Strategic Analysis of Airbnb

This article provides a strategic analysis of Airbnb's business model and a PESTEL analysis of the company. It also highlights four important factors for Airbnb's success.

Running head: STRATEGIC ANALYSIS OF AIRBNB
STRATEGIC ANALYSIS OF AIRBNB
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1STRATEGIC ANALYSIS OF AIRBNB
Description of the business model of Airbnb
Airbnb mainly operates in the accommodation based market which an important part
of the huge tourism based industry. The business organizations that operate in this industry
are mainly differentiated by the ways by which the different amenities are provided to the
customers. The business model that is followed by Airbnb is mainly based on the concept of
sharing economy (Airbnb.com, 2018).
Airbnb mainly operates with the help of a technological platform in which the
individuals are supposed to share their capacities in order to offer services to the consumers.
The business model of the company has been implemented in such a manner in which it is
supposed to receive a specific percentage from the amount which the host receives. The
lodging based services that are thereby offered by the company are quite different from the
traditional styles of lodging (Durand, Grant & Madsen, 2017).
PESTEL analysis of Airbnb and stating the opportunities and threats
Political – The unique business based operations of Airbnb have led to many legal
issues which have been faced by the company. The non-compliance with housing laws is able
to act as a threat to the operations. – Threat
Economic – Airbnb has gained a leadership position in the industry with the help of
the concept of sharing economy which is followed by the business operations of the firm. The
operations of the firm have grown in an effective manner with the help of the cheaper options
which it provides to customers (Ethiraj, Gambardella & Helfat, 2017). – Opportunity
Social – The business operations of Airbnb are considered to be social in nature. The
guests have higher levels of interaction with the communities in the areas where they travel. –
Opportunity

2STRATEGIC ANALYSