Spotify Strategic Plan
Assignment Overview
1. Introduction: What as the proposed recommendations made by your assigned group?
2. Company overview: Present a short overview of your assigned company.
3. Strategy implementation: In this section, you will explore several items which need to be considered to implement the proposed recommendations made by your assigned group. To aid you in completing this section, consider some of the below topics found under chapter 9 of David & David (2017).
a. Product Positioning and Perceptual Mapping
b. Strategic Finance/Accounting Issues
c. Corporate Valuation
d. Strategic Management Information Systems Issues
4. Strategy execution: In this section, you will explore how the organisation can turn the proposed recommendations into action. To aid you in completing this section, consider some of the below topics found under chapter 10 of David & David (2017).
a. Comprehensive Strategic-management Model
b. Allocate Resources and Manage Conflict
c. Match Structure with Strategy
d. Strategic Production/Operation Issues
e. Strategic Human Resource Issues
f. Strategy-Supportive Culture
5. Strategy monitoring: In this section, you will explore how the organisation can review, evaluate, and control the execution of strategies to respond to the firms external and internal environment. To aid you in completing this section, consider some of the below topics found under chapter 11 of David & David (2017).
a. Strategy-Evaluation Process, Criteria, and Methods
b. The Balance Scorecard
c. Contingency Planning6. Conclusion: summarise the key points of your implementation strategy. Consider any limitations to your strategy and provide a reflection on whether you feel the proposed recommendations can be effectively implemented and if not, what modifications would you propose?
As you work through this assignment, you will take a theory meets industry perspective. This means that you will explore the theoretical side of the concepts/tools/theories you are looking at and where applicable, apply them directly to the assigned groups organisation and proposed recommendations. While the module’s core textbook is provided as a guide to produce the assignment, students need to rely on additional academic sources (i.e., journal articles & textbooks) and specialised publications (outlets written by industry experts for an industry audience) when exploring and applying the relevant concepts/tools/theories to the assigned groups organisation and recommendations. A student’s individual assignment will range from 2,000-2,500 words (excluding cover page, table of contents, references, and appendices) and will be submitted via Turnitin on Moodle on
Requirements for Assignment:
All continuous assessment submissions must be accompanied by a declaration of originality that states the document is compliant with the University’s Plagiarism Policy and the School of Business Plagiarism and Originality. This must be electronically signed by the student (scanned/photo written signatures of all group members). Failure to electronically sign the declaration of originality will result in a zero grade for any student who does not sign the declaration. Note that the typed name of a student is not sufficient, you must include the scanned/photo of the written signature. Please ensure that this electronically signed declaration is on the front page of the assignment you submit on Moodle.
The standard 10% +/- rule will apply to this assignment.
Assignments submitted after the submission deadline will be deducted 10% for each 24 hours the assignment is late. Any assignment that is 10 days late without an approved extension will receive a zero grade.
All primary sources and data used must be in English or Irish. If other languages are used, a translation must be provided.
Use 1.5 times spacing, font 12 and use a professional font
Spotify Strategic Plan
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Introduction
Spotify Company has now been a global leader in online music streaming since its formation. The company was founded in 2006 and has ever since been performing outstandingly well despite the much-heightened competition from competitor forms such as Apple Music and YouTube. Going forward, it is important that the company executives formulate proper workable plans to ensure the company moves forward and achieves even greater success in terms of profits generated and revenue streams (Porter, 2021). Strategic managers of the organizations ought to collaborate with other departments to ensure that formatted strategies are well implemented, executed and well monitored. The company management must show goodwill and support to the strategic managers as they formulate, implement, execute and monitor important strategic plans for the company. Achieving optimum financial success in the next five years will require the company to set serious financial plans to propel itself to the much-desired success. The strategic managers must work in collaboration with the finance team for the company and develop a proper strategic financial plan for the company for the next 5 years. The main objective of the strategic plan is to reduce costs and increase revenues and consequently profits for the company. Therefore, this paper delves into the strategy formulation process; the implementation proves, and the evaluation and monitoring process for the company.
