Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

College of Business Administration

Department of Human Resource Management

Anonas St., Mabini Campus, Sta. Mesa Manila, Philippines

Group Assignment in

Strategic Innovation and Design Thinking

HRMA 30093

Submitted by

BSBA HRM 4-1N, Group 4

Acosta, Christine L.

Agaloos, Krishia Marie L.

Bunalade, Jem Karen B.

Dungo, Ma. Shamiya A.

 Gutib, Jelly Ann R.

Submitted to

Prof. Sandra Marcos

November 2021

TABLE OF CONTENTS

A. THEORETICAL ASPECTS
3

1. What is Design Thinking? 3

2. Importance of Design Thinking 3

3. Five Stages of Design Thinking 4

4. Design Thinking Principles that redefine business management 6

B. CASE STUDY
7

CASE STUDY ANALYSIS ON AIRBNB 7

Overview 7

Problem 8

Solution 8

Results 9

Additional Information about Airbnb 10

CASE STUDY ANALYSIS ON PILLPACK 12

Overview 12
Problems 12

Solutions 12

Results 13

Additional Information about PillPack 13

C. PERSPECTIVES “There’s No More Business As Usual” 14

1. Nokia Corporation 14

2. Kodak 15

3. Sbarro 15

4. Forever 21 16

5. Apple 16

Conclusion 16

REFERENCES
18

A. THEORETICAL ASPECTS

1. What is Design Thinking?

● According to Herbert Simon (1969). A design-centric mode of thinking is a

process of building up ideas which is foundational to the practice. In short, design
thinking is the transformation of existing conditions into preferred ones.

● Design thinking is the search for a magical balance between business and
art, structure and chaos, institution and logic, concept and execution, playfulness
and formality, and control and empowerment.

● A framework for a human-centered approach to strategic innovation and a

new management paradigm for value creation in a world of radically changing
networks and disruptive technology.

● Design thinking is about cognitive flexibility, the ability to adapt the process
to the challenges. Design thinking empowers and encourages us to experiment.
2. Importance of Design Thinking

● Design Thinking is extremely useful in tackling problems that are ill-defined

or unknown, by re-framing the problem in human-centric ways, creating many
ideas in brainstorming sessions, and adopting a hands-on approach in
prototyping and testing.

● Helps in tackling creative challenges. Design thinking gives you an

opportunity to take a look at problems from a completely different perspective.
The process of design thinking allows you to look at an existing issue in a
company using creativity.

● Helps in effectively meeting client requirements. As design thinking

involves prototyping, all the products at the MVP stage will go through multiple
rounds of testing and customer feedback for assured quality.

● Expand your knowledge with design thinking. The design process goes
through multiple evaluations. The process does not stop even after the
deliverable is complete.

● Has the capacity to solve the next important mystery and advance still further
ahead of its competitors.

3. Five Stages of Design Thinking

● Empathize

The first stage of the Design Thinking process is to gain an empathic

understanding of the problem you are trying to solve. This involves consulting
experts to find out more about the area of concern through observing, engaging,
and empathizing with people to understand their experiences and motivations, as
well as immersing yourself in the physical environment so you can gain a deeper
personal understanding of the issues involved. Empathy is crucial to a human-
centered design process such as Design Thinking, and empathy allows design
thinkers to set aside their own assumptions about the world in order to gain
insight into users and their needs.
Typical activities:

o Observations. You’ll go where your users go and see what they care
about.

o Qualitative Interviews. You’ll hold one-on-one interviews with a

handful of your users to understand their attitudes on the topic you are
exploring. Asking someone to tell a story about the last time they
experienced the problem you’re investigating provides a rich description
that highlights details you might not have otherwise considered.

o Immersions. Step into your user’s shoes so you can feel and
experience their day-to-day.

● Define

During the Define stage, you put together the information you have created and
gathered during the Empathize stage. This is where you will analyze your
observations and synthesize them to define the core problems that you and your
team have identified up to this point. You should seek to define the problem as a
problem statement in a human-centered manner. The Define stage will help the
designers in your team gather great ideas to establish features, functions, and
any other elements that will allow them to solve the problems or, at the very
least, allow users to resolve issues themselves with the minimum of difficulty.

