Term paper
At
Handelshøyskolen BI

- Spotify -

GRA 68344 – Business Development and

Innovation Management

Hand-in date
30.11.2011

BI Oslo

Program
MSc in Innovation and Entrepreneurship
Table of content Executive summary ii What is Spotify? 1 Timeline For Spotify 2 External Environment Analysis 3 PESTEL framework 3 Porters 5 forces 3 Internal Environment Analysis 6 Vrin framework 6 Stakeholder analysis 7 Users 8 Right Holders 8 Business Partners 8 Employees 8 Competition 9 Swot analysis: 9 Strength 9 Weakness 10 Opportunities 11 Treaths 11 Spotify’s value system 11 Spotify’s innovation Processes 14
The PESTEL framework will be preferred with debt on Political and Legal aspects as two central points for this paper.

Spotify is represented in countries which is characterized by democracy, good Internet access adequately 3G, low cultural barriers and basically the same judicial system. In the aftermath of Napster, which globalized the music business, the access to music has become unchallenging. For Spotify’s sake, expanding to new markets is not possible before the licensing is sufficient. Closing the deal with record labels settled in the specific countries is the most demanding part, which is also time-consuming, as Ms Solheim stated. Spotify contributes to increase the major record labels revenue simultaneously as information of their music expands, thus the legal aspect for their business is sufficient for its industry. Spotify’s strategy of which countries to chose relies on these mentioned aspects.

Porters 5 forces

The industry Spotify operates in is the music industry, and more specifically; the online streaming industry. This industry is only a part of the music business, but in the last ten years there has been a shift with further focus towards digital music. Michael Porters Metrics with his five forces