Spotify Case Study (Managing Innovation) Project descriptionThe aim of this study was to identify how Spotify structured its organization to implement the innovative idea of music and video streaming and keeps itself aligned with current changes in the marketplace. We provided an analysis on the business model of the firm, their approach at dealing with changes in technology and the business systems and their attempts at keeping abreast with the same.

1. TEAM 10
Advaita Nigudkar
Eric Lo
Estherlita Saerang
Jiyang Zhao
Jijo Banerjee

2. Peer-to-peer music
sharing service
Before Spotify
First streaming on-
demand music
subscription service
(low streaming
quality)
Individual purchase
of song or album
People either legally or illegally gain access to music through the internet

3. InnovationWhy Spotify is innovative and gain great success
• High streaming quality (320kbps)
• Free streaming option
• Great user interface
• Personally curated and current
playlists
OFFER AWESOME SERVICES
Spotify extensive music collection expands
ways that music lovers interact with music
around the world
ACCESS
• Stir people away from piracy and less
monetized platforms
• Generate additional royalties for each
streaming
• Platform for new and/or smaller artists
• Use data analytics to provide record
companies with credible streaming data
and trends
BENEFIT THE MUSIC BUSINESS
01
03
02

4. First Ideation
In 2006, Daniel Ek, Martin Lorentzon and a small group of
people were chatting by the HTPC machine
They realized that it was cumbersome to get content online
despite having a capable supporting technology
This group of friends decided to pool their ideas and
diverse skill-sets to create a start-up company, Spotify AB
Launched in October 2008

5. Spotify Engineering Culture

6. v
February 2010
Received a small
investment from Founders
Fund to kick start its
commercialization 2011
Secured $100 M at $1
billion valuation to support
US launch
2012
Goldman-Sachs raised
$100 M at $3 billion
valuation to support RnD
and marketing outreach March 2016
Raised $1 billion in debt
financing
January 2016
Raised $500 M through
convertible bonds
Funding History

7. www.companyname.com
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ChallengesChallenges Spotify faced throughout the years and how they
handled them
ActionChallenge Result
Agile framework
Organization size and
how to assimilate the
organization into a
single cohesive unit
Spotify implemented
cross functionality
70% of the royalties are
paid to label companies
and the artist  low net
income for the company
itself
Debt financing
More money inflow to
make the organization
grow despite the risk
associated

8. www.companyname.com
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8
SWOT Analysis
S
Strengths
• Agile organization allows
quick solutions to
problems
• Leverage crowdsourcing
and user driven content to
grow site material
• Quality streaming and
presence of free service
allows high traffic
Weaknesses
• Low net income
resulting in a loss
making company
• Labels and artists are
freezing out Spotify due
to unfair compensation
Opportunities
• New features such as
jogging features, podcasts
• Appeal to more users for
every occasion
• Consider JV or alliances
with other brands (e.g.
Nike + jogging tracker)
Threats
• Apple music, Tidal
• Amazon prime music
• YouTube Red
• Better business model
W
O T

9. • Medisys case
• Greeley case
Related Articles Class Concept
• Cross functionality in the
organization
Company Action
Company Actions and ConceptsComparison between Spotify case study and what we’ve learned in class
• How to implement cross
functionality right
• Cycle of Technological
Change
• Different stages of
technological change
• Spotify incorporated
concepts of
technological cycle into
its organization
• Disruptive Technology
• Introduced high quality
online streaming
replacing peer to peer
sharing (illegal
streaming)
 reduce piracy
• How disruptive
technologies make older
technologies obsolete

10. THANK YOU