Typical activities:

o Clustering and Themes: There’s a lot of different ways to go about the

Define phase, but it’s safe to say you’ll need a wall of sticky notes; these
will be filled with the quotes, observations, and ideas you heard
throughout your research. Group and cluster ideas together until you find
the prevailing or most prominent themes
● Ideate

During the third stage of the Design Thinking process, designers are ready to
start generating ideas. You’ve grown to understand your users and their needs in
the Empathize stage, and you’ve analyzed and synthesized your observations in
the Define stage and ended up with a human-centered problem statement. With
this solid background, you and your team members can start to "think outside the
box" to identify new solutions to the problem statement you’ve created, and you
can start to look for alternative ways of viewing the problem. You should pick
some other Ideation techniques by the end of the Ideation phase to help you
investigate and test your ideas so you can find the best way to either solve a
problem or provide the elements required to circumvent it. Some examples of
Ideation Techniques are Brainstorm, Brainwrite, Worst Possible Idea, and
Scamper.

● Prototype

This is an experimental phase, and the aim is to identify the best possible
solution for each of the problems identified during the first three stages. The
solutions are implemented within the prototypes, and, one by one, they are
investigated and either accepted, improved, and re-examined, or rejected based
on the users’ experiences. By the end of this stage, the design team will have a
better idea of the constraints inherent to the product and the problems that are
present and have a clearer view of how real users would behave, think, and feel
when interacting with the end product.

● Test

Designers or evaluators rigorously test the complete product using the best
solutions identified during the prototyping phase. This is the final stage of the 5
stage-model, but in an iterative process, the results generated during the testing
 phase are often used to redefine one or more problems and inform the
understanding of the users, the conditions of use, how people think, behave, and
feel, and to empathize. Even during this phase, alterations and refinements are
made in order to rule out problem solutions and derive as deep an understanding
of the product and its users as possible.

4. Design Thinking Principles that redefine business management

● User-centricity and empathy

Design thinking is all about finding solutions that respond to human needs and
user feedback. People, not technology, are the drivers of innovation, so an
essential part of the process involves stepping into the user’s shoes and building
genuine empathy for your target audience.

● Collaboration

The aim of design thinking is to pool a diverse variety of perspectives and ideas;
this is what leads to innovation! Design thinking encourages collaboration
between heterogeneous, multidisciplinary teams which may not typically work
together.

● Ideation

Design thinking is a solution-based framework, so the focus is on coming up with

as many ideas and potential solutions as possible. Ideation is both a core design
thinking principle and a step in the design thinking process. The ideation step is a
designated judgment-free zone where participants are encouraged to focus on
the quantity of ideas, rather than the quality.

● Experimentation and iteration

It’s not just about coming up with ideas; it’s about turning them into prototypes,
testing them, and making changes based on user feedback. Design thinking is an
 iterative approach, so be prepared to repeat certain steps in the process as you
uncover flaws and shortcomings in the early versions of your proposed solution.

● A bias towards action

Design thinking is an extremely hands-on approach to problem-solving favoring

action over discussion. Instead of hypothesizing about what your users want,
design thinking encourages you to get out there and engage with them face-to-
face. Rather than talking about potential solutions, you’ll turn them into tangible
prototypes and test them in real-world contexts.

B. CASE STUDY

CASE STUDY ANALYSIS ON AIRBNB

Overview

Airbnb is an online marketplace that connects people who want to rent out their homes
with people who are looking for accommodations in that locale. It currently covers more
than 100,000 cities and 220 countries worldwide. The company’s name comes from “air
mattress B&B.”

For hosts, participating in Airbnb is a way to earn some income from their property, but
with the risk that the guest might do damage to it. For guests, the advantage can be
relatively inexpensive accommodations, but with the risk that the property won’t be as
appealing as the listing made it seem.

Airbnb, Inc. is an American company that operates an online market place for lodging,
primarily homestays for vacation rentals, and tourism activities. Based in San Francisco,
California, the platform is accessible via website and mobile app. Airbnb does not own
any of the listed properties; instead, it profits by receiving commission from each
booking.

Problem
 In 2009, Airbnb was close to going bust. Like so many startups, they had launched but
barely anyone noticed. The company’s revenue was flatlined at $200 per week. Split
between three young founders living in San Francisco, this meant near indefinite losses
on zero growth. As everyone knows, venture investors look for companies that show
hockey stick graphs, and according to co-founder Joe Gebbia, his company had a
horizontal drumstick graph. The team was forced to max out their credit cards.

Customers can’t clearly see what they are booking in the site or app because
photographs or pictures were not high resolution or quality to attract customers. The
company believes in their own perspective and not risking the possibilities of greater
ideas. They are exactly confined into a box and use scalable solutions to adhere to the
problems. The founders were confined to the things they know that it's working.

