What Is Stakeholder Analysis in Product Management and What is the Process?

When a product transforms from an idea to something tangible, many individuals are part of that journey: customers, coworkers, leaders, partners, and sometimes even people who rarely contribute in meetings but impact important decisions. 

You may live in a fog during this process because all these people have ambiguous expectations for the product. 

This is where stakeholder analysis comes into play. Stakeholder analysis helps sort through who is involved, what they care about, and how those expectations affect your product. 

Instead of speculating about what various groups want, you will know whose opinions matter, where the obstacles may be, and how to help everyone stay focused as the product moves forward.

Simply put, it is the homework that all product managers do to build trust, reduce friction, and improve their decision-making from day one.

What is Stakeholder Analysis in Product Management?

Stakeholder analysis is the process of identifying, understanding, and engaging with all individuals or groups connected to your product and the role they play in shaping its success.

These people may be customers, engineers, designers, leaders, sales teams, or anyone whose opinions, decisions, or pain points influence how the product is built and used.

The goal is simple to know who your stakeholders are, what they care about, and how much influence they have.

When you map this out, you reduce misunderstandings, avoid surprises, and make decisions that balance both business needs and user expectations.

It isn’t a trend or a complex framework, just a practical way to bring clarity to the human side of product management, which often matters as much as the product itself.

In product management, this process aids you in figuring out answers to three critical questions:

1. Who are my stakeholders?

Anyone who influences your product or is influenced by it.

2. What do they expect or care about?

Their goals, concerns, and what successful outcomes mean to them.

3. What influence do they have on strategic decisions?

Some provide strategy, some provide feedback, and some illuminate risks that you may not consider.

Mapping this out prevents surprises, minimizes misunderstandings, and helps make decisions that balance user and business needs.

It is not a new and exciting framework, but just a means of getting clarity around the people's side of the product, which often takes the most work.

What are the Objectives of Stakeholder Analysis in Product Management?

The main objective of stakeholder analysis in product management is to make it clear who has an impact on the success of your product. 

It helps you figure out who your stakeholders are, what they want, and how their priorities affect choices made throughout the life of the product. 

You can avoid misunderstandings, delays, and make choices that are good for both the business and the user by figuring out their interests, concerns, and influence early on. 

The objective is to get everyone on the same page, build trust, and make product development go more smoothly with less disruption.

1. Identifying Project Stakeholders

The process of stakeholder analysis identifies all relevant internal and external stakeholder groups that may have an impact on the project, or that the project's outcome could impact. Identifying all relevant stakeholder groups ensures that none of the key players for the project are missing from the stakeholder analysis.

2. Determining Stakeholder Importance

Unfortunately, the amount of influence and interest of stakeholders in the project varies widely. The process of stakeholder analysis assists in determining which stakeholders have the most influence and interest in the project. This prioritization of stakeholders is essential for making effective resource allocations and for developing an effective communication plan.

3. Gaining an Understanding of the Stakeholder Interests and Needs

The Intent of Stakeholder Analysis is to Identify and Understand the Interests, Needs, Expectation & Concern of Each Stakeholder. A stable understanding of all stakeholders is Necessary for the Creation of Strategies to Satisfy Stakeholder's needs and avoid Conflict between Stakeholders.

4. Mapping of Relationships between and among different Stakeholder Groups and Understanding the differences in Interest, Need, & Expectation

The analysis maps the relationships between the different Stakeholders and facilitates Understanding of this Mapping Process. This allows Project Managers to See conflict, collaboration, or competing interests among Stakeholders.

5. Utilizing Information to Support Decision-Making

Stakeholders are a Critical source of information for the Decision-Making Process. Project Managers can Use Stakeholders to aid in their Decision-Making Process by Collecting relevant information, therefore, making good decisions for the Success of all aspects of the Project.

6. Creating a Communication Strategy

Active Communication is Critical to Successful Stakeholder Engagement. The Review of Stakeholder Analysis will Allow Project Managers to Create Communication Strategies Appropriate for Each Stakeholder Group based on the Timing and Formats, with the Objective of ensuring Stakeholders will Receive the Information Needed in a Timely and Satisfactory Manner.

