Stakeholder Management in Snapchat

The assignment content discusses Snap Inc.'s stakeholder management, focusing on public users, government, corporate customers, and employees. The company has been constantly working on engaging with stakeholders by following Corporate Governance guidelines. To connect with public users, Snap Inc. has applied strategies such as making the application free of cost, adding new features for enhancing utility, and reinforcing beliefs and thoughts over the platform. For government, the company has implemented defensive strategies like providing privacy disclosure agreements and engaging in CSR activities to gain a positive attitude. For corporate customers, swing strategies were used to allow long-term partnerships and collaborations with celebrities for social causes. Finally, for employees, a hold strategy was applied to retain key personnel by maintaining existing pay scales and encouraging new ideas and suggestions.

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Snap Inc. Stakeholder
Analysis

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Executive Summary
The current study is about the Snap Inc.’s stakeholder analysis. Snap Inc. has been a well-
known social media organisation that has been competing with some global entities such as
Google and Facebook. Over a period of 7 years since the incorporation, it has got immense
success to reach around 187 million people around the world.
With the growth, it has developed relationship with a number of people who directly or
indirectly influence or get influenced by the entity. These people (stakeholders) are the key
of organisational success at various aspects.
The report talks about the stakeholders of Snap Inc. entirely. At first, this highlights the key
stakeholders followed by the 4 important stakeholders who are categorised as per
organisation centric stakeholder theory. Finally, an analysis is done with these key
stakeholders and also some useful recommendation are provided to improve relation.

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1.0. Introduction
1.1. About the Company
Snap Inc. is an American multinational that is associated with majorly with social media
market. The Company came into existence in September, 2011. Evan Spiegel and Bobby
Murphy are the founders of this multimedia entity. The entity is listed with NYSE1 as SNAP.
The company offers multimedia tools such as Snapchat, Bitmoji and Zenly. Apart from that,
it diversified its business into lifestyle segment by offering Spectacles (Brand of Snap Inc.
that produces Smart glasses). (Etlinger 2016)
1.2. Stakeholders- A brief idea
Stakeholders for a corporation such as a public or private limited company refer to all those
persons, group and organisations that are having interest or concerns with an organisation.
Stakeholders can affect organisational policies, procedures, actions etc. and the entity can
also affect the stakeholders with the same. Stakeholder numbers depend on the scope of
the entity i.e. its business area. Some of common stakeholders are owners, shareholders,
employees, government, customer, creditor etc.
Stakeholders’ influence on entity and influence of entity on them are not same. The
relativity of influence depends on relationship (transactional, legal or social) of the entity
with the stakeholder. (Stafford 2016)
Stakeholder’s engagement is now becoming an important task because they can affect
business and reputation of the entity in the market.
2.0. Stakeholders of Snap Inc. (particularly for
Snapchat)
2.1. Who are the stakeholders?
Snap Inc.’s majority of the revenue comes from its social media application called Snapchat.
It is a mobile messaging application which is used for sharing photos, videos, text and
1 NYSE- New York Stock Exchange

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drawings. Recently, audio and video calling features have been added to make the
application platform as an alternative traditional telecommunication or video conferencing.
The application is “free of cost” and available on two most widely popular Operating System
Android Google and Apple IOS. Due to its wide utility, the application has been widely
acceptable among young population.
For Snap Inc.’s Snapchat, the stakeholders can be put as below- (Freeman 2001)
1. Founder/Board members
2. Shareholders
3. General public user
4. Government
5. Vendors
6. Corporate Partners- corporate customers
7. Community
8. Employees
2.2. Why they are important?
The above mentioned stakeholders are the important for the following reasons- (DeVries
2017)
Stakeholders Importance
Founder and board
members
Founders and board members are the drivers of the entity. They
hold the maximum shares of Snap Inc. so they are the major risk
takers of the entity. They formulate policies and strategies of
the entity. The entity’s success is highly dependent on their
planned actions. It is the reason why they are important
stakeholders.
Shareholders The entity is a listed company thus many retail investors have
bought shares through IPO2. So they have expectations of
getting good Return on Investment (ROI) from the entity. So
they are also important for the entity as they provide financial
2 IPO- Initial Public Offering- A process by which an entity offers shares of the company to general public for
getting minimum subscription to be listed in the stock exchanges.

