1. Task 5: SWOT Analysis (LO3)
Background Information on Spotify itself:
Spotify is a commercial music streaming service providing digital rights managementrestrictedcontent from record labels including Sony, EMI, Warner Music Group and
Universal.Launched in October 2008 by Swedish startup Spotify AB, the service had approximately
10 million users as of 15 September 2010,about 2.5 million of whom were paying users. ¹
Music can be browsed by artist, album, record label, genre or playlist as well as by direct searches.
On computers, a link allows the listener to purchase selected material via partner retailers. ¹
A six-month free trial period is activated upon account registration or first login with a Facebook
account, allowing the user to listen to an unlimited amount of music supported by visual and radiostyle advertising. After the trial, Spotify has a listening limit of 10 hours per month, divided into 2.5
hour weekly portions (unused hours carry over). ¹
Strengths of the MP3 product:
This particular MP3 player is unique in the sense that it streams music from the internet through
means of Spotify, which will prove effective in attracting the attention of the consumer who are
categorised in the age group of 10+, as music has no age limit.
Another strength would be that it is linked to Spotify which means
that the consumer can obtain music instantly through this
programme at any time of the day. The fast streaming programme
is embedded into the MP3 player, which makes it even easier for
the audience to download music as they do not have to go to the
effort of downloading the app. Apple devices also have a similar
feature where iTunes is already installed on the device. However,
they do not have Spotify unless you download it from the App store,
which is rather inconvenient and time consuming for the audience
of the product itself. However, some consumers may not like the
fact that they do not own the music which is why they may choose
iTunes over Spotify, as once the subscription to Spotify has been cancelled, the music will be
immediately removed from their music playlistwhich some people may find frustrating, as their
ability to listen to their favourite songs will be diminished. Censorship could also be an issue with
both the device as well as Spotifydue to the fact that the music that can be accessed may not be
suitable for a younger audience who may purchase a song and be completely unaware of its explicit
nature. This may cause problems as the music is not monitored and the parents or guardians are
likely to disapprove of this and possibly complain to the company giving them a bad reputation. In
order to solve this problem, the guardian of the consumer could check the content that features in
the music is if they are concerned about what their child is downloading.

2. Weaknesses:
A weakness to the MP3 player could be that without internet access, the Spotify linked to the
product will become difficult to use, as the consumer will not be able to download any music and
will have to rely on the music they already have in their library. Another weakness could be that the
MP3 player could be a distraction as the consumer may have other tasks that they have to fulfil and
if they are listening to music, they may defer from these tasks which may be important. Also, if there
are weather problems occurring it may interfere with the internet and therefore, the audience will
not be able to stream any new music until the connection has been fixed. This may irritate those
who are paying £10 a month for the premium subscription of Spotify. In order to resolve the issue
of an internet connection error, the consumer could contactSpotify headquarters, where they could
ask to freeze theirSpotify so that they don’t have to pay the bill when there connection isn’t working.
Once this connection problem has been solved, the consumer can continue paying for their
subscription. Another way this issue could be solved is that Spotify could offer vouchers for a music
store such as HMV , where the consumer can purchase the songs that they wanted to listen to while
there subscription has been frozen as a way of providing good customer service and showing that
they value the needs of the customer.
Opportunities:
Certain opportunities may arise that could potentially make the product more successful in the long
run as Spotify may introduce a seasonal aspect to the programme such as Christmas songs,
Valentines songs, as well as music from films and musicals that are popular at the time, making
Spotify a modern and up to date platform. The consumer would appreciate this element and it may
convince them to purchase the MP3 player solely on this aspect. The target market of the MP3
player ranges from 10+, which means that the product is marketed towards a wide range of
individuals, as opposed to a select
group, which is a good selling
point and is also an opportunity
for the company to expand their
profit region and increase their
sales of the stated product. Apple
products also have a universal
target market, so it may be
challenging to go against this
multi-million dollar company, but
a marketing strategy would have to be put into place before the product would be promoted. The
development in technology is also another great opportunity for the MP3 to become an instant
success, as sales and offers could be included with the purchase of the product, for example, ‘20%
off of the MP3 player if you sign up to Spotify Premium’. This is an incentive for the consumer to buy
the product; therefore, more sales will be initiated and in turn, the popularity of the product will
increase, which will put it on the competitive market with Apple. The company of Spotify, have the
opportunity to market and promote their brand to the audience of the product by creating
merchandise such as; tote bags, stickers, wristbands, t-shirts and mugs. This would initially be a form

3. of ‘free’ advertising for the company, as their merchandise will be worn or presented in the public
with their logo on, which may convince other people to research the company and therefore, the
brand of Spotify will initially become more renowned as an institution. Apple are an existing
company that are known for their use of merchandising in order to promote their company, as they
issue stickers in the box of the item that you purchase from them, which is a free marketing tool for
the company to subliminally utilise, in order for the consumer to place this sticker somewhere where
it could be viewed by others, therefore, making the company more well-known and therefore more
popular.
Threats:
It is clear that this product (MP3 player) may face certain threats posed by existing competitors in
the market, including Apple that target a similar audience with a similar product range. However,
competition can be a good thing as it keeps the companies on their toes, constantly coming up with
new ideas regarding how they can be the most popular
company in the technology market. Also another threat
could be that other companies may issue products that are
cheaper than this particular MP3 player, which may put the
profits down and will result in consumers choosing the
cheaper option as they see it as value for money. Also, there
may be a music streaming website that may be less money
than using Spotify, which means that the ethos behind the
product will become obsolete if a new music streaming app
becomes more popular, which will put the company out of
business. Another threat could be that the MP3 player may
need regular software updates in order for it to run
efficiently, however, if this is done frequently, the consumer
may get irritated by it and from this; they may become
disinterested in the product. In order to overcome the threat of competition on the market, the
company could initiate a strategy where they create an influential advertising campaign that draws
in the attention of the consumer of the product, which features persuasive language as well as
‘money-off’ offers in order to get the majority of the market on their side, beating their competitors
such as Apple. Also, if the company build up a good set of customer service skills, the consumer will
be obliged to purchase from the company in the future and become a regular customer, if they are
treated well by the members of staff hired by the company that is Spotify.
¹ http://en.wikipedia.org/wiki/Spotify