Ansoff Matrix of Spotify

Spotify is a Swedish media service and audio streaming multinational corporation. Daniel EK and Martin Lorentzon founded the audio streaming platform in 2006. Today, we’ll discuss the Ansoff matrix of Spotify; four growth matrix strategy analysis quadrants; market penetration, market development, product development, and diversification of the Ansoff matrix business example.

Elements of Market Penetration Strategy of Spotify

• Variety of podcasts options and dominating the podast market
• Recommending personalized songs and content relevant to the interest of the user
• Offering discounts to attract the attention of customers
• Collaborating with lead celebrities and influencers to amplify its market reach
• Emotional advertisement campaigns to connects with the customers
• Freemium service with limited features and music liberary access
• Target marketing and advertisement campaigns to approach the right audience

Top Selling Markets and Geographical Regions of Spotify

• Europe – 159 millions users
• North America – 111 million users
• Latin America – 116 million users
• Worldwide – 165 million users

Latest and Best Selling Collection of Spotify

• Creeping with the weekend and savage by Metro Boomin
• Cruel Summer by Taylor Swift
• Ella Baila Sola by Peso Pluma and Eslabon Armado
• As it was by Harry Styles
• Kill Bill by SZA
• Flowers by Miley Cirus
• Rapper Drake top male artist
• Taylor Swift top femaile artist

The Ansoff matrix of Spotify would focus on the four growth matrix strategy analysis quadrants; market penetration, market development, product development, and diversification. Here’s the Spotify Ansoff matrix company example as follows;

Ansoff Matrix of Spotify

Let’s discuss the four growth matrix strategy analysis quadrants of the Ansoff matrix of Spotify as the Ansoff matrix company example; they’re as follows;

Market Penetration Strategy of Spotify

The market penetration quadrant in the Spotify Ansoff matrix business example as growth matrix strategy analysis has the lowest risk rate in the growth strategy. It is because here the online audio streaming platform sells its current products and services in the existing customer market. However, the audio streaming market is growing, and the market penetration growth strategy is possible.

I-Multiple Pricing Packages

In order to attract the target various segments of the customer market, Spotify offers various types of pricing packages. They’re for families, individuals, students, mini, duo, and premium. However, multiple pricing packages help the audio streaming media platform to penetrate the market; and offer its existing content portfolio to the new customers of the same market.

II-Free First Month

Spotify also offers free access to the company’s music library with advertisements. If customers want an ad-free experience on the platform without any disruption; then they have to subscribe to the paid package. However, approximately 379 million users are using the free service of the music platform. The freemium service helps the company to further penetrate the market and approach price-conscious customers.

III-Social Media Sharing & Integration

Spotify allows its users to share their personal music collection or library over social media platforms. It helps the company to approach new customers and users with personalized recommendations of existing users.

Market Development Strategy of Spotify

The market development quadrant in the Spotify Ansoff matrix business example as growth matrix strategy analysis has a bit higher risk rate than the market penetration strategy. It is because here you expand your audio streaming market and offer your current products and services portfolio in the new market. However, you don’t know the culture and response of the new market; that’s what makes it riskier.

I-Global Market Expansion

Spotify is operating its business in roundabout 184 markets across the globe; the company built its offices in 16 countries. Media streaming is further entering new geographical regions and countries worldwide with native and indigenous music and podcasts in various languages.

II-Sponsorships

Spotify sponsors mega sporting events and teams like Barcelona Femeni (women’s football team) and Barcelona Football Club. It helps the company to approach new customers and emotionally connect with people in such mega sporting events. As a result, it strengthens the positive brand image of the company.

III-Celebrity Endorsements

Along with sponsoring mega-events, Spotify also hires various celebrities as brand ambassadors. They have a huge fan following, and their influence and endorsement help the company to approach new customers, regions, and markets. Some of the celebrity brand ambassadors of Spotify are as follows;

• Joe Scarborough
• La Cruz
• Erika Titus
• Nehaal Naseem

Product Development Strategy of Spotify

The product development quadrant in the Spotify Ansoff matrix business example as growth matrix strategy analysis has a higher risk rate than the market penetration strategy. It is because here you launch a new product service in the form of an audio podcast, songs, video podcast, or media services for the existing customer market. You would have to run new marketing and promotional campaigns for the new product and it makes it riskier.

I-New Artists

The objective of Spotify is to continuously increase its artist collection by bringing new artists onboard on the platform. It helps the company to offer a variety of music and podcast collections to listeners and users in various categories. More variety of artists would help the company to attract more people on the platform, and retain the existing users.

II-Song Recommendation

The AI algorithm of Spotify is very smart and it continuously analyzes the interests and choices of all the users and recommends a similar type of music and media collection to them. It helps the company to keep entertaining the existing users with new collections of their interests. As a result, it amplifies the user retention rate and increases their satisfaction level.

Diversification Strategy of Spotify

The diversification quadrant in the Spotify Ansoff matrix business example as growth matrix strategy analysis has the highest risk rate of growth strategy than all three previous growth strategies. It is because here you launch a new audio streaming product or service in a new customer market. You won’t know how your new market will react to the new items.

I-Horizontal Diversification

Spotify has been operating its business in the media streaming industry for a very long time. The company has successfully expanded its portfolio and business in the global market. The video streaming industry holds great growth potential; the company should consider expanding its platform or launching a new video music platform and video podcast for the customers.

Conclusion: Spotify Ansoff Matrix Company Example |Ansoff Growth Matrix Strategy Analysis 

After an in-depth study of the Ansoff matrix of Spotify; we have realized that Spotify is the world’s leading audio-streaming media platform. If you are learning about the online audio streaming platform Spotify Ansoff matrix company example; then you should keep in mind the abovementioned growth matrix strategy analysis quadrants; market penetration, market development, product development, and diversification.