Spotify's Innovation: Blue Ocean Strategy and Future Development

This report examines Spotify's innovation strategy through the lens of the Blue Ocean theory. It begins with an introduction to innovation and the Blue Ocean framework, followed by a detailed exploration of the theory's principles, including creating uncontested market space, focusing on the big picture, reaching beyond existing demand, and getting the strategic sequence right. The main body of the report applies these principles to Spotify's business model, analyzing how the company has implemented the strategy and discussing its benefits and limitations. Furthermore, the report outlines a process for implementing the Blue Ocean strategy within Spotify, covering key steps such as choosing the right starting point, assessing the current state, analyzing limitations, reconstructing market boundaries, and selecting the right strategic moves. The report concludes with a discussion of the theory's advantages, such as expanding business success and its simple methodology, and its disadvantages, including the lack of a specific blueprint and cost limitations. Finally, the report projects the application of the Blue Ocean strategy for Spotify's future development, highlighting the potential for continued growth and market dominance. This report is a valuable resource for understanding innovation and strategic management within a leading company.

Managing Innovation

Table of Contents
INTRODUCTION.................................................................................................................................3
MAIN BODY........................................................................................................................................3
Innovation theory...............................................................................................................................3
Application of innovation strategy.....................................................................................................7
Application of innovation theory in future development...................................................................9
CONCLUSION...................................................................................................................................10
REFERENCES....................................................................................................................................11

INTRODUCTION
Innovation is defined as utilising new combination of practices to entertain similar
operations. Further the innovation is also to create own practices that can generate better
outcomes. This project is based on the evaluation in respect to blue ocean theory of
innovation in Spotify Company. This report will provide a brief overview about the
innovation theory. Different principles associated with the blue ocean innovation theory will
define in this project. What is the implementation process related to such theory will also
clarify in this project. This study will also clarify about how this theory of innovation evolve
with the support of critical assessment in respect to its benefits and limitations. Furthermore,
on the basis of different aspects related to the innovation theory in this report various ways
will also project in regards to the organisation that how it can implement the theory in future
growth and development. For future development application of this theory will be projected.
MAIN BODY
Innovation theory
Blue Ocean was a book published over the innovation practices. This is about to
constantly create new practices or to support new areas that can drive better operational
outcomes. Blue ocean innovation theory focuses over generating innovation with out of the
box kind of mentality (Abdolshah and et.al., 2016). This strategy for innovation implement
only in a certain situations where possibilities for higher profits exist along with no
competition or high competition. All such innovative ideas that can bring heavy returns in
favour of the organisation this strategy implement in regards to all such ideas. This is about to
introduce new features and engaged with new demands in order to cut the market
competition. Blue ocean strategy can be stated as pure innovation strategy as organisation get
to feature something new that never existed and in different direction as compare to its
normal business operations.
Principle of blue ocean innovation theory
Blue ocean innovation theory work on the basis of certain principles that can be
projected in the following points. All these principles are the basis of the theory of
innovation. Tools discussed under this strategy are identified as creating uncontested market
space, making competition irrelevant, creation and capturing of new market in same market

and breaking the value cost trade off. All these tools make the strategy more specific in
regards to channelizes innovation in working practices.
How to create uncontested market space by reconstructing market boundaries
How to create uncontested market space by reconstructing market boundaries is the
first principle behind the blue ocean strategy of innovation. This innovation strategy give
emphasis over establishing a unique space in the target market for organisation that can allow
the organisation taking competitive advantages in market (ALBAYRAK and BEYBUR,
2018). In the blue ocean strategy of innovation companies set to creation of new dimensions
for business and try to set new roles of the organisation. New products are developed along
with the regular business products that can support the organisation in establishing new
heights for business. The ides company implement in this strategy allow the organisation to
again establish a brand value. Innovation should allow the organisation to expand the existing
business scale and this principle guide the company to think about such an idea that scale the
business growth at all new level. Its important to remonstrate market boundaries to have a
successful innovation for the growth of business. Its crucial that due to innovation company
should reach to a new heights in business and cater to much expanded market as compare to
its earlier market reach. Innovation seek huge investment of company’s resources so it
becomes crucial for the organisation to value such investment. If the innovation can not bring
new dimension to business growth or process than it is void to innovate on the basis of this
principle of innovation.
Focus on the big picture
Blue ocean strategy of innovation give emphasis over principle denoted as focus on
the big picture. Its important to give priority to big picture while innovating in the product
and services of organisation. Big picture denote in this principle is the maximum scope of
market that can be covered by company with the support of innovation. Company should not
only focus on achieving the small growth rate or product development feature it must give
emphasis over leading the entire market with the support of innovation. As this strategy of
innovation do not prioritises small changes in product or process with the guidance of
innovation. Blue ocean strategy always reer for big changes and influence development in the
company’s business dimension (Berezkina, 2016). Spotify is a new brand and this strategy of
innovation will boost the company’s growth to all new level. Small changes in the product of
company will not allow the organisation to lead the entire market. Organisation must look for

