Company Purpose And Stakeholder Analysis Business Essay


Wonderland's history dates back to 1950s when it was started in Germany as a partnership business between a chemist and a child psychologist. These toys flooded the German and the Scandinavian markets in their initial years of launch. The market extended to cover the US and UK in the 1960s. Currently, the company enjoys the largest market share with its toys being available in more than 80 countries worldwide. The company is headquartered in Frankfurt and it has regional head offices in New York, Hong Kong and Buenos Aires. The offices in Frankfurt, Montana and Bute are dedicated solely to the creation of new toys to improve the company's brand. However, China, Taiwan, India, Korea and Honduras do most of the manufacturing works.

Wonderland has recorded admirable growth both in its scope of operation and in its revenues. In 2009 for example, the company recorded total revenue of €850 million from all its regions. In a bid to serve the customers even better, the company diversified its activities in the 80s and 90s to include other children's items such as school bags, board games and party items. The company has also employed more than 10,000 people who work in different centers. For instance, 3,000 people work in Montana while 2,000 work in Frankfurt. Others work in the local offices as marketers, sales representatives, retailers and distributors of the company's products.


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Wonderland has been very successful as a result of the contributions made by its stakeholders. These stakeholders are categorized into two divisions; primary stakeholders and secondary stakeholders.

Primary stakeholders

These are stakeholders who are directly affected by the company activities and vice versa. They include:



Customers and


Secondary stakeholders

These have interest in the company but their effect is not felt directly by the company. They include:

The government,



Lobby groups and

The local community


Company Purpose

The purpose of this company is to produce high quality branded children items and distribute them globally so as to reach our target customers and hence fulfill their educational and recreational needs.

Stakeholder analysis

Primary stakeholders

A) Shareholders

Shareholders are the owners of Wonderland Company. They invest their money in the company so as to propel it to achieving its objectives. Wonderland's shareholders are categorized into two: institutional shareholders and individual shareholders. Institutional shareholders refer to organizations that have bought shares in this company with the hope of realizing returns from their investment. Examples of such organizations might include Virgin Airlines Company and Sony International Corporation.

Individual shareholders, on the other hand, are the individuals who purchase shares of a given company with the aim of making profits. The founders are the major individual shareholders since they contributed the start-up capital. They possess majority of Wonderland's shares and have greater voting powers. In addition, the company has offered shares to other individual shareholders in Frankfurt (Turner, 2011).

Interests of shareholders in the company

Shareholders have a great interest in Wonderland, as noted above. They invest their money in the company with the hope of realizing returns in the short and long term. They are therefore concerned with the profitability of the company. Wonderland's managers have a great responsibility in ensuring that shareholders are contented with the performance of the company. When making decisions about the company, they ought to be very careful with the outcome since any loss made by the company will be felt by the shareholders. Managers ensure that both the short term and long term effects of their decisions are beneficial to the company so as to improve the value of shareholders investment.

Powers of the shareholder

In Wonderland, shareholders greatly influence the way it is operated. They decide who will be the company manager and who will be in the board of directors. Shareholders have voting rights on a variety of issues concerning the company. This means that the important decisions affecting the company, such as mergers, cannot be made without their consent. They vote for or against the proposal by the board of directors. Shareholders' decision in the company is final. Notably, managers cannot change what has been jointly agreed upon by the shareholders (Worthington, 2007).

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Shareholders also have the power to make by-laws of the company. By-laws refer to a set of rules and regulations that govern the operation of the company. All the employees of the company abide by these by-laws. Any violation of these by-laws is sanctioned and necessary actions taken. The company holds annual meetings with its shareholders to discuss and review the performance of the company. In this meeting, they review the company's accounts for transparency and profitability check. During these meetings, the appointed auditor presents periodic reports. Members have powers to either endorse or refuse to endorse these reports. Nonetheless, the powers of shareholders in Wonderland commensurate with the number of shares held in the company. For example, an individual shareholder with 1,000 shares in a company has more powers than the one with 50 shares. This means that if the majority of Wonderland shareholders have 20 shares and one of the shareholders has 1,000 shares, it will require the company to have 50 shareholders with 20 shares so as to match the voting powers of one member with 1,000 shares (Worthington, 2007).

