The current market playing field
iTune audio playback program developed by Apple has faced stiff competition from other companies that specialize in audio playback streams (Hennessy & Naijar, 2017). Spotify also seems to be gaining ground as a competitor to iTunes. Spotify is ranked 20th among all other internet-based companies with a revenue of 6.76 billion Euros. Apple, on the other hand, is ranked second among other technology-based companies with music payback features.
The competition progress
Spotify has placed much emphasis on the use of its algorithm to offer customer satisfaction by determining their taste and preferences in music through its software and providing the music to the consumers.
This has enabled the company to increase the number of its subscribers to over 113 million. The company has a 30 % yearly growth, an aspect that greatly threatens Apple iTunes.
Apple new strategies
The adoptions of vertical integrations have been the most recent move that is expected to help Apple gain a competitive advantage over its competition (Yang et al., 2014). Unlike the other companies that pay to stream music produced by artists, Apple seeks to develop a production studio where it will produce music that will be solely accessed through iTunes, an aspect that is expected to cut out the supply chain.
What coming up
The vertical integration of music productions with streaming is the next strategy. This will entail the building of studios by Microsoft and signing artists to produce music that will be accessible only through iTunes. This will ensure that consumers buy apple products to gain access to the music.
Winners move
The success of vertical integrations lies on the offer given to the music artist to make them sign labels with Apple studios. This will be in the form of the services and benefits the artist will have. Vertical integrations as a strategy have a high level of success, which will be determined by the number of artists who will sign their labels with them (Wouters, 2014).