There are many decisions organizations make to drive a product from concept to customer. Stakeholders both internal and external can create a ripple that results in the need for innovation. The effect is felt when external stakeholders intentionally or unintentionally interrupt the process. Many times the company has no control over these influences. In this case, Macphie could no longer compete with their competition due to their new pricing strategies. In order for the company to survive Ronnie, whom led the sales and marketing team had to create a plan for innovative change thru differentiation.
A stakeholder is an entity that has a direct or indirect effect on an organization. …show more content…
It is important to access stakeholder power and support functions. It is imparitive to know how to to influence those that have great power over the organization and its functions as well as understanding the politics of the stakeholders (Kuratko, Hornsby & Goldsby (2013).
External Stakeholders External stakeholders are those that control or have influence over the company, usually outside of the company. Generally the most influential external stakeholder is the customer. External stakeholders usually have differing degrees of influence and objectives. They have power in varying ways. External stakeholders impose variables into the process, such as shipping costs, packaging costs, transportation needs, lifecycle, or consumer changes (Cagan, & Vogel, 2013). Some of the external stakeholders to Machphie were those who held the power over pricing of raw materials and functions involved in the supply chain. Other stakeholders which are common to most companies were government policy, environmental controls groups, economy, competition, public opinions, trade regulations, and economic shifts, international regulations and economic factors. All played an indirect or direct role in the company’s strategy. External …show more content…
This is what was happening to Macphie. Wal-mart is able to put pressure on suppliers to lower their costs that directly affect Wal-Mart’s profitability. Wal-Mart puts pressure on the suppliers by forcing them to lower costs to keep their contracts. This enables Wal-Mart to undercut their competition and in return gain more customers. Small companies cannot put the pressure on the supplies like Wal-Mart can, and their costs remain static (Ziobro & Ng 2015). In response to a similar issue, Machphie had to impose a reactive strategy of innovation by diversification. (Balas et al.