creating a new way of serving the services with the support of innovation. Big picture denote
to entire market in this innovation strategy. Focus on big picture make the innovation more
valuable and large in context to organisation.
Reaching beyond existing demand:This is another key principle begind the blue ocean
strategy for innovation. Innovation should support the organisation in reaching demand of the
product beyond the existing scale in market. If the innovation can not support the boost in
sales of company’s product than its not worth to invest or proceed for innovation. Changes
are implemented make the product more valuable and advanced in term of its utilisation.
Spotify can expand its current market demand by innovating under the blue ocean strategy for
innovation. In term of its number of users company should aim to increase the existing
number. To reach the existing limit its essential that company should focus over improving
the quality of service of company’s services (Hasan and et.al., 2017). Anotheraspect related
to reaching beyond the existing demand is to deal with the issues face by udders of spotify. If
the organisation not able to find the solutions of all issues and problems spotify users are
facing than it will not be able to improve its existing demand. Today the number of channels
has increased immensely so the level of competition for companies is huge and aggressive.
Due to the multiple options available with customers service quality becomes key to make the
buying decision. Innovation must guide the organisation to deal with the issues users are
facing along with facilitating more services to customers.
Getting the strategic sequence right
It becomes important to get the strategic sequence right when it comes to innovate in
business. To have a successful innovation in business it becomes crucial to get done the
strategic sequence. In the initial stage address the key areas that seek some kind of innovation
or improvement, identify the possible scope of development once the areas are identified,
than formation process started. Strategies are developed to get done such identified key areas.
The next stage is to implement such strategies (Hindarsah and Soeprapto, 2020). Control and
evaluation of such strategies is the next stage. All these stages allow the organisation to
introduce innovation in the best way possible. Innovation supports the organisation in
reaching new height for the business operations. Implementation the process in right way
make the entire process more fruitful for organisation. Organisation can only achieve success
if its implement the process right.

The above mentioned principles are the key principles associated with the innovation.
Blue ocean theory of innovation have been very successful due to these four principles that
lead the innovation to massive success.
Process of theory
Following is the process that can be implemented by the Spotify Company to
introduce innovation with the support of blue ocean strategy.
Choosing right place to start: Choosing right place to start is the first part of the process. It
becomes important to choose the right place to start the entire innovation (Kim and
Mauborgne, 2017). It is key that organisation chooses the right place from where the
innovation can be started. This can be the specific segment about the services of organisation
to start in order to innovate in the product of organisation.
Getting clear about current state:What is the current state of organisation. It must clear that
where the organisationstand as compare to other competitors. Getting clear in respect to
current state make the innovation successful in respect to organisation (Lee, Wang and
Chung, 2017). While innovating identifying the issues play a key role and this stage is about
to highlight al the key point about which organisation seek a strategic development.
Analyse limitation: Innovation consume financial resources of the organisation. Risk is also
huge when it comes to innovate in the business operations. It becomes crucial while
innovating in business functions to analysis the limitations. Once the limitations are identified
than company can make suitable strategies to overcome the limitations associated with the
innovation practices.
Systematicallyreconstruct market boundaries:This is the fourth state where market
boundaries are reconstruct. This is an important stage involve in innovation. Reconstructing
market boundaries make the organisation ready to explore new heights with the support of
innovation.
Selection of move:This is the final stage of the process where organisation selects the right
move to innovate. Outcomes of the innovation depend upon this part.
The above mentionedstages are the different part of the process of innovation.
Evaluation of theory

This theory of innovation contains the following advantages and also limitations.
Advantages of blue ocean strategy
This theory of innovation carries the following advantages that can be
projected in the following manner.
Expand the business success: Blue ocean strategy simply expands the success of business.
This is a simple concept of innovation which emphasis on enhancement of growth of business
with the support of innovation (MARINO, 2017).
Simple method: This biggestadvantageabout the blue ocean strategy is that it is simple
innovation method. This is a simple way to innovate in business. This technique provides a
right mindset to management in respect to innovate about the product in business.
Emphasis over domination: Blue ocean strategy gives emphasis to market domination with
the support of innovation. This give priority to innovate in such a way that organisation gets
to dominate the entire market (Suhendi, 2020). This approach allows the organisation to
enhance the scale of business operations by attracting more number of customers in the target
market.
The above mentioned are the key advantages associated with the blue ocean strategy
of innovation.
Disadvantages of blue ocean strategy
Following are the disadvantages associated with blue ocean strategy.
Not provide any proper blue print: This strategic choice does not cater any specific blue
print of innovation (Strauß, 2020). This theory does not support any specific blue print over
innovation and its related practice.
Does not consider cost limitation: This strategy do not support any cost limitation. As the
innovation requires investment of company’s resources. This do not consider the limitation of
organisation respect to cost affordability.
The above mentioned points are the limitation attached wih the blue ocean strategy.
Application of innovation strategy
Company background