Solution

Airbnb used the help of Y combinator to be able to reach their consumers/customers and
to change the things that aren't working and growing. They are able to find new ideas
and become able to think outside the box. Upgraded all the amateur photos to beautiful
images. There wasn’t any data to back this decision originally.

They tend to focus on User Experience

When Airbnb first launched, its website’s appearance wasn’t nearly as sleek as the
current design. In fact, as First Round Review explains, most of the company’s short-
term apartment rental listings looked positively amateurish.

However, when Airbnb’s startup team acted on a hunch and began focusing on the user
experience, the company started to experience a turnaround. As soon as Airbnb
improved its rental listings with professional, attention-grabbing photographs, business
became better. According to Fast Company’s Austin Carr, Airbnb executives now
contract thousands of freelancers to produce the website’s professional photos.
 Only a few years ago, Airbnb’s future didn’t appear to be promising. With a few smart
business decisions and a renewed focus, however, Airbnb completely changed its
direction. Although Airbnb is now a larger company than it was in 2009, the company
has managed to support an intimate corporate environment. As the First Round Review
elaborates, new web designers and user experience employees receive encouragement
to make significant changes from day one on the job.

In addition to incorporating data into major decisions, Airbnb also cultivates a culture of
creativity. The company expects all employees to rethink designs, features, and
execution so that the entire package accurately conveys the brand message.

Results

They were able to climb out of the 'trough of sadness' by allowing themselves to
experiment with non-scalable improvements to the firm.

Gebbia tries to balance this reality with the need to think in new ways by constantly
pushing his team to think bigger. ”Whenever someone comes to me with something, my
first impulse when looking at it is to think bigger," he says. That's the first thing that
comes to mind when I'm asked for advice. Consider the possibilities. Whatever it is,
exaggerate it to the point of absurdity and see where it leads you. Return to me once
you've thought about it 100 times. "Show me a picture of that.''Gebbia clearly says that
he tends to look at the bigger picture and also find new ways not just to help but making
it fund for customers to provide quality products.

It allows Airbnb to move quickly and continually find new opportunities and also, they
consumers or customers can easily find what they are looking for. With this it has grown
tremendously and efficiently not just for the company but for the user itself.
Additional Information about Airbnb

About

Airbnb, is a service that lets property owners rent out their spaces to travelers looking for
a place to stay. Travelers can rent a space for multiple people to share, a shared space
with private rooms, or the entire property for themselves. Airbnb, the world leader in
"sharing economy" accommodations, allows you to book rooms directly from people in
thousands of locations across the world. It enables you to rent flats (or even complete
houses) from people all over the world, in fact, virtually anywhere. The platform has a
significant impact on the hotel industry.

To give you a sense of scale, the corporation is already valued at over $30 billion. Isn't it
the Hilton hotel chain, which has been established for nearly a century? 20 billion
dollars. Airbnb isn't even a real estate company. The main thing to remember is that it's
a major company that you can trust.

Founders

The company was founded in 2008 by Brian Chesky, Nathan Blecharczyk and Joe
Gebbia. Airbnb is a shortened version of its original name, AirBedandBreakfast.com.

The company has been criticized for possibly driving up home rents and creating
nuisances for those living near leased properties. The company is regulated by many
jurisdictions, including the and cities such as San Francisco and It is viewed as a
competitive threat by the hotel industry.

Joe Gebbia co-founded peer-to-peer room and home rental company Airbnb with Brian
Chesky and Nathan Blecharczyk in 2008.Gebbia and Chesky met in college at Rhode
Island School of Design. Before becoming chief product officer of Airbnb, Gebbia initially
wanted to pursue fine art painting and host gallery shows in New York City.

Brian the-airbnb-story Chesky and Joe Gebbia went broke when they were in San
Francisco in 2007 and needed to raise money to pay their rent. Because all the hotels
were full, they decided to rent out air mattresses in their flat to conference attendees.
They called their business "Air Bed and Breakfast," and it would become the hotel
industry disruptor Airbnb in a few years. With third co-founder Nathan Blecharczyk on
board, the privately held company now includes more than three million hotels in roughly
200 countries. It's worth $31 billion, more than Hilton and Wyndham put together, and it's
the largest hotel company in the world.

Ownership

Airbnb does not own any of the listed properties; instead, it profits by receiving
commission from each booking. The company was founded in 2008 by Brian Chesky,
Nathan Blecharczyk and Joe Gebbia.

