Strategic Analysis of Music Streaming Services - Spotify
Overview:
Organizations face many challenges in the current environment, and they must develop effective organizational strategies to successfully compete in their industry. For your team project you will complete a strategic analysis of an industry and how you would enter and compete in the industry.
Selection of an industry: Music Streaming Services - Spotify
1. Strategic inputs – Environmental Analysis
Who is your benchmark company?
Assessment of the general environment and its impact on that industry
An assessment of the 5-forces of the industry
2. Strategic Formulation – Build an organization
Recommendation of your strategic position…..
Given this opportunity to start from scratch, which business strategy would you recommend being successful in that industry?
Given your strategic decision, which core competencies do you anticipate would be most critical to build to achieve success?
Music Streaming Services – Spotify
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Music Streaming Services – Spotify
Over the years, the music streaming business has grown by a huge margin. Even though the industry has been flourishing, it would take much work to start a new business and flourish due to the existence of one of the best streaming companies globally. One of the companies we can benchmark with is Spotify since it has been performing well over the years. One of the areas to understand is the country's general environment and the impact that it has had on the company. Spotify is one of the businesses to serve many countries. For example, the company is currently serving more than 180 countries globally. The company's success in the country will be highly dependent on the political stability in that country.
Furthermore, the company is also affected by the world’s economic factors. For instance, over the years, Spotify was performing exemplary well. However, the 2020 recession had a huge impact on the company. Furthermore, unemployment in some countries helps achieve cheap labor since the labor supply exceeds the demand. On the other hand, Spotify is also affected by social factors. For instance, the demographics affect the company since young people purchase the product more. Furthermore, it has premium products for people of high social class.
Furthermore, technology has affected the company. For instance, increased technology has helped the company penetrate new international markets. Moreover, the company's technology is a major source of its competitive advantage. Besides, the environment is also affecting Spotify. For example, weather conditions usually affect how the product will be transported. The following instance will affect the company’s delivery dates. The company will also be affected by laws within the country. For example, it will be affected by whether the country protects intellectual property and the quality level that the country has set.
Furthermore, the five forces model has affected how the company performs. One of the forces is the threat of new entries. However, this threat is low since this industry requires resources that most people are not having. On the other hand, the company is suffering from the threat of substitute products. This is an instance where the customers shi...