B) Employees

Employees refer to the workers in a company. They are directly associated with daily operations and therefore determine the output of the company. They can be categorized into different levels depending on the nature of the company. They include individual contributors, professionals, managers and senior technical professionals, directors and company presidents. In Wonderland, each employee fits in his place in the organization depending on the level of education and skill specialization. In order to effectively achieve the objectives of the company, managers have a duty of ensuring that work is well structured so as to avoid collision of employees. Similarly, it is important for the managers to communicate the vision of the company so that employees work collectively towards achieving this vision (Shukla, 2006).

Interests of employees

There are various interests that employees have in Wonderland. One of the most important ones is having their fundamental rights respected. These rights include the right to remuneration, right to associate with others, right to fair treatment, freedom from discrimination and freedom of expression, among others. Therefore, they will be productive if these rights are honored and if they feel that they are being respected. To achieve this, managers need to cultivate a working environment that will compel employees to give their best so as to achieve the objectives of the company (Shukla, 2006).

Wonderland employees just like in any other company want to receive competitive pay. Competitive pay refers to the payment that is made to employees and that which commensurate with the employee's skills, level of education and motivation in the work place. They expect a pay that is consistent with the market rates (Shukla, 2006).

The company's employees also want to be given an opportunity to earn more. This is made possible by increasing their pay with time, paying them for overtime work and commissions where necessary. Another expectation of employees is regular review of their pay. This means that employees do not expect to stagnate in one pay scale. In addition, they need to be given a chance to participate in the decision making process as this will motivate them to work towards the enactment of these decisions (Shukla, 2006).

Employee powers

Employees have a great influence on the direction that a company takes. As highlighted above, managers, as the employees of Wonderland, are mandated to run the company. They therefore have powers to make decisions on the day to day running of the business. If these decisions are sound, the company stands to benefit. However, if they make misguided decisions, the performance of the company will deteriorate. It is the duty of Wonderland's human resources manager to hire junior employees to carry out middle and lower level activities of the company. If the human resources manager hires skilled and qualified people for this work, then the company will yield good results. However, if he hires under-qualified staff, Wonderland will not achieve its objectives (Shukla, 2006).

The motivation of the employees in the company also plays a big role in the achievement of the company objectives. It is the duty of the employee to carry out the decisions made by the shareholders and the top management. A positively motivated workforce will carry out its duties with passion thereby enhancing the realization of the goals communicated to them. Negatively motivated employees on the other hand may affect the reputation of the company by producing poor quality commodities. It is therefore the duty of the company managers to cultivate a participative culture where an employee will be free to communicate his feelings about the company (Shukla, 2006).

C) Customers

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Customers are the buyers of Wonderland's products. They are the end users of its product. They include the parents of children in pre-schools and primary schools. Throughout the manufacturing process, great care is taken so as to produce products that are competitive in the market and they that add value to the customer. It is important for the business to understand the behavior of its customers. Satisfied customers are pillars of any successful business. They also contribute to the reputation of the company if their needs are met as they desire. The customers determine the growth potential of a business (Akinnola 2011).

Accordingly, every business manager who has the desire to generate income from the business must strive to ensure that the desires of the customers are met. Though customers are not included in the decision making process of the company, they play a big role in enhancing the achievement of the set business objectives.

Interests of customers

The interest of the customers in Wonderland is to maximize the utility derived out of the consumption of its products. They want the company to meet their needs in a way that creates value for their money. In order to fulfill this demand, the company must ensure that they first survey those needs before embarking on production. Through this, the company will be assured of ready market. However, companies that go ahead to make production without consulting from the customers risk market failure (Akinnola, 2011).

Power of the customers

Customers have a greater influence on the success of the company than any other stakeholder. It is a known fact that the profits of the company are out of the customers' spending. If the spending by the customers is low, then the profitability of the company also declines and the opposite is true. The influence of the customers is so strong that managers must consult before making any decision affecting them (customers). In the toy industry, customer's tastes play a big role. It is imperative for the Wonderland to carry out a research so as to understand the tastes of customers in different parts of the world. Cultural influences also affect the customer's decision making process. As the company's products target different cultures, it is important to study these cultures so that the toys which will be produced meet the demands of these markets (Akinnola, 2011).