7. Minimization of Risks & Maximization of Opportunities

Stakeholder Groups Relative to each other Create Opportunities and Risk for Each of the Stakeholders. Identifying risks to Stakeholders through Stakeholder Analysis enables us to create Strategies to Minimize these Risks, but, at the same Time, Enables us to Identify Opportunities for Collaboration and Development of Support for these Stakeholder Groups.

8. Understanding and meeting the needs of stakeholders

It is essential in order to gain the stakeholder's support for the project and to overcome any issues that arise during the completion of the project.

Why is Stakeholder Analysis important in Product Management?

Stakeholder analysis is important in product management because it ensures that the people who influence your product are understood and managed effectively. Every stakeholder brings different expectations, priorities, and concerns, and ignoring them can lead to misunderstandings, delays, or resistance later in the process. 

By identifying who holds influence, who needs information, and who can highlight risks early, you create a more predictable and aligned product journey. It strengthens communication, reduces friction, and helps you make decisions that support both user value and business goals.

1. Comprehensive​‍​‌‍​‍‌​‍​‌‍​‍‌ analysis: Stakeholder analysis ensures that no person and no group are left out from the project and that those people who are important don't overlook anything.

2. Prioritization: The analysis helps to set priorities depending on stakeholders and their respective interests, facilitates resource allocation, and helps with the strategic focus.

3. Understanding needs and expectations: By ensuring that the needs, expectations, and concerns of all the stakeholders are taken into account, it becomes possible to make effective proposals.

4. Communication: Recognizing stakeholders and their relations with each other, thus, facilitating conflict resolution, cooperation, and joint efforts.

5. Decision Making: Analyses are decision aids during a project's execution as they ensure that the choices made align with the project's objectives.

6. Good communication: Prepare a communication plan for each stakeholder so that they receive the right information at the right time and in the right manner.

7. Risk Mitigation: The analysis identifies risks that stakeholders are exposed to which consequently makes it easier to find ways of lowering those risks.

8. Support: understanding and satisfying stakeholders' needs is the key to securing support for a project, overcoming difficulties, and ensuring safety.

9. How to make projects work: Stakeholder analysis usually involves relationship management, collaboration facilitation, and achieving objectives in a way that satisfies ​‍​‌‍​‍‌​‍​‌‍​‍‌everyone.

What​‍​‌‍​‍‌​‍​‌‍​‍‌ are the Benefits of conducting a Stakeholder Analysis in Product Management?

Stakeholder​‍​‌‍​‍‌​‍​‌‍​‍‌ analysis in product management helps you identify the people who have an impact on your product and the expectations they have.

By indicating whose needs matter most, where potential conflicts may arise, and how decisions will affect different groups, it avoids misalignment.

Such understanding makes interactions more effective, lessens the occurrence of conflicts, and assists you in setting reasonable priorities. 

Besides that, it allows for trust to be established, decision-making to be accelerated, and the likelihood of last-minute surprises to be decreased.

Eventually, an effective stakeholder analysis results in a more efficient product development flow and a greater probability of providing a product that both the teams and users will be willing to ​‍​‌‍​‍‌​‍​‌‍​‍‌support.

The main benefits are:

1. Better understanding of customer needs: The process of identifying and defining stakeholders (including end users) may lead to a very thorough understanding of their needs and interests Thus bringing products that are actually fit for people.

2. Improvement of Priorities: By recognizing stakeholders and their desires product managers can make resource allocation more efficient by focusing on values and activities that satisfy the needs of the most important stakeholders.

3. Communication strategies that work: Modify communication methods using stakeholder analysis to make sure that the messages are delivered in the form that different groups accept and thus they become more willing to collaborate and support.

4. Risk Mitigation: The reduction of risks and problems that take place during product development by anticipating and solving conflicts or disagreements that will arise from stakeholders for a smoother project completion.

