand. As a result a company must constantly compete to stay relevant to the market. This includes decreasing product price, changing it in some way or adding other features, bringing out new products, staying at the forefront through advertising and providing resellers with motivation for continued buying. Once a business is in the mature...
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