Managing Innovation in Spotify: Theory, Application, and Future

Managing Innovation

Table of Contents
INTRODUCTION ..........................................................................................................................3
What is innovation......................................................................................................................3
Theory of innovation...................................................................................................................5
Application of Frugal Innovation Theory in Spotify in the context of historical development..6
Application of Frugal Innovation Theory in Spotify in the context of Future............................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
Books and journals....................................................................................................................11

INTRODUCTION
The world is dynamic and to compete today it is important to regularly innovate and
make changes in the products and services so as to compete in the market. Innovation is a
ongoing process and needs to be used by companies. To grow and make profits along with
creating a good image in the market and that helps to attract more customers. It is important to
know about the current market trends and then make development and innovation in the product
and service offered. With new innovative ideas the business is able to become successful and
also contributes to growth of the economy. Innovation is a process that helps the company to
make research and know about the needs and development that customers and provided them
updated product. Spotify is a Swedish audio streaming and media services provider that was
launched in October 2008. The company has its headquarters in Stockholm, Sweden. This report
is based on principles of innovation used in Spotify (Barlatier and Mention, 2020). There is use
of theory and its pros and cons that describe the process of innovation in the company. The
background of the company and its development process. The application of theory in near
future and how it helped company.
What is innovation
It is a process under which the products and services of company goes through new
development that means the old product is innovated and has got new innovation that leads to
new features, textures and size of products. Innovation helps the products to get new features that
helps to gain competitive advantage and by making policies and strategies. To compete in this
dynamic market and gain more loyal customers it is ought by company to provide its customers
new and developed products. The nature and preference of customers keep on changing and so it
desired by companies as that will help them to gain more profit and contribute to economy. The
principles of innovation are discussed below:
Problems creating new ideas: When an organisation faces some problems then there comes the
role of innovation as the new solution is taken out. The solution of that problem is somewhere
innovating idea (Binder and Mantovani, 2017). As due to problem many questions arise and by
answering those questions there is idea that improves the situation in the organisation. This is a
good way to find the solutions and to develop product that is needed by the customers as there is

need to development in today's time. Spotify analyses the trends in the market and then makes
innovation.
System based innovation: There is always a systematic way in which innovation takes place.
There is are formal and informal ways of research. The system in like flow of targets, internal
execution, assistance and continuous improvement. Spotify has used formal systems and worked
based on ethics by following the rules and regulations and wants to become most largest music
provider. Everything that is done in a systematic way is successful and that has helped company
to satisfy needs and wants of the customers.
Innovation require passion: Innovation is a easy process but there is requirement of passion to
be able to innovate in a proper manner. The person who has interest and passion can execute it
effectively (Cook and Van der Veer Martens, 2019). So it is important to have knowledge as well
as interest in the field. With passion the company and managers are able to achieve the desired
goals by making strategies that would make new development in the product that is desired by
the customers.
Effective communication: It is important for organisation to tell and communicate well about
the trends and ongoing captivities to its employees, as they may have idea. The organisation that
follows proper communicating channels are able to make the employees participate in decision
making and they give new ideas to the company that helps them to innovate the products and
services. The better the communication system the more is organisation successful. Spotify
communicates in a well manner with its employees and the employees participate in giving
ideas.
Encourage comparison: There is lot of difference between cultures and religion and there are
changes between them. These difference give rise to inventions and innovation means a new
product is developed (LEE and SAVELYEVA, 2017). There are opportunities that arise due to
those differences and facilitates the innovation process. So this is important to understand them
and take measures as and when they are required.
Above mentioned are some principles of innovation that are driving the innovation
process and brings changes in the product and services offered by Spotify.