Current and Future use of Internet Technologies of Spotify

Executive summary

Spotify Company is one of the technological companies in Europe. The company has performed very well in the market due to their highly competitive and innovative technologies they use. Some of the latest technology used in the company comprise of encrypted technology. The managing director of the company anticipated that they will gain additional market share from overseas countries because of their latest technology which the company has adopted.

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The main purpose of this report is to analyze the Spotify Company, its background, marketing theories and its application and the way company deals with competitors in the market. In addition, the report will analyse the effectiveness of the marketing strategies, strength of their competitors and the bargaining power of the internet users. Lastly, this report has reviewed various recommendations which the company should apply so as to improve its competitive advantage in the market. Besides, the report will review the analysis of the current and future use of internet technologies of Spotify Company (Saunders and Armstrong, 2008. p 83)

Business background

Spotify is a company providing internet services to various companies across Europe and currently, the company has over a million users in the UK. The company has attracted all classes of customers in the region starting from individual customers to big companies. The company is not only internet services provider but also an innovative digital music service provider in the Europe.

The company has done it best to bring the fans closer to music and also closer to their favorite artist. Besides, the company has recently lands on iPhone throughout Europe and the marketing manager expects that the company will improve its sales due to additional products and the increase marketing activities in the market. (Kurtz and Snow, 2009. p 100).

The Customer Life Cycle (CLC)

The company can also benefit in the situation analysis for e-marketing because it will facilitate the identification of the customer life cycle so that they can used it to consider the creation and delivery of lifetime value to their target market. The customer life cycle is an important tool which the companies used to identify the services which the customers will require through their life cycle.

This strategy will eliminate the traditional way of being product oriented and become market oriented to ensure long trust and customer’s loyalty in the market. This means that the company will be monitoring the key stages of the customer relation so that they can produce products and deliver services which will satisfy the customer effectively.

To analyze the current and future use of internet technologies of Spotify, it will be necessary to conduct SWOT analysis so as to establish the internal strength of the company which will reflect the possibility of the company to established new technologies and employ competitive employees who can deliver quality products (Rokeach, 1999. p 113)

The future use of internet technologies of Spotify Company can also be established by examining the opportunities of the company in the market. This is very important because a customer can forecast the future of company before investing in that company.

rter's Five Forces of Competition Framework

The threat of substitute products or services

There are many companies in Europe offering internet services. These companies are offering substitute internet to the market segment served by the Spotify Company thus causing competition. It is therefore important for the Spotify Company to employ various strategies such as lowering their prices and to take advantage of their large economies of scales and lower prices so that it would be expensive for the competitors to retaliate because they will be running at a loss.  Furthermore, the company should establish a strong bond between them and the customers.

The threat of the entry of new competitors

The company has been in a position to deal with the problem of new entrance in the market. The company has benefited from government restriction policies which as left new potential competitors with choice other than quitting the business. The government restricts this kind of business because most of internet service providers supply internet to government offices.

For the company to establish an internet business in Europe it needs to conform to the legal policies governing such businesses.  These policies are procedurals and it normally takes time to comply with making the new entrances to loose hope in the business. In addition, the Spotify Company has loyal customers who cannot be wooed easily. This makes it difficult for new entrance to get customers in the market. Lastly, the capital requirement for this kind of business is so high which small companies might not be in a possible to raise

The intensity of competitive rivalry

The company uses various strategies which makes them to remain the market leader. They use some strong advertisement which emphasizes their mission statement that is “The best internet provider in worldwide and technological innovators”. This mission statement is normally explained in the advertisement which has attracted many companies and other customers.

The bargaining power of customers and suppliers

The company has been able to contain this power because these customers are well knowledgeable about the quality of the services they should receive. They access this information through the internet, TV and other socializing networks.

Though the suppliers are less in this market, they are not so much influential because of the high switching cost in the market. This is because Spotify Company normally order products from suppliers in large quantity. The customers of Spotify have also benefited so much because of the discount they get whenever they buy from these suppliers.