5. Integration with business objectives: Stakeholder analysis can be used to align the product with the broader business objectives by taking into account the interests of various people involved, such as senior management, sales, and the sales team.

6. Getting Stakeholder Support: The support of key stakeholders such as senior executives, investors and internal teams is very necessary if one is to get the capital, strata, and deals. The identification of stakeholders assists in creating strategies for initiating and handling these activities.

7. Customer Satisfaction and Loyalty: Knowing and satisfying the needs of the final customers and buyers can lead to the improvement of product quality and thus increase customers' satisfaction and loyalty.

8. Efficient Resource Allocation: It is possible to allocate resources effectively when one knows which stakeholders have the most influence and thus is able to concentrate efforts on areas that will have the greatest impact on the product's success.

9. Adaptation to Market Changes: The product managers by keeping in touch with external stakeholders like industry influencers and partners can respond to market changes effectively, thus they will be ahead of the trends and able to maintain their competitive ​‍​‌‍​‍‌​‍​‌‍​‍‌position.

How To Do Stakeholder Analysis?

Carrying out a stakeholder analysis is straightforward. It's about identifying all the human beings associated with your product and ensuring you understand how they will influence it. Here is an outline of a transparent, step-by-step methodology: 

1. Identify everyone who is connected to your product

Begin by listing everyone or every group that measures impact or has impact on your product. Usually you will include customers, engineering, design, sales, marketing, support, management, and autonomous partners or regulators at times.

This could be thought of as responding to the question, "Who cares about this product and why?"

2. Understand what each stakeholder needs.

You should converse with any stakeholders, inquire, or refer to responses from their perspective. 

Determine:

1. Their hopes for the product. 

2. Their concerns. 

3. Their desired results. 

4. The extent to which decisions affect their job or goal.

This provides an update on what stakes the groups find important. 

3. Determine the stakeholder level of influence. 

Not everyone carries the same weight. Some stakeholders establish the strategy, some approve the budget, and others provide guidance around the customer experience or product delivery. 

You can label the stakeholders as:

1. High influence 

2. Medium influence

3. Low influence 

This informs you how closely to work with individual stakeholders.  Or at a minimum who to keep informed. 

4. Build a simple grid to map stakeholders 

A common approach to conclusion is to map stakeholders onto a simple grid.

• Influence - high/low

• Interest in the product - high/low

This helps you to identify who will take priority in your engagement, for example:

• High influence + high interest - Keep them fully engaged

• High influence + low interest - Update them at critical milestones

• Low influence + high interest - Keep them informed

• Low influence + low interest - Touch base from time to time

5. Develop a communication plan 

After identifying key stakeholders and their priorities, determine how you will keep in touch with them, including:

• Routine check-ins

• Status updates

• Early looks at functionality.

• Sharing decisions before they are final

• This prevents miscommunication and builds trust.

What is a Stakeholder Analysis Matrix?

A stakeholder analysis matrix is a fundamental stakeholder analysis tool that helps you organize everyone associated with your product by their level of influence and degree of interest in the product's success. Rather than trying to manage each person the same way, a stakeholder analysis matrix clearly shows who needs a greater investment in management, who needs regular updates, and who only needs to be kept informed on occasion.

1. High Influence + High Interest (Manage closely)

These stakeholders can directly influence the product, and they very much care about its progression.

Examples: product heads, important clients, founders, and senior director of engineering. They need:

• Frequent dialogue

• Involvement in major decisions

• Advanced preview of the product and what decisions were made to justify trade-offs

• You engage with them as partners.

2. High Influence + Low Interest (Keep satisfied)

These people can make a change or stop something, but do not want to be updated at all times.

Examples: heads of finance, legal teams, senior leaders from other departments. They need:

• Brief updates (maybe even a sentence)

• Clearly defined reasoning behind the decision

• Only updated when something significant has happened

You want to keep them satisfied, but also don’t want to be writing them updates every couple of days.