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support to the company.
General public user A company is nothing without customers. Snap Inc.’s 99%
business depends on users of the Snapchat application. Their
interest, trust and usage of application allows the entity to
generate revenues from marketer on this platform. It is the
reason why they are important.
Government Snapchat’s application requires permission from the respective
regional government to run their platform. Even for taxation,
tariff, reporting and other legislation matters, the entity needs
to comply with respective government. Thus, they are
important.
Vendors These are the suppliers of software solutions and other
technological aspects to the entity. Without their support, the
application successful running is not possible thus they are
important.
Corporate
partners/customers
These refer to the advertisement agencies or the corporate
entities that use Snapchat as a digital advertisement platform. It
is popularly known as “social media advertisement.” They are
the revenue providers to the company so they are important.
Community CSR3 is now becoming a mandatory requirement for listed
entities. Every society or community expects something in
return from the entities who are utilising resources of society
and environment. Thus, they are important stakeholder for the
entity to prove CSR compliances.
Employees An entity can’t be operative without sufficient and efficient
workforce. They play an important role in entity’s growth and
expansion. Thus, they are important stakeholder.
These are the primary and the most influential stakeholders for the entity. These
stakeholders are also having their stakeholders such as vendors are having their vendors,
3 CSR- Corporate Social Responsibility is a mandatory requirement for all listed entity to contribute towards
societal development.

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advertisers and corporate entities are having their customers as stakeholders, board
members are having their professional relationship etc. who are indirectly related to Snap
Inc.
It can be looked as “system approach” where each of the components are interrelated to
each other.
3.0. Stakeholder Analysis
For the discussion on the stakeholder analysis, I am considering the organisation centric
stakeholder engagement theory (Freeman’s theory) under this case. (Freeman 2004)
According to Freeman, stakeholders of an entity falls in 4 categories which are-
1. Offensive
2. Defensive
3. Hold
4. Swing
3.1. Explanation to each category
Offensive
It is the stakeholder criteria who defines the stakeholders who seems to have highly
cooperative potential and relatively low competitive threat in bringing shareholder’s
cooperation. In simple words, stakeholders falling under this category are the one who
support the entity but at times they target the entity for some or other reason.
Considering the following nature or characteristics above, here the public user is the one
who can be categorised into this category. (Anderson 2015)
Defensive
It is the stakeholder category group who has highly competitive threat over the entity and
low cooperation potential towards the entity. Such stakeholders are not usually show a
positive approach towards the entity or they try to dominate over the entity’s business.
They may go with competitive strategies to defame or dethrone the entity in the market.

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I am taking Government as the stakeholder under this category who seem to be non-
supportive most of the time. (Poltash 2012)
Swing
It is the category of stakeholders who are inconsistent with the entity regarding their
relationship with entity. The stakeholders under this group are always sceptical in nature.
For this category, I am putting corporate partners or customers as the swinging
stakeholder.
Hold
It is the stakeholder category who are constant in relationship with the entity. They are the
one who are happy with the existing stakeholder engagement strategies.
I would like to put the employees under this category as the company scored top position
under “Most valuable employees as per market capitalisation criteria” among some of top
tech-giants. (Freeman 1994)
3.2. Behavioural analysis
Public User-They are the primary stakeholder group without which Snapchat has no
existence. Here the users are the people like us who use the social messenger application
for our day to day social connectivity. As of now the users of Snapchat reached around 188
million since its inception. The growth rate is now at 2.1-2.5% per quarter.
Around 74% of the Snapchat users are below 34 years old. 30% of the millennial population
are using this application regularly and users are spending 30-40 minutes time on an
average on this platform. This shows people are having strong cooperation with the social
media platform. However, with the emergence of WhatsApp, Facebook Massager and social
media application, decline in user number has taken place over last two quarters. (Boyd
2014)
As the new platforms have started providing similar features, threat of user number decline
seems higher.

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Government- Majority of the countries have allowed Snapchat application usage in their
region but many at times controversies over the application made government to take
negative behaviour towards the entity. The case of December 2013 hacking in Australia,
privacy and confidentiality issue with Federal Commission US, Poor country remark from the
CEO on India and Spain etc. are there which government targeted Snap Inc. to settle the
matter or leave the region. Even some governments supported other social media platforms
over and above Snapchat to send off it from the region.
Corporate customers- They are the one who move to the platform where the penetration or
customer reach is more. When Snapchat was in trend, many marketers and celebrities used
this platform to do their market campaigning. But, with the time the new messaging
application became popular and slowly some of corporate customers are moving to those
platforms. (Stelzner 2011)
Employees- Snapchat offers a healthy compensation to the employees of the entity which is
why over last 2-3 years, hardly any employee turnover took place. It takes the best talent
with best compensation package and also provides ample freedom and opportunity to
explore talent and skill. It is the reason why they are satisfied with current strategies.
3.3. Motives of stakeholders
Public user- They are primarily using this application in order to improve their social
connectivity and relationship with people. This platform is helping the people to connect
with them who are physically unapproachable. Even this is used to make new friends and
followers. These people do word of mouth to other people who may become future user of
Snapchat.
Government- Most of the region where Snapchat usage is allowed are because of
Government’s mission and vision of digital literacy across the region. Sometimes
government use the platform for promoting own agendas and plans.
Corporate customers- They primarily use this platform for market campaigning of their
product and services. By this, they target the users of Snapchat to become their customer.
This platform is believed to be cheapest platform of sales promotion as compared to
traditional medium. (Fuchs 2017)