Airbnb is a community-based web platform that allows people to post and rent local
homes. It links hosts and visitors and streamlines the rental process without owning any
rooms. It also promotes the sharing economy by allowing property owners to rent out
their private apartments.

Others

Recovering from the pandemic, Airbnb listed its shares on the Nasdaq exchange in
December 2020; it had raised $2 billion in debt in April 2020.More than 500 million
people have used Airbnb, which operates in over 100,000 cities in 191 countries.
 Airbnb is the largest lodging sharing website in the world. You arrange lodging for a trip,
whether it's for one night or 12 nights, just like a hotel. Unlike a hotel, however, an
Airbnb is distinct in that you are most likely renting someone's home or an unusual
venue such as a treehouse, tent, or cottage. While Airbnb's main competitors are hotels
and legal bed-and-breakfast establishments, the company manages to set itself apart
with its lively, local appeal. Airbnb housing alternatives, unlike typical accommodations,
infuse their environments with individuality because the offers are owned by individuals
rather than hotel businesses. Customers who are considering utilizing Airbnb become
immersed in a plot in which they might choose to participate by reserving a stay. When
they arrive for their stay, they will be able to see the story through to the end because
they will be living as natives.

CASE STUDY ANALYSIS ON PILLPACK

Overview

A pharmacy designed to provide the best possible experience for customers, PillPack
holds pharmacy licenses in all 50 states. For people who take multiple daily
prescriptions, the company offers pre-sorted dose packaging, home delivery, and a
commitment to customer service. These features help customers take medications as
prescribed, which has been shown to improve health outcomes and lower costs.

PillPack worked to build a prescription home-delivery system that takes the pain out of
the whole process. The venture brought their business to IDEO’s Cambridge office as a
startup-in-residence and worked with designers to fine-tune their offer and showcase it
to the world.

Problems

Help PillPack, an IDEO startup-in-residence, build a venture strategy for its prescription
home-delivery system. PillPack has spent years going through the hard work of getting
licenses to ship to every state except Hawaii and built a system that automatically
manages refills and works with insurers on behalf of customers. It sorts pills and
provides dispensers to make everything as easy as possible for users.
Solutions

Designers worked to refine the company’s brand vision, strategy, and identity across
channels, and used this framework to completely redesign PillPack’s website, as well as
a private dashboard for customers and a suite of physical products.

Results

PillPack now delivers hundreds of thousands of prescriptions every month. The result
was a set of tools that reflected a true understanding of PillPack’s customers, a well-
articulated product and service, and a human-centered approach. PillPack is still the
only independent pharmacy in the U.S. that serves customers nationwide.

Additional Information about PillPack

PillPack, Inc. is an American online pharmacy which is a subsidiary of Amazon.com. It is

based in Manchester, New Hampshire, United States.The company was founded in
2013.

Company founders Elliot Cohen and TJ Parker joined forces with the design team to
redefine how consumers engage with their pharmacy. During the three-month residency,
the teams focused on making sure that every customer interaction with PillPack—from
signing up for the service online to using its product daily—was straightforward and
reassuring.

About

PillPack is a full-service pharmacy that delivers a better, simpler experience through

convenient packaging, modern technology, and personalized service.

Features

PillPack is designed to serve people who manage multiple medications. Each month,
customers receive a personalized roll of pre-sorted medications, along with a convenient
 dispenser and any other medications that cannot be placed into packets, like liquids and
inhalers. Each shipment includes a medication label that has a picture of each pill and
notes on how it should be taken. PillPack uses PharmacyOS, a software platform
created entirely in-house, to help manage each customer’s medications, coordinate
refills and renewals, and make sure each shipment is sent on time, every time.
PharmacyOS also enables real-time notifications and an online dashboard so customers
can control their shipments, refills, and copays. Customers can also email, text, or call
their PillPack pharmacist any time to ask questions or clarify instructions.

Ownership

It was May 2018, and PillPack CEO TJ Parker was in Seattle to meet with a small
contingent from Amazon. It is an independently operated subsidiary of Amazon that was
acquired in the same year. On June 28, Amazon announced that it was buying PillPack
for an undisclosed sum (later revealed as $753 million), snapping up a company that
delivers most of the medications, consumers can get from their local drugstore packaged
in convenient white packets so people will remember to take them, along with automatic
refills and 24/7 customer support.

