Monthly Archives: October 2016

Spotify’s slogan, “all the music, all the time,” is an incredibly accurate portrayal of my personal usage of the business’ services. The role Spotify plays in my life has grown over the past year to the point where I am certainly caught in the loyalty loop of the consumer decision journey and cannot go a day without using the app. With this company being the earliest music streaming service to attain 100 million monthly active users, it is evident I am not the only person hooked on Spotify.

Running. Digital image. Run to Your Own Beat. Spotify, n.d. Web. 25 Oct. 2016.

Spotify offers an enormous variety of music that appeals to many different tastes. Spotify is also highly accessible, as the service is available via phones and computers. Consumers lean towards Spotify, rather than other music-streaming services, largely due to price. Spotify is cheap for all users, but the option to skip ads and stream songs offline is available for $9.99 a month. This is extremely inexpensive, as this price point is equivalent to approximately ten songs on iTunes.  Spotify has been excellent at seizing opportunities presented to the company. For example, they provide a platform of music sharing for many developing artists, feature both originals and covers, offer playlists specifically for studying and working out, and even have gone as far as to feature podcasts. This openness to change has allowed significant growth. Other opportunities that can be capitalized on in the future include the rapid growth of technology and a change in attitudes towards streaming.

A weakness of the company is that consumer satisfaction with Spotify has lowered due to certain major artists, like Taylor Swift and Beyoncé, declining the streaming of their new music on this platform. The possibility of more artists doing so is a large threat to the success, as Spotify is heavily reliant on subscribers for attaining profits. It is stated that about 70% of revenue is deducted in order to pay owners of streamed content. This means that a major weakness of the company is that they have lower profitability than expected. The aforementioned statistic is also indicative of high supplier power, which is a threat to the business. If artists demand more profits per listen, this would cut deeply into the retained earnings of Spotify.  Other threats include high degree of rivalry and low switching costs of consumers. With so many options, such as Apple Music, Amazon, and Tidal, customer loyalty is not unwavering.  Despite such threats, it is evident that Spotify is very self-aware and have recently made strategic advances to increase their market share.  Potential acquisition of their competitor, SoundCloud, is explained thoroughly and helpfully through the use of concepts such as differentiation and competitive advantage in Mikaela Grange’s post.

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According to Rita McGrath, there is no sustainability when it comes to competitive advantages. The idea of transient advantage is one in which advantages are short lived and constantly reinvented. When considering technologically-based businesses, such as Amazon, SnapChat and Netflix, this concept seems to hold true.  In Cyrus Cohen’s Blog, he discusses the ambitious reinvention of Amazon and their plan to rework its delivery strategy in depth. He explains the external forces that urge the company to make such changes in their operations. Similarly, in Hedy Hong’s blog, Snapchat’s development of spectacles, a tangible product, is identified as a response to the demand for innovation and product diversity. Both blogs touch on the need for constant development to sustain a competitive advantage. It is unclear if these endeavors will result in superior profits, but it is evident that these companies are attempting and prioritizing innovation.

Netflix Logo. Digital image. Wikia. N.p., n.d. Web. 24 Oct. 2016.

Having 57.4 million subscribers in 2014 and a projected growth to over 100 million for 2018, Netflix has established themselves as a major leader in their field. However, there is a high degree of rivalry in the online streaming business that is only increasing as time progresses and new competitors, like YouTube Red and Hulu, emerge and mimic Netflix’s value proposition. How does Netflix sustain their competitive advantage? Forbes attributes the creation of original media to retention of subscriber growth of this over the top content (OTT) market powerhouse. This is undeniably true, as one of the most recent Netflix original series, Stranger Things, reached 8.2 million people in nearly two weeks of release.

What I believe to be an understated strategy of Netflix is the inclusion of popular names in their original content to bring in wider audiences. This approach eases the workload of the marking department, as less effort is required to attract viewers. The company worked with Colleen Ballinger to produce Haters Back Off, an eight-episode series that was rel

Digital image. The 100 Wikia. N.p., n.d. Web. 24 Oct. 2016.

eased a week ago on the 14^th of October. In doing so, Netflix was able to capitalize on the wildly popular YouTube personality of Miranda Sings and tap into her fan base on YouTube.  Similarly, casting Selena Gomez in The Fundamentals of Caring is another instance of this technique.

I would agree with Forbes’ claim, as I am constantly binge-watching Netflix originals such as the aforementioned Stranger Things and The 100. I would definitely not have a Netflix account if it weren’t for series like these. Additionally, due to the fact that my sister began using Netflix in order to watch content featuring these celebrities, I would say that Netflix’s constant stream of new ideas is incredibly effective that is sure to continue to secure large audiences in the future.

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In class we discussed that, in businesses, a strategy is a cohesive group of choices that position a company in such a way that financial returns are heightened in the long haul. It was noted that increasing financial returns was usually the objective. However, how does strategy change when the business is non-profit and revenue bears less significance?

Non Profit Organizations. Digital image. Non-profit Organizations. Clientaxinc, n.d. Web. 11 Oct. 2016.

Whether the business entity is for-profit or non-profit, there are countless similarities strategic procedures, such as tools and tactics. Both implement processes, like SWOT analyses (which we did for assignment one), to aid in establishing a competitive advantage in the given industry. However, key differences between the two lie in planning. There are variations in the planning process because the ultimate goals of NPOs and for-profit businesses are divergent. For benevolent organizations, the reason behind operation is dedication to certain social causes or advocating views, and maximizing profits is not the main priority. With that being said, non-profits must develop different criteria when deciding on things like target segments, communication strategies, and networking. For example when the planning process for non-profits seeks input from outsiders such as supporters and external stakeholders, unlike typical profit-oriented businesses in which only paid parties participate.

By providing clear, insightful steps for formulating an effective social media game plan specifically for non-profits, Alicia Johnston’s blog post, “A Strategic Guide to Social Media for Non-profits,” that the way companies approach something, like utilizing social media, varies depending on the type of business. It presents suggestions collected from non-profit experts that focus on increasing awareness, as well as acquisition, retention and engagement of donors, which are engaging topics I had not yet considered in my studies. Something I found particularly interesting from research was that there are tactics that allow non-profits to maneuver which would not be effective for profit-central businesses. For example, being a small NPO is an asset as the staff is able to pay special attention to those they are serving, whereas being a small for-profit organizations could equate to incapability to compete with established adversaries.

As a former executive of two high school clubs devoted to raising money for various causes, I wish I had done research on this topic sooner. It would have allowed us to further our mission more effectively through implementation of NPO-specific strategies rather than more familiar ones used by profit-driven companies. I could only imagine how superior these clubs would’ve been if we knew how to understand and position ourselves in the business landscape and execute properly according to our goals.

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Johnson Alicia. “Strategic Guide to Social Media for Nonprofits | Sprout Social.” Sprout Social. N.p., 2016. Web. 02 Oct. 2016.

“Strategic Planning for Nonprofits Vs. Profits.” Small Business. N.p., n.d. Web. 02 Oct. 2016.

“What Does a Good Nonprofit Strategic Plan Look Like?” Nonprofit Answer Guide. N.p., n.d. Web. 02 Oct. 2016.