SCHOOL OF BUSINESS

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STUDENT DETAILS

Student name: Tăng Chi Ngọc Student ID number: 22027034

UNIT AND TUTORIAL DETAILS

Unit name: Design Thinking for Creativity Unit number:

Saturday 8:00 A.M. –
Tutorial group: Tutorial day and time: 11:15 A.M.
Lecturer or Tutor name: Đoàn Đức Minh

ASSIGNMENT DETAILS

Title: Assignment 2
Length: 1800 words Due date: 27/03/2022 Date submitted: 27/03/2022
Home campus (where you are enrolled): Ho Chi Minh City campus

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signed.
 1. Rationale selection and new forms of creativity
Netflix is one of the leading companies in the streaming service industry, and in 2021,
Netflix was in the top 100 most innovative companies in the world (Forbes, 2021). Starting with
the idea of renting DVDs in 1997, after 10 years of innovating and developing, Netflix has
introduced an online streaming service in 2007, which has broken the traditional film-release
model and changed the way people watch movies (Muston, 2019). In an interview with CNBC in
2017, Netflix's CEO has shared that the reasons behind their success are to be creative, willing to
take risks, and open to new ideas (Morgan, 2021). Currently, Netflix is the most popular
streaming site with more than 222 million paid memberships. 
Recently, the COVID-19 pandemic has changed people’s lifestyles and habitats. Thus,
this was a chance for Netflix. According to BBC News, in the first quarter of 2020, Netflix has
attracted approximately 16 million subscriptions from new users (2020). However, from 2021,
facing many rising competitors such as Disney+ or Hulu, Netflix has recorded a slowdown in its
subscribers. Moreover, the company’s share price also decreased by about 10% (Rushe, 2021).
Thus, to increase its competitiveness and captivate more users, Netflix needs to be more
competitive. Currently, the pandemic has made everyone and everything lockdown. As a
consequence, people’s demand for cinema and gathering during and after the lockdown was
huge. For instance, in the EU countries, after the lockdown was eased, one cinema welcome
more than 200 customers per night (Jones et al., 2020). However, due to safety issues, most
cinemas only operate about 50 to 60% of their capacity, which cannot satisfy all customers’
demands. Thus, the company should catch this chance. Netflix now only allows its users to
stream movies on their accounts without sharing them with anyone else. However, the demands
now are to gather and watch movies together. Therefore, Netflix can create rooms or spaces
which allow its subscribers to watch movies together, even at a far distance. By doing this,
Netflix's users can gather to watch movies together without going to the cinemas, which will
help Netflix retains its loyal customers and attract new ones. Another point is that  Netflix has
different movies libraries for each country, which means that its users can only watch the
contents from their regional library. Consequently, people may avoid Netflix because of the
limited regional selections. Therefore, to approach more users in different regions by allowing its
subscribers to access unlimited content from different countries. 
 2. Potential creativity blocks
The way to innovations is not easy. When coming up with new ideas, businesses may be
prevented by different blocks, which come from both inside and outside of the company. One
potential block that counters Netflix from the stream of creativity is the pressure of keeping up
with its competitors. From the end of 2019, the demand for online streaming has increased
significantly. A survey in 2019 by Deloitte shows that the percentage of subscribers to streaming
services was higher compared to the previous years (Wham, 2020). Moreover, the data also
shows that people spend up to 50% of their time on streaming services. Thus, this makes the
online streaming market becomes more fierce than ever, which required the companies to
differentiate their services to stand out to the customers. For Netflix’s case, facing many rising
competitors such as Disney+, HBO, or Hulu may cause the company pressure in finding ways to
differentiate itself from the competitors. Although pressure can drive innovations, however, too
much pressure may prevent Netflix from creativity. 
3.  Potential innovation sources
One potential source of innovation for Netflix is the “shocks to the system” (or
unexpected occurrences), in this case specifically is the COVID-19 pandemic. The pandemic has
negatively affected the world and changed everyone’s lives. Due to safety concerns, people are
forced to stay indoors and prohibited from social interactions. Thus, people’s demand for online
entertainment and gathering increased due to the lockdowns. According to a survey in 2020, US
teenagers and young adults are more likely to use the Internet for entertainment and socialization
purposes during the COVID-19 crisis (Appendix 1) (Vogels, 2020). Facing these changes, the
company may need to develop a new form of creativity to adapt to the changes and attract more
customers, which becomes a potential source of innovation. 
Another good source for new forms of creativity is the industry and market change. As
mentioned above, the crisis has changed the world, not only people's lives but also impacts every
industry. For the online streaming industry, the COVID-19 pandemic is a big chance for it to
grow and develop. According to the CEO of Bitmovin, due to the lockdowns, the viewership of
online streaming platforms rise significantly. Compared to 2019, streaming video watching
increased 75% in the second quarter of 2020. Moreover, since the crisis occurred, the time that
the viewers spent on online streaming services also rose by 220% (Lederer, 2021). However, as
the industry is growing, more competitors will enter, which makes it more fierce. Thus, this
could become a strong groundwork for innovation as the company has to make itself different
and more competitive to stay in the market. 