Situation Analysis for E-Marketing

Where are we now? (Internal v External Perspectives)

The company has benefited a lot from the E-marketing analysis because they are able to obtain various issues which are affecting the business. Some of the issues which the company can benefit as a result of e-marketing are the possibility of bridging the gap between competitor research and the internal audit of the company.  Furthermore, this analysis help the company to position itself in terms of e-marketing i.e. our many customers (companies) are using our internet (Mata, Fuerst, ; Barney, 2005 190),

This situation analysis for e-marketing is basically analyzing the e-marketing situation of a company; this can best be determined by taking into account various factors such as internal and external factors. The human resource manager of the company has expressed the intention of the company of focusing upon digital commerce in order to achieve their goals and objective.

Marketing strategies

Due to high competition in the market, the company is planning to introduce the 5Ss of internet marketing strategies. According to the marketing manager of the company, he said that they are planning to implement these 5Ss that they can maintain their leadership position in the market. These 5Ss stands for:

1. Sell-increase the amount of sales made with specific trading period by attracting more customers through the use of digital technologies.
2. Serve-add value and accuracy to the daily tasks of customers such as placing and receiving orders. These customers will improve their efficiency through the benefit of internet such as high speed.
3. Speak – through the recent landing on iPhone technologies throughout Europe, the company will be able to stay closer with the customers because they will be offering door to door services to their customers.
4. Save – through the use of information technology, the company will be in a position ton control their daily variable expense thus reducing the running cost of the company.
5. Sizzle – introduce new features on the services offered by the company so that they can attract more customers. Besides, the company should try as much as possible to sell the sizzle and not the sausage i.e. the benefits and value of their service instead of selling the features of those services they provide.

Web design analysis

Through web design analysis, Spotify Company has been able to answer various important questions which could lead them to close down the business. Some of the questions which the company has been able to answer because of web design analysis are the reason as to why many visitors and the new potential customers are getting lost on the company’s site.

Answering such question in business is very important because the main aim of the business is to maintain the old customers as they look for new customers in the market. Furthermore, the company has been able to deal problems associated with their services such as their site being invisible to the search engines. Finally, the company has turned their website to be a marketing tool and which it has become a very powerful tool for marketing activities (Wikström, 2009. p 188)

Spotify Company have implemented effective website strategies so that they that they can attract new customers in the market and eventually turn them into loyal customers. Some of these effective website strategies used by the company include the following. The first strategy is the heuristic website usability evaluations. This indicates how the website can be used by everyone regardless of whether he or she is an IT person. The second strategy used by the company is the web usability. This helps to reduce the problems which can arise. And the last strategy is the effective website redesign strategies (Sasaki, 1998)

Sales and Customer Service

Recently, the company has recorded the highest sales than ever before due to its expansion strategy, the company is planning to expand to the US market. The company’s director during his interviewed with one of the trading officials in Europe said that the company was expanding its operation so that they can serve new markets in United States of America.

The human resource of the company had also emphasized the needs of training employees on periodical basis so as to be in a position to operate advances machines acquired by the company.

Besides, the company has developed an online customer services so that they can be handling customers’ complaints and assisting the company in clarification of issues concerning the IP addresses of their internet. Spoptify has hosted thousands of companies and therefore they should be online throughout in order to attend customers from different countries. Customers are very important because it determines the success of the company. Human resource manager of the company should ensure that the customer care services in the company are well trained so that they can serve the customers in a professional (McLoughlin, 2010. pp 79)

Recommendation

The Spotify Company should employ professional IT people who will deal with the supply of internet effectively. This is very important especially at the current world whereby every company is depending on the internet. The human resource manager should focus on developing employees in the company so that they can retain its employee for longer time. It is always profitable to retain the employees in the company rather than employing the new employees who will also require training thus becoming expensive for the company.

Conclusion

The company should adopt effective strategies which will enable the company to maintain its competitive advantages. In addition, the management should ensure to develop attractive mission statement which focuses on the satisfaction of the customers so as to influence the company to use the company’s services. Customers will always prefer

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