Presentation to high management of

Spotify after Apple Music launched

Study of Strategic formulation:
1 Study of Industry attractive by using five forces After Apple Music launched:

Five Forces Estimated Justification and comments

inspiration as
The Power of Weak 1- The suppliers (like music company) though Apple and Spotify will
suppliers increase their marketing segments.
2- Increasing of marketing segments will increase profit/sells
3- Increasing of sells will reduce the cost.
4- Reduce the cost will make a better position for music streaming
applications to negotiate the price.
The Power of Strong 1- The customers have a choice to select between multi-provider (Apple
buyers music, Spotify).
2- Easy to switch between the application without the high cost.
substitute Strong 1- Apple doing exclusive albums.
products and 2- Apple includes music in their ecosystem between HW and services.
services 3- Apple includes the famous Radio station.
4- In Spotify can work with chromecast , amazon echo.
5- In Spotify can Share playlist to social media.
6- Spotify provide free service.
7- Spotify has a special price for students.
8- Use third-party tools to convert iTunes playlists to Spotify; desktop
Spotify can pull in local files
The threat of Weak 1- Increase the investment cost to compete the existing players.
new entry 2- Difficult to build brand royal between Apple music and Spotify.
3- It needs to be more unique and stronger to compete apple and
Spotify.

Competitive Moderate 1- Increase the market growth of the music streaming industry in
rivalry general.
2- There no price competition of the services yet.
3- Players are dominating the market. Apple 50 M and Spotify 100 M
subscription.
4- Apple reached 108 countries but Spotify reached 58+
5- Apple dominates USA and Spotify Europe and others
 Conclusion:
 Spotify should re-negotiation the cost with the supplier and request to have a better price.
 Spotify need to have program for customer royalty and strong customer service to reduce the
power of buyer.
 Spotify needs to build their own application for iTunes playlist.
 Spotify should check to include famous radio station inside their radio services.
 Spotify should focus on the customers all the world, not in the USA and maybe study to enter the
eastern country India and China.

2 Study of Resources and capability by using VRIO:

Apple Music:
Resources/Capability Is it Valuable? Is it Rare? Is it costly to Is it Organization
Imitate? capture value?
Financial resource Yes Yes Yes Yes
Physical Resources Yes Yes Yes Yes
Technology resource Yes Yes Yes Yes
Organization Yes Yes Yes Yes
Capability
Free service with Yes
advertisers
Wide market reach Yes Yes
(all mobile users on
iOS, android, etc.)
Partnership Yes
management
Enter Multi-Market Yes
with Multi-culture
and adapt it
Reputation and Yes Yes Yes Yes
brand power
resources
Human and Yes Yes Yes Yes
managerial resource
Network resources Yes Yes Yes Yes
Market capability Yes Yes Yes Yes

Spotify :
Resources/Capability Is it Valuable? Is it Rare? Is it costly to Is it Organization
Imitate? capture value?
Financial resource Yes
Physical Resources Yes
Technology resource Yes
 Organization Yes Yes Yes
Capability
Free service with Yes Yes Yes Yes
advertisers
Wide market reach Yes Yes Yes Yes
(all mobile users on
iOS, android, etc.)
Partnership Yes Yes
management
Enter Multi-Market Yes Yes Yes
with Multi-culture
and adapt it
Reputation and Yes Yes Yes Yes
brand power
resources
Human and Yes Yes Yes Yes
managerial resource
Network resources Yes Yes Yes Yes
Market capability Yes Yes Yes Yes

Apple in better position

Spotify in better position
Apple & Spotify are similar

Conclusion:
 Spotify should create more value and income from free service.
 Spotify should maintain to have all software across all platforms and should not depend on third
party software company.
 Spotify should do partnerships with major device manufacturers (Samsung, Huawei,
others) to have a privilege to access more customers.
 Spotify should not compete with Apple though pricing since Apple is in a better position in
finical resources.
 Spotify can reach the eastern market and customize the platform in easy matters.
The strategic initiative and implementation:
As below it demonstrates the strategic response and the implementation by using balance scorecard
and it includes 17 initiatives with time plan and measurement to help Spotify high management to
authorize the strategic implementation:

Financial
Objectives Measures Targets Initiatives
increase the % of revenue 10 % increase 1- Create special department named “Free
revenue of free within 1 Year service enhancement “under this
from free service department should have marketing, salles,
service portfolio manager, business analysis.
Target @ Q4 2019
2- Create special finical report to determinate
the expense and the income for free
services.
Target @ Q4 2019
Customer
Objectives Measures Targets Initiatives
Increase % reduce un- 5-10 % 1- Establish points programs which the
subscriber subscription customers will have promotion and service
royalty from based on his number of points.
premium Target @ Q1 2020
service. 2- Create special program for old and
committee subscribers.
Target @ Q4 2019
Increase the % increase in 30 % increasing in 1- Create new division reported to CEO for
market share market share market share eastern countries. Target @ 2019 Q4
from eastern 2- The New division should manage China and
countries India.
3- New division should working as
ambidexterity organization.

Internal Business Processes

Objectives Measures Targets Initiatives
Re-structure Unit Organization 1- New Organization chart.
based on the structure diagram, 2- Target @ Q4 2019
initiatives process flow, 3- New decision matrix.
above decision matrix. Target @ Q4 2019
4- Business Process for new organization
Target @ Q4 2019
Re- Unit Business Process 1- New policy for refund.
engineering for customer 2- New policy for time duration.
business service. 3- New policy for repeated call.
Process for 4- New policy for premium customers.
customer
service
Learning/New
Objectives Measures Targets Initiatives
Create Number of 20 agreements 1 Agreement with 10 device manufacturing.
Partnership agreements Target @ Q2 2020
Management 2 Agreement with 10 biggest operators in the
with all world.
devices Target @ Q4 2020
manufactural