3. Low Influence + High Interest (Keep informed)

They are interested in the product but do not directly affect the bigger decisions. Examples: support teams, junior engineering, marketing teams, and everyday users. They need:

• Regular updates

• Clear communication

• A proactive stance to let them know if things may change that would impact their work

• They may provide valuable perspective and information you may otherwise overlook.

4. Low Influence + Low Interest (Monitor casually)

These stakeholders aren’t that engaged, nor do they need constant communication. Examples: remote teams, partners not closely related to the product. They need:

• Occasional connection

• Updates only when something relevant changes

How does the Stakeholder Analysis work with an Example?

If you are building a new onboarding portal for your company as an HR team member, you want it to run smoothly on launch day. To do this, you should conduct a thorough stakeholder analysis. 

Let's understand with the help of a stakeholder analysis example. 

1. Identify All Stakeholders

To conduct a stakeholder analysis, first identify all stakeholders who will be affected by the new portal.

• HR team: The primary stakeholder of the new portal is the HR department as they are responsible for its overall development and implementation into their organisation to help to reduce the amount of paperwork required. 

• New employees: All new hires will also use the portal to complete their joining formalities.

• IT support: The IT support group has a major impact on the portal as they will provide new hires with access to the portal and help resolve any access issues.

• Department managers: Department managers are also key stakeholders as they will be using the portal to help bring new employees up to speed quickly and effectively.

• Senior leadership: Finally, senior leaders will be looking to see how well the onboarding process improves employee satisfaction and retention rates.

2. Understand their needs

Next, you work to understand what they need.

3. Level of Influence

Once you know what is expected, you need to judge how much authority each group has over product decisions. 

The leadership team and HR approve all features and budgets; therefore, they have a high level of authority. 

The IT department and departmental managers do not have authority over key decisions, but they have influence on workflows (how things get done); therefore, they are considered to have a medium level of authority. 

New hires do not have much decision-making authority as individuals, but do contribute to the overall success of the business through their individual experiences.

• High: Senior leadership, HR team

• Medium: IT support, department managers

• Low: New employees

4. Mapping Stakeholders

After mapping all stakeholders using the 'interest-influence' matrix, we find that HR and Leadership are high on both scales, meaning they will be closely involved in decision-making and kept actively engaged with their feedback during development. 

New hires are low on the influence side of the matrix but high on the interest side of the matrix; therefore, you would use surveys during trials to collect feedback from them. 

On the other side of the 'interest-influence' matrix, IT and Managers maintain a lower level of interest in training day-to-day activities while continuing to play a role in influencing the outcome. 

Therefore, you should notify them of significant changes to keep them updated and aware.

Engagement actions:

• HR + Leadership (High/High): Weekly progress check-ins and visibility on decisions

• New Employees (Low/High): Collect feedback through surveys and usability testing

• IT + Managers (Low/Low): Update on major milestones and changes

5. Communication Plan

Lastly, you will create a communication strategy for each group. HR will have weekly updates, be able to see any new designs before they go public, and have some input in deciding what features should be developed first. 

Leadership will have monthly assessments of progress and how our product will affect them. New employees will be included in the early testing phase and will offer input based on their experiences. 

The IT and Management teams will be notified of any changes that may affect the ability to access materials, work, or be trained.

By doing this assessment, you have identified your key stakeholders, what they want from you, and how you will engage them. 

This allows you to mitigate resistance, mitigate time delays, and establish credibility,  which will increase the likelihood of launching a successful portal that everyone will support.

What are Stakeholder Analysis Tools? 

Stakeholder analysis tools help you figure out who your stakeholders are, how they affect your product, and the best way to work with them. These tools help you avoid uncertainty and stay focused on what matters by making the process more organized and visual. The Power–Interest Grid, the Salience Model, the Stakeholder Cube, Stakeholder Maps, and the Onion Diagram are some of the most common tools. You can use all of these tools in a different way to figure out what your priorities are, what risks might come up, and how to plan communication so that everyone involved is on the same page. 

1. Power–Interest Grid

The Power-Interest Grid categorizes stakeholders based on their level of power and their level of interest in the results of the project. 