C. PERSPECTIVES “There’s No More Business As Usual”

The Butterfly effect can be defined as a movement in which small changes in initial
conditions can lead to larger differences and unpredictable variation in a future state. It is
most certain that the way we operate and do businesses today might not be the way we
will do it in the future. The things we do in this present time can go unnoticed in the
future, but it will surely help us identify and predict the future businesses in a general
view. The Butterfly effect can be applied in the movement of businesses today; any
slight difference in one variable could have a profound impact on the outcome of an
entire system.

1. Nokia

Built in 1985, is a Finnish multinational telecommunication, information

technology, and consumer electronics company. Just like how Nokia became
obsolete in the market around 2011, the business failed to make a shift on
 producing or innovating their product phones into a smartphone. The Symbian
operating system of Nokia at that time was no longer competitive in the market
and people were more fascinated with other high-end specifications of
smartphones. Also, the business fell into an incompetent CEO which led to the
faulty organizational structure. They were afraid to try new things, afraid to
compete in the market at that time as they were afraid of how strong their
competitors are like Samsung and Apple. Because of these small mishaps, they
failed to compete in the market and industry ecosystem and ultimately died.

2. Kodak

The Eastman Kodak Company is an American public company that produces

various products related to its historic basis in analogue photography. Kodak
dominated the photography market before the advent of digital cameras. The
company declared bankruptcy in 2012 and sold many of its patents. Though it re-
emerged in 2013, Kodak remains small, with a market capitalization of $399
million. Kodak’s decline resulted from its focus on film, even though it purchased
digital photo company Ofoto. Kodak used the company to promote printing
images at home instead of sharing images online. Industry experts also say that
Kodak missed the transition of photography to smartphones, which allows people
to email images instead of printing them, which gradually destroyed its
dominance.

3. Sbarro

Sbarro is a New York-based pizza that has been selling slices since 1956. It
declared its Chapter 11 bankruptcy in March 2014. It was the franchise's second
bankruptcy filing in less than three years, after it revealed plans to close 192 of
its approximately 800 locations.

Sbarro designed a mall site in Brooklyn's Kings Plaza Shopping Center in 1967,
seven years before the first successful mall food court was created. The concept
was simple: cook fresh Italian food in an open kitchen and serve it swiftly. The
 present Sbarro idea was established as a result of consumer demand. As food
courts grew in the 1980s and 1990s, the brand became a fixture.

Part of the problem was that the brand relied largely on mall sites, and when the
crisis hit in 2008, customer confidence dropped, and once-vibrant malls became
ghost towns. Sbarro failed to keep up with the times because instead of
embracing new pizza trends such as unique sauce bases, ingenious toppings,
gluten-free alternatives, and so on, they firmly chose to remain with their tested
formula. As a result, customers shifted on and left them behind.

4. Forever 21

Forever 21, formerly known as Fashion 21 was established in 1984 by South

Korean immigrants, Jin Sook and Do Won Chang who emigrated to Los Angeles
in 1981. The clothing company made $700,000 in sales in its first year.

However, the owners did not expect the retail downfall which began in 2017 that
continuously threatened the retail industry. Forever 21 was put under too much
pressure by the fast-changing retail sector, and the privately held firm filed for
Chapter 11 bankruptcy in September 2019.

Because of its focus on expansion, Forever 21 was unable to invest in its supply
chain, and as a result, it took longer to bring new kinds of clothing to market at a
time when fast fashion was really heating up and buyers were eager for
innovations. Sales fell as Forever 21 faced increased rivalry from its competitors.

5. Apple

Apple Inc. is an American multinational technology company that specializes in

consumer electronics, computer software, and online services. Apple is the
world's largest technology company by revenue and, since January 2021, the
world's most valuable company. Apple (AAPL) was on the verge of going bust in
1997. At the last minute, arch-rival Microsoft (MSFT) swooped in with a $150
million investment and saved the company. The worldwide success of the Apple
company stems from its core which is innovation. The company is also not afraid
to take ideas and make them better. Apple stays strong to its brand identity that
is why we instantly recognized their products in the market.
Conclusion

We can see from the examples that when business leaders are averse to chaos, it also
creates an overly linear organization structure resulting in disconnections between the
employees. Business strategy and planning should be a tool as an attempt to predict the
future based on the present and the past.

Design thinking is the most powerful driver of innovation. It gives us the opportunity to
look at the problems that arise in the business from a completely different perspective. It
also helps us appreciate and make sense of the complex connections between people,
places, objects, events, and ideas. Design thinking guides a long range of strategic
planning to keep the business processes alive in the next few years and shapes
business decisions that need to be based on future opportunities. Over the course of
time, design thinking also reveals the true value of a business that serves its real
purposes.

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