4. Creativity stimulating techniques

Creativity plays an important role in all businesses. Companies with higher creativity
may come up with greater innovations, and as a result, will gain greater long-term successes.
Thus, it is important for businesses to build a creative environment by different techniques. 
One stimulating technique that Netflix can apply is the freedom to explore new ideas.
Building an organizational structure where employees are having the right to raise their voices
and share their thoughts will trigger their confidence and make them feel being valued, which
will result in higher creativity and innovations. Currently, Netflix has successfully applied this
structure. Marc Randolph, the first CEO of Netflix has shared that the reasons behind their
success are being open-minded and being brave (Morgan, 2021). Under Netflix’s working
environment, employees are encouraged to share their ideas and take risks when needed.
Moreover, Netflix also builds a workplace where their employees can feel free to give feedback
and comments to each other (Netflix, n.d.). Thus, by creating an environment like this, Netflix
makes their employees feel more confident to raise their ideas, which leads to higher creativity
within the company.
Another method that can be used is diversity in teams, where different genders, races, and
cultures are all valued. Having employees from different countries and cultures helps the
company has different points of view, which can lead to more innovations. A study by Economic
Geography in 2016 shows that companies with diverse leadership teams are more likely to come
up with innovations than the homogenous leadership one (David Rock & Heidi Grant, 2016). As
Netflix is an international company, it currently doing a great job of having a diverse workplace
since the company welcomes employees from all countries and cultures. According to the
company’s statistics in 2021, the number of Black employees rose from 8.6% to 10.7%, and the
number of Black leaders rose from 10.9% to 13.3% (Netflix, n.d.). In addition, in its senior
leadership team, 45% are women and 22.7% of them are from excluded ethnicities. 

5. Macro forces and CSR action plan

a. Economic force
The COVID-19 pandemic has put a strain on the economy of Vietnam. Because of the crisis,
many businesses were closed, thus many people are unemployed.  In the third quarter of 2021,
the unemployment rate reached 3.72%, which increased 1.08% to the last quarter (General
statistic office, 2021). In addition, the crisis also slow down the development of different
industries.

b.CSR plan:
After the pandemic, many people still have a difficult life. Therefore, it is suggested that Netflix
should conduct a CSR plan named “Sharing is caring”. The objective of the strategy is to share
information about people who have difficult lives and need helps. Netflix can produce life TV
series talking about the difficult people and spread the information to everyone.
 REFERENCES
BBC News. (2020, April 22). Netflix gets 16 million new sign-ups thanks to lockdown.
https://www.bbc.com/news/business-52376022#:%7E:text=Netflix%20has%20seen
%20subscriber%20numbers,the%20year%2C%20the%20firm%20said.
David Rock, & Heidi Grant. (2016, December 4). Why Diverse Teams Are Smarter.
Harvard Business Review. https://hbr.org/2016/11/why-diverse-teams-are-smarter
Jones, S., Connolly, K., & Tait, R. (2020, July 1). “Demand is huge”: EU citizens flock to
open-air cinemas as lockdown eases. The Guardian.
https://www.theguardian.com/world/2020/may/29/demand-is-huge-eu-citizens-flock-to-open-air-
cinemas-as-lockdown-eases
General statistic office.
(2021)https://www.gso.gov.vn/en/data-and-statistics/2021/07/report-on-impact-of-covid-19-
pandemic-on-labour-and-employment-of-the-second-quarter-of-2021/
Lederer, S. (2021, June 22). Costs, Benefits And Challenges Of The Pandemic For
Streaming And OTT Services. Forbes.
https://www.forbes.com/sites/forbesbusinesscouncil/2021/06/22/costs-benefits-and-challenges-
of-the-pandemic-for-streaming-and-ott-services/?sh=130782122867
Netflix. (n.d.). Netflix Culture. Netflix Jobs. https://jobs.netflix.com/culture
Netflix. (n.d.). About Netflix - Our Progress on Inclusion: 2021 Update. About Netflix.
https://about.netflix.com/en/news/our-progress-on-inclusion-2021-update
Rushe, D. (2021, April 21). Netflix records dramatic slowdown in subscribers as
pandemic boom wears off. The Guardian.
https://www.theguardian.com/media/2021/apr/20/netflix-records-dramatic-slowdown-in-
subscribers-as-pandemic-boom-wears-off
Vogels, E. A. (2020, July 27). From virtual parties to ordering food, how Americans are
using the internet during COVID-19. Pew Research Center. https://www.pewresearch.org/fact-
tank/2020/04/30/from-virtual-parties-to-ordering-food-how-americans-are-using-the-internet-
during-covid-19/
Wham, E. (2020, July 15). Competition In Streaming Services Is Heating Up. Disruptive
Competition Project. https://www.project-disco.org/competition/053019-competition-in-
streaming-services-is-heating-up/
 APPENDIX
Appendix 1: 2020 survey 

(Vogels, 2020)