D) Suppliers

Suppliers are the firms and the individuals who deliver the resources that the company uses in the production of goods and services. Wonderland establishes specific suppliers so as to ensure consistency in the provision of the necessary resources. If resources are not supplied on time, production delays will be inevitable and consequently the customers will not receive finished goods on time. In establishing the relationship between the suppliers and the company, it is important to note that this relationship is based on value. Value in the sense that if the suppliers deliver quality resources, the end products will be of high quality and therefore goods delivered to customer will reflect value for his money.

Interests of suppliers

Suppliers are businessmen and therefore their main interest in the company is profits. The second interest of suppliers in the company is to secure a contract that will shield them in case the market fluctuates. Suppliers desire to be in business throughout the year. However, there are seasons when the prices go down making them to operate at a loss. Securing a contract to supply resources to the company means that the prices will not fluctuate and therefore the supplier will make profits all through.

Powers of the suppliers

Sometimes suppliers may join forces to dictate the terms of their supply to the company. This is especially in situations where suppliers are few and the buyers are concentrated.

When the supplier has a strong brand name, he may have greater influence in the company than other factors. Nonetheless, mutual agreement between the supplier and the company is required to ensure that a sustainable relationship exists. To neutralize these powers, Wonderland can contract for its needed resources in advance so as to prevent the supplier from misbehaving as the market changes.

Secondary Stakeholders

A) The government

The role of the government in Wonderland cannot be overlooked. Being an external stakeholder, it plays an important role in shaping the external environment within which the company operates. The roles of the government in the company are executed by a specially formulated agency that is answerable to the government. The main interest of the government in the company is to regulate its operations so as to ensure that consumers do not suffer loss as a result of business activities. The government therefore regulates the competitive practices, and the industry-specific practices. In addition to its regulatory roles, the government has powers over the Wonderland Company. It can revoke its license and subject it to legal actions in case its activities are not acceptable in the country where it operates (Enotes, 2011).

B) The media

Media plays an important role in Wonderland's growth. For example, the company will use media to reach out to the target customers. Media also creates a forum whereby the customers express their views about given company. The media can influence the image of the company among the customers and therefore influence their purchase decision. The company must therefore cultivate a positive relationship with the media so as to have a positive image in the face of its stakeholders. As far as Wonderland is concerned, efforts have been put in place and agreements achieved with Disney and children's TV programme producers so that the company will use the character of these programs in designing toys and accessories (Liss, 2000).

C) Competitors

Competitors are other important stakeholders in the company. The presence of competitors in the industry help in improving the quality of products produced and services rendered. The interest of the competitors in a company is to learn its weaknesses and capitalize on them. There is competition for customers as well as market share. Our company's managers therefore need to be cautious when disclosing information about the company that can be used by the competitors to the disadvantage of the company, especially in a market where there are many competitors (Carlson 2004). It is important for our company to take a survey of the market so as to identify competitors, their weaknesses and strengths. In the toy market, Wonderland faces stiff competition from Mattel and Hasbro. Both have been in the market for many years and therefore offer stiff competition to Wonderland in its bid to capture the promising markets all over the world. In addition, the two companies have strong brand names besides offering a variety of products targeting different customers.

D) Lobby groups

A lobby group refers to a collection of people who come together to advocate for certain interests that they feel are threatened by the decision made by the company leaders. In as much as lobbying affects the performance of the companies, it is one of the trusted means through which proper functioning of the businesses can be achieved. Environmental activists are examples of a lobby group that greatly influences the operations of Wonderland. With the issue of global warming taking priority, they seek to regulate the amount of carbon dioxide that the company releases in the process of modeling the toys. Their interest is to ensure that the operations of the company do not negatively affect the environment. Lobby groups have powers to influence the activities of the company. They can influence the consumers to boycott the products of the company. It is therefore imperative for the company to establish a positive relationship with the lobbyists so as to avoid instances of being accused for undertaking illegal activities (Hart, 2004).