Spotify Company is a Sweden based organisation established din the year 2006.
Company serve in approximately 17 locations at global level. Daniel Ek and Martin
Lorentzon are the two founders of the organisation. Company is associated with audio
streaming and podcasting mode of entertainment as a part of its business services (Ogbogu-
Asogwa and et.al., 2017). Headquarter of the company is located in Sweden. Company usage
the audio streaming mode as a part of its services. This is an internet based model which
allows users to get access to podcast, music and streams of different artist with the support of
internet over the application of company. This application can easily be installed over play
store, apple store and other such platforms. In all the services company grant to its users the
organisation has entertained a massive success in the business at all its business location.
Number of users is also increasing year after year of the organization that also a key
performance indicator of the organisation.
Historical development
Over the period of time Spotify Company have been upgraded year after year in term
of number of active users over this platform. Company launched its own streaming platform
with the guidance of the blue ocean strategy. Company has developed this product as a
convenient platform for audio streams and provided an authentic taste to all the music lovers.
Company grant access to all podcast and music of different famous and upcoming artist over
this platform. This product developed by company fit in to the different fundamentals and
principles of the blue ocean strategy such as this could create uncontested market space for
itself due to unavailability of the similar products in market, it could make competition
irrelevant as this was unique and uneasy to copy, it could create its own demand in market
and also it could break the value trade off. All the fundamentals behind the blue ocean
strategy could justify by the Spotify. Company have always been taken a guidance of blue
ocean strategy of innovation to enhance the growth of the business. Initially company started
at a very minor level and due to the guidance of blue ocean strategy of innovation company
get to experiment in its products and services (Rezaire, 2019). Organisation gets to deliver the
best level of experience to its users due to the innovation strategy call as blue ocean strategy.
Initially company was onlyrestricts to live music streaming but now company has moved to
podcast of different artist like stand up which has increased the exposure of this application in
term of total number of active users. The application of blue ocean strategy has allowed the
organisation to make the continuous changes in the service which can grant better experience
to all its listeners. It has utilised the talent of different artist by converting into a successful

business idea. The application allow uninterrupted podcast and music experience only with
few and minimum advertisements that do not cater any extra inconvenience to its users.
Continuous improvement in services makes the application more popular in between its
users. This platform has contributed in the podcast sector massively as earlier not much
people were aware about the podcast which could allow the organisation to make the best
user experience. This application could continuously grow the total number of active users by
catering the best level of podcast and audio streams. The management has aimed to attract
customers with such podcast that are popular in the customers and people across the globe.
Application of innovation theory in future development
The management of Spotify Company can take a guidance of blue ocean strategy in
its future development plans. Organisation is growing rapidly across the globe and it has
received a massive growth in total number of active users over a continuous basis. The
product of company match the all different requirements associated with the blue ocean
strategy. This was unique in its own term which could allow the company to gain customer
engagement quickly. Currently spotify company cater to its customer an audio stream model
of entertainment in future company can grant access of video streaming mode of
entertainment. Management of Spotify Company can allow its users to get exposure of
different videos that will improve the experience of all its users and it will also add value in
entertainment segment of company (Santi, 2019). Video streaming will allow the company to
increase the reach of its customers and it will also allow the organisation to attract more
sponsors over its network. Blue ocean strategy also guides to make such changes that can
allow company to lead and dominate the entire market. Spotify Company can enter into its
own video and audio streams features where it can provide a platform to upcoming artist and
make content with such artists. This will increase the reach of this platform not just in
between the listeners or audience but along with it will improve the reach of this platform in
between artist all across the globe. The increasing popularity of this platform could improve
the interest of many artists at a global level. This allows the artist to make the name at a
global level. The video streaming feature will create a volatile space for all the artist and
audience in term of reach. Video streaming feature will be a true sponsorship for the talent of
all different artists across the globe. Spotify Company can also collaborate with the
established talent to release its own original videos and audios that will further boost the
growth of this platform all across the globe.

The future plan of company should be focused over continuous imprudent in the
services. Company can differentiate its different podcast on the basis of the nature of audio
into different segments such as sports, music, podcast, stand up and different other segments.
This will make more clarity in the service of company. It will create more reach of company
in between its customers. Its important to continuous grows the product of company in order
to achieve the success in business (Sitinjak, Pramawijaya and Gunawan, 2018). The future
plan of company can also guide the company to expand the business at more locations across
the globe. Currently SpottifyCompany serve its services at approximately 17 locations at a
global level which further can be increased by expanding business in other locations also at a
global level. This will increase the business growth of company and also the total number of
active users over this platform.
CONCLUSION
This report has supported the innovation and its associated strategy. Blue ocean
strategy is one of the key strategic choice company carry in term of innovation. This strategy
support innovation in four principles such as How to create uncontested market space by
reconstructing market boundaries, Focus on the big picture, Reaching beyond existing
demand and getting the strategic sequence right. All these principles will support the
company in a right way to innovate in its products and services. Innovation is about to
continuously improved the products and services of company. This strategy guide the
organisation in such a direction that organisation should promote innovation in a more
sustainable manner. Innovation allows company to improve the total number of users actively
which also further expand the growth of the organisation.

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