Stakeholders with both high power and high interest require continuous involvement since they both have the power to influence decision-making, and they are very interested in the results of the project. 

Stakeholders with high power and low interest require selective communication so they remain satisfied but are not inundated with too much information. 

Stakeholders with low power and high interest should be kept informed and engaged through feedback. Low-power/low-interest stakeholders only require periodic updates. 

The Power-Interest Grid is a tool used by a project team to focus their attention and communication to stakeholders that require the most attention.

2. Salience Model

Stakeholders can be classed as having authority/power (their ability to influence the project), credibility/legitimacy (their tie to the work and/or the benefits derived from it), or urgency (the immediate attention of their requirements). 

Based on the three components of power, credibility, and urgency, stakeholders can be classified into four categories (dominant, dependent, dangerous, or definitive). 

When there are competing demands from multiple stakeholders, the Salience Model is an effective tool for helping the team identify which stakeholder(s) needs priority attention to avoid the risk of future conflicts, delays, or escalation of issues. 

3. Stakeholder Cube

The Stakeholder Cube provides a comprehensive 3D approach to stakeholder analysis, offering more than just two variables of Power and Interest.

It also incorporates a third variable representing Attitudes, Impact or Support Levels among other things that could also influence how the stakeholder behaves within the organization. 

This 3D cube representation aids in visualizing all aspects of the Stakeholder's relationship with the organization as well as identifying potential priorities for working with the stakeholder where there are multiple stakeholders in the environment. 

Stakeholders are not only identified by their level of Power or Interest but also, by identifying how they are Likely to respond or react to various situations the organization will face, this provides teams with a comprehensive view for creating specific and useful engagement strategies based on both the Stakeholder's influence and behavior.

4. Stakeholder Maps

A stakeholder map provides a visual representation of how various stakeholders relate to one another and to the product or project itself. 

Through a stakeholder map, one can see where the relationships between departments are established, where collaboration occurs, where there is potential for conflict (e.g., between departments), etc.

Using a stakeholder map can help teams identify the social network in which they operate and thereby assist them in identifying the influencers, decision-makers, supporters, and blockers, etc., that need to be engaged in the earliest stages of the team's process.

5. Onion Diagram

The Onion Diagram is a means to visually show who is going to be involved with your Product or Project, by using the image of an onion, with the Product/Project at the very core center and stakeholders arranged around it in Layers. 

Stakeholders who are closest to the center of the Onion (Product/Project) are generally those that are most invested in the day-to-day operational involvement for that Product/Project.

As the layers progress outwards, so too does the number of effective stakeholders (the people/organizations that can provide information or resources needed by you) begins to become larger and less tangible. 

As an organization plans for Product/Project delivery and what level of engagement/collaboration will be required by each Layer of Stakeholder, it becomes much simpler to develop a Plan to manage and prioritize your Stakeholder Group’s engagement with you.

The Onion Diagram is an excellent tool for identifying your Stakeholder Groups engagement with you over the course of the development process for a Product/Project.

Final Thoughts

Finding out who your stakeholders are and what they think is one of the most overlooked components of successfully developing products. 

By spending time learning about the people involved, their motivations, and how they influence product development, you will no longer be guessing or using assumptions to guide product development.

The good thing about doing stakeholder analysis is that it does not eliminate conflict; however, it allows potential conflicts to be identified earlier on in the project lifecycle. 

You will identify potential resistance to your project, identify potential champions of your project, and determine areas of misalignment that could affect your timeline. 

Understanding these issues allows for negotiations to occur, expectations to be set, and effective communication to take place.

When stakeholder analysis is viewed solely as a one-time activity, it will quickly become outdated. However, with consistent use of stakeholder analysis as part of your product development process, you will develop it into one of your strongest skills. 

The next time you are starting or changing a product, focus your efforts on understanding who will be impacted by the product. 

Spending a couple of hours getting to know your stakeholders will allow you to eliminate weeks of rework and produce a product that will have greater support from potential users.