F) Local community

When the company undertakes corporate social responsibility activities, its intention is to create a positive impact on the local people directly related to the company. In Wonderland, local communities are the people who surround the company. In case of harmful emissions from the company, the local community would be the first to receive the effects. Local communities offer the local infrastructure that the company needs in order to achieve its objectives. On the other hand, they expect the company to pay back by carrying out activities that do not adversely affect them. These stakeholders have powers to influence the company to either continue with its activities or to stop its operations. They are able to unite and stop the company from causing negative effects to the community (BusinessLink, nd).

The Global Society

Global society, in its most basic definition, refers to the society that is integrated together into a single community with improved levels of interaction. Global society is a consequence of the globalization process. Human beings are social by nature and would embrace any means that brings them close to each other. Courtesy of internet technology, people can communicate with other on the far side of the world just by a click of the mouse. Nonetheless, global society deals more with the individuals in the society than it does with the general society. It is the efforts of individuals that lead to the development of global society. The vision of the founders of Wonderland was to reach customers in all parts of the world. Globalization has speeded the achievement of this vision by facilitating prompt marketing and distribution of the company products. Generally speaking, global society has improved efficiency with which people in the society interact (Taylor & Francis, 2011).

Integrating the concept of global society into the operations of any business raises issues that are not consistent with the goals of the company. Some of these issues favor the accomplishment of the business objectives while others hinder this accomplishment. These issues include:

Cultural differences

Inequity in development

Environmental degradation

Human rights abuse

Government structures

1) Cultural Differences

Culture refers to a set of beliefs that a given group of people has adopted as their way of life. No culture is greater than the other and attempting to change people's culture is an effort in futility. Founders of Wonderland decided to launch their operations in areas with a culture different from that of the company's home country so as to be more competitive and more profitable. They also wanted to outsource raw materials from other countries where the cost of acquiring those resources are lower than in the home country. (Smith Ethel, 2007).

The most successful companies are those that have understood the cultural differences of target customers. These companies keep abreast of the importance of these differences and will research ways to fulfill customer needs without interfering with their cultures. Wonderland understands that people from different cultures might have different approaches to the same issues (Smith Ethel, 2007).

2) Inequity in Development

This refers to the differences in the levels of development in different countries. It is measured both in economic and infrastructural terms. Inequity in development affects the running of international companies. Factor endowment contributes more to this inequality whereby companies that are endowed with more resources excel better than those with fewer resources. With development inequality being experienced in the global society, it is hard to achieve a fair play ground where all companies can compete favorably. Also, as a result of differences in the factors of production, massive movement of labor from one country to another is affecting the operations of the company. For this reason, a difference in Wonderland's prices is justifiable. In countries where cost of operation is low, our products are low and vice versa. In general, companies operating in the global environment are as competitive as their resources can allow (Taylor & Francis, 2011).

3) Environment Degradation

Environmental degradation is another issue that global society has brought. The issue of global warming is being addressed and measures being put in place to combat global warming. The Kyoto protocol of 1997 that sought to regulate the percentage of carbon dioxide released into the atmosphere from the industries is still in discussion with companies being forced to adhere to the restrictions imposed by this protocol. Wonderland therefore checks on its processes to avoid legal actions from being instituted against it. Notably, in the toy companies, modeling plastics releases smoke into the atmosphere. Being part of the global society, the company will take measures to ensure that it honors this requirement (Taylor & Francis, 2011).

4) Human Rights Abuse

When operating in a global society, it is possible to unknowingly promote the abuse of human rights. Much business is done via the internet without necessarily knowing the processes that take place at the other end. For example, a company may order a product online. The supplier will send the consignment to the buyer. Without proper research the buyer may not know how this product has been manufactured. The supplier may have used child labor, which is in contravention of basic human rights. Wonderland will ensure that it chooses suppliers that do not engage in such activities.

5) Government structures in a global society

Another issue that Wonderland faces when operating in a global society is the difference in government structures. The structure of the local government where the company is located may be different from the structures of the other country. An example of this is where the local government embraces socialism economy and the foreign country embraces capitalism economy. Secondly, a government may be aristocratic while another one may be democratic. Operating in varying government structure may be difficult therefore companies will need to understand this from the outset (Taylor & Francis, 2011).