Technology and Innovation

Module Management
TIMA01-7
NQF LEVEL 7

FORMATIVE ASSESSMENT – ASSIGNMENT B

Assignment B (TIMA01-7/DLO5 10/2022)

Exam Date 24 October 2022

Marks 20

© Milpark Education Tech & Innovation Management TIMA01-7 Assignment B October 2022
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 Assignment B (TIMA01-7/DLO5 10/2022)

Total: 20 marks

Note
Preparation

In preparation for your assignment, it is imperative that you read the marking
rubrics provided in the assessment, as they give you an indication of all the
important aspects to consider. Also, make sure that you study the assignment
instructions, which can be downloaded from the TIMA01-7 myCourses page.

Format and required length

The assignment must be typed in Arial 12 font with 1.5 line spacing. The text
must be justified.

Referencing

You will be penalised for copying theory without explanation/application to the

scenario provided. You should use the theory in support of your own answer.
Non-application will result in a zero (0) mark being awarded.

The theory section of this assignment needs to be correctly referenced (with in-
text referencing and a reference list). Please refer to Milpark’s Reference Guide.
Any theory presented without in-text references will NOT be marked.

Question 1 (20 marks)

Read the case study below and answer the question that follows:

Netflix Business Strategy

Netflix was founded in 1998 to give consumers a mail-order alternative to

“schlepping” to video rental stores to get their video cassettes and, thereafter,
their DVDs. The growing popularity of DVD rentals in the early 2000s introduced
more competition into the market, making them more affordable for more
consumers.

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That, in turn, increased demand for more DVD titles to satisfy the consumer’s
desire for watching video programming at home. At their peak in 2005, DVDs
were a $16.3 billion business, representing 64% of the home video
entertainment market.

In 2007, Netflix introduced streaming services to further fulfil that consumer

need. As more people had fast broadband connections at home, the popularity
of this new “video on demand” service increased. Apps on mobile phones and
tablets with 4G connections introduced even more flexibility to consumers to
watch movies and other video content anywhere they wanted.

Between 2008 and 2019, the DVD rentals market decreased significantly. In
2010, Blockbuster declared bankruptcy, a decade after famously telling Netflix,
which then had $5 million in annual sales, to get lost when they suggested that
Blockbuster buy them.

In 2017, Netflix was reported to have had as many US subscribers as cable

television, covering 73% of the country’s households.

In 2020, movie studios, motivated by the pandemic’s hit to movie theatre

attendance and the hockey-stick growth of streaming subscribers, reversed a
decades-old rule that now only gives movie theatres 17 days, or three weekends,
of first-run movie exclusivity, down from what was once a three-month head
start.

Since January of this year, Netflix has added roughly 26 million new subscribers
to its platform globally, and 10.1 million in the April to June timeframe alone.
Netflix is the story of the classic – but the always so-much-harder-than-it looks
– ignition strategy, laid out over more than two decades.

A combination of forces – Netflix’s own content and technology innovations and

advances in hardware and software – helped them consistently attract more
eyeballs. And those eyeballs helped Netflix buy more content — and more
content helped get even more eyeballs. Cheaper and higher-quality HD flat-
screen TVs, the near-ubiquity of fast broadband at home, and powerful tablets
all turbo-charged consumer adoption and usage over time.

A lot has happened over the last 20 years to give consumers more ways to watch
movies in the comfort of their own homes, while giving content producers more
incentives to offer consumers more choices about what to watch.

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Today, consumers can pop open the Netflix app on one of the many connected
devices that are now in the hands and the living rooms of almost every person
and household in the US – and a growing audience in every other part of the
world – and binge-watch whatever they want.

The Netflix platform became the catalyst for a powerful yet subtle shift in how
people could consume video content. They turned something that consumers
didn’t really want to do (go to the DVD rental store) into something they no
longer had to do, while still getting the desired (or even better) outcome.
Source: Webster, K. 2020. PYMNTS. [Online] Available from: https://What Innovators Can Learn From
Netflix | PYMNTS.com/ [Accessed: 05/05/2022]

Required:

Determine the key factors from theory that relate to the case study and which
should be considered when dealing with appropriability for Netflix. Practically
indicate how Netflix protected their business. (10)

Note: make use of the rubric that follows to see how marks will be allocated.