Strategy Formulation
To understand the best strategy to formulate the strategic managers should ensure they have done a proper thorough SWOT analysis of the company. SWOT analysis is crucial since it helps strategic managers to be able to know whether the company has the necessary resources and capability to implement a certain strategy or not. Also, SWOT analysis helps strategic managers identify the company's opportunities to take advantage of and achieve their desired strategic goals. Additionally, SWOT analysis ensures that strategic managers are well informed of the main strengths, weaknesses and threats likely to encounter the company as it strives to achieve its strategic plan. Knowing the strengths and weaknesses is crucial since it helps have a glimpse of where to invest most resources.
In this case scenario, the main strengths of the company include the agile human resource corporate culture established by the human resource managers, the renowned brand name, the large market share and customer base across the world and the company’s ability to use advanced technologies that help in offering its consumers with personalized experiences while listening to the streaming music (Pastukhov, 2019). The company's main weaknesses at the moment include its low financial stability, characterized by the company's weak bargaining power in the music streaming space and the high costs of operations. These weak areas arise since the firm buys its music and the music rights holders have the highest bargaining powers. In the end, this means that the firm incurs high operational costs and ends up being financially constrained compared to its competitors. The main threats experienced by the company are the constant changes in music prices and constant changes in data collection policy measures for streaming music. Currently, the company has the perfect opportunity to devise a proper plan to lower its costs and boost the financial stability of the company through increased revenues.
Strategy Evaluation
The company executives and the strategic managers ought to have several strategic options to evaluate and choose the best for the company. This section of the paper will discuss three main strategic options that the company can choose from and choose the best suitable option to be adopted.
First Strategic Option: The first available option for the company is to produce its exclusive music, which will only be exclusively available on its platform. This is an interesting option considering that the company has already ventured into the production of its own original content in other niches such as podcasts (Steel, 2020). This would be highly beneficial to Spotify since it will give the company a chance to have something that is unique to the company alone, that provides greater value to the company and overall ads to the company’s competitive advantage since all other platforms stream the same type of music. The company's main strengths align so well with these strategic options, considering the renowned brand name that the company has an agile organizational structure and the personalized algorithmic technologies that will enable it to tailor the music for its consumers. Additionally, this option is valuable since it gives the company a chance to diminish its main weaknesses: high music prices from music holders, weak bargaining power and financial stability. Indeed, this option is worth pursuing by the company executives and the strategic and financial managers.
Second Strategic Option: The second available option to be chosen by the strategic planning team and consequently evaluated is the option of cost differentiation. Cost differentiation means the company lowers its music streaming costs in newly joining users and markets to ensure it maximizes in these markets and captures the users' loyalty to the brand. In return, the company would yield much higher returns than it currently has, have a much higher competitive advantage and eventually control the market prices hence gaining much higher bargaining power. However, this option is not feasible and is quite risky since it would eventually lead to increased price wars and it is not certain that music customers would choose lower prices. Also, the company's profitability levels will eventually reduce with this model since the per-user revenues will be reduced. A cost differentiation strategy is a strategic option that works for some big companies and requires great risk control measures and extensive research investment.
Third Strategic Option: The company has the option of minimizing costs and being more financially stable through acquisitions. The company executives can opt to acquire a vast majority of music holders. This strategy would lower the company's overall operational costs since it would not be purchasing the music from the original music holders. However, pursuing this strategy is risky since other firms with much higher financial stability are likely to win the acquisition bids. Hence, it could be a plan in futility.
Strategy Recommendation
I recommend the first alternative option as the best option for Spotify. The company should create its own original music that will only be made accessible on its platform. This is an excellent choice, given that the business has previously explored producing its own original content in other segments, including podcasts. Spotify would greatly benefit from having something exclusive to the firm Because all other streaming services provide the same kind of music. Equally this option would boost the company's value and enhances its competitive edge. Given the well-known brand name, flexible organizational structure, and individualized algorithmic technology that would allow the firm to tailor-make music for its customers, the company's major strengths fit well with these strategic possibilities. This alternative is advantageous because it allows the business to have an opportunity to address its primary problems, which include high music pricing from music owners, poor bargaining strength and inadequate financial stability. Indeed, this is a choice that the company's executives, strategic managers, and financial managers should make. The advantages of the first option outweigh the advantages of the other two options, which proved to be quite risky from the discussion above.
Strategy Implementation Plan
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