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Employees- The employees expect a good pay structure, freedom of work and job security
majorly to satisfy needs. It is the reason why they join organisations such as Snap Inc. By this
they are improving their economic condition.
4.0. Stakeholder generic strategic program (Current)
Snap Inc. has been constantly working on the stakeholders’ engagement by following
Corporate Governance guidelines. Although a detail strategic actions are unidentifiable with
respect to the above mentioned stakeholders but a reasonable activities can be deduced
from the activities carried out by the entity.
Public user
Snap Inc. over the period of time have realised that people will shift to other social media
platform if any competitors come up with better features or utilities than Snapchat. Due to
low switching cost in social media, the bargaining power of user is very high.
For this offensive stakeholder group, two options are there-
1. Attempt to change stakeholder objective
2. Link the program to other areas which stakeholder find more suitable.
As the bargaining power is high, Snap Inc. has left with option-2 only. The strategies they
apply to connect with user are-
1. Making the application free of cost.
2. Adding new features for enhancing utility of the massager. (Lenhart et.al,2015)
Government
Government of different regions have been putting questioning over the privacy and
confidentiality issues of the Snapchat users. Many at times, they have imposed restrictions
or ban on application and data collection for the application.
For this defensive stakeholder group, only one option is left with the company i.e.
reinforcement of beliefs and thoughts over the application.
Strategies they apply-

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1. Privacy disclosure agreement with user shared with government.
2. Questionable contents such as terrorism, killing etc. reporting is done to respective
governments. (Heider et.al, 2011)
Corporate customers
Snapchat’s revenue comes from this source only thus they have a larger influence on Snap
Inc.’s business. They choose snapchat platform only when the user numbers are increasing
or the existing users are the target population of the entity.
To bring more corporate customers into Snapchat platform especially celebrity, they have
two options-
1. Change of transaction features
2. Inclusion of new service
Currently, the company is going with the following strategies-
1. Collaboration with celebrities such as sports star, movie star, politicians etc. to increase
user numbers on the platform.
2. To reduce the advertisement charges and provide more features to enhance
advertisement reach. (Srinivasan et.al,2011)
Employees
They are the executer of Snap’s strategies. Their importance in software designing,
development and execution are important. For them only one thing is required i.e.
monitoring.
The strategies they follow for this group-
1. Cash bonus on year ends.
2. Increase in pay scale every year.
3. Employee stake option and other non-monetary benefits.
5.0. Recommendation to improve relationship
For the Public User- Offensive Strategy

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 As the bargaining power of user is more and switching cost is low, the entity should go
for disruptive innovation strategy to bring any new feature or utility that competitors
haven’t brought yet. (For ex- Application of Artificial Intelligence (AI) in messaging such
as mood recognition of the user) (Freeman 1999)
 It should bring a lighter version of its main application because many users feel the
original application a very high size software.
 It should bring web-version of Snapchat sooner as hardly any other social media
platform has been giving that facility.
 It should focus on low-data network areas with incremental innovation.
For Government- Defensive strategy
 Allow the Government to utilise the platform for promoting public schemes and
services.
 Help the government in tracking malicious and illegal activities over the platform.
 Make an agreement of data privacy and confidentiality of users with government and
disclose it publically. (Wortham et.al,2013)
 It should engage more in CSR activities for gaining positive attitude of government.
For Corporate Customers- Swing strategy
 Allow Long term partnership corporate customers into the platform to avoid
volatility of revenues. (Pagliery et.al,2014)
 Allow the small and medium scale enterprises to open up their pages or accounts
(corporate accounts) to promote their product and services at low cost.
 Collaborate with celebrities for social cause and market campaigning.
 Provide creative space (designed by self) for the corporate users to enhance their
ads.
For employees- Hold strategy
Keeping the existing pay scale and encouraging employees to bring new ideas and
suggestions will help to retain key personnel. Apart from that it should start focusing on
employment generation at all its operational space.

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