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 MARKING RUBRIC: Question 1

Netflix Business Model Assessment criteria

Index (BMI) (10)
Appropriability (10) 0-2 marks 3-5 marks 6-8 marks 9-10 marks
Relevant factors listed, Relevant factors Most factors are fairly well Most/all (12–14) factors are
but no explanation listed, but poorly explained. clearly identified and well
provided. explained. Some explained in an organisational
Mark: /10 factors are well context.
explained, while
several others are
omitted.

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Question 2 (10 marks)

Read the case study below and answer the question that follows:

Managing the type of innovation

Digital disruption is coming for SMEs

According to new research by Ricoh South Africa, small and medium-sized

businesses (SMEs) are in danger of failing if they don’t adapt to digital disruption,
regulatory requirements and the economic shifts that are fundamentally
changing their markets. At least 34% of the 3 300 SME leaders surveyed from
across 23 countries, including South Africa, say they will go out of business by
2020 if they aren’t able to innovate in response to these changes. With 56%
trying to increase profits and 54% working to grow their operations, SMEs must
be ready to challenge traditional assumptions about growth.

How a business embraces the current digital disruption has become a crucial
differentiator. However, given the uncertain economic climate, SMEs are under
pressure to drive digital transformation while still managing operations.

The research uncovers three key areas where SMEs should be applying
technology to help focus their attention:

 SMEs must build closer customer relationships by using technology to

facilitate and inform product and service development: 54% recognise
that they need to develop ongoing relationships with their customers.
 SMEs must use smarter workplace technology to reshape processes,
improve agility and make efficiencies: 74% of leaders say technology
increases their ability to innovate.
 SMEs must foster the full potential of talented individuals by using
technology to empower employees and develop creative thinking: 42%
want to encourage safe spaces for experimentation to see whether ideas
are successful.

An opportunity in the challenge

Even though financial services organisations, IT firms and telecommunications

operators have led the charge towards a digital-first market, the more agile SME
companies currently enjoy an opportunity to leapfrog the more established
players in their sector.

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Unlike their larger counterparts still reliant on legacy systems, SMEs can
circumvent the need to upgrade outdated hardware and software. Instead, they
can focus on harnessing the innovative elements of the digital space that best
suit their strategic directives. For example, software as a service is driving
innovation in the provision of a host of business services, including point-of-sale,
payment processing, automated marketing, supply chain management and
accounting.

The original disruptors

Think about the impact that the likes of Uber, AirBnB, Amazon and Netflix have
had on taxi services, the hospitality industry, book stores and DVD rental shops
respectively. And thanks to how user-friendly, pervasive and accessible
technology has become, there is nothing limiting the savvy entrepreneur or small
business owner in terms of upsetting the proverbial applecart in this regard.

While it is natural for some SMEs to be hesitant to make the shift towards digital,
the reality is that they no longer have a choice. If they don’t start taking steps
to create a digital strategy, the danger is that they will lose progressively more
of their customers to competitors who had the foresight to develop a digital
strategy and are now reaping the associated 50% improvement in performance.

Source: Adapted from Laithwaite, K. 2019. Digital disruption is coming for SMEs. [Online] Available from:
https://www.iol.co.za/business-report/opinion/digital-disruption-is-coming-for-smes-23696194
[Accessed: 05/05/2022]

Required:

You have been appointed as an advisor to help increase performance and

promote innovation within your team at work.

Answer the questions that follow by preparing a report (maximum two (2)
pages). Your report should include the name of your organisation, as well as your
name and position. Exercise good report writing.

2.1 As part of your report, briefly assist your organisation in understanding

any two (2) different types of innovation from theory by applying them
to the case study. (2)

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2.2 Discuss how your organisation can use the two types of innovation you
mentioned in Question 2.1 to gain the lead in their respective markets.
(4)

2.3 Refer to the case study to suggest at least four (4) benefits of adopting
innovation in your organisation. (4)

Note: make use of the rubric that follows to see how marks will be allocated.

TOTAL MARKS: 20

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 MARKING RUBRIC: Question 2

Types of innovation (10) Assessment criteria

0-1 marks 2-4 marks 5-7 marks 8-10 marks
The plan lacks The plan portrays a Fairly well structured A comprehensive and well-
Two types of innovation structure or theoretically sound plan. Two methods used structured plan, using at least two

report scientific/theoretical scheme but with weak with a fairly good methods. Excellent application and
basis. Poor application. Only one or application and clear justification for choice of
application and no two innovation benefits justification, and three method. More than four innovation
Mark: /10
innovation benefits mentioned from the case innovation benefits benefits mentioned from the case
mentioned from the study. mentioned from the case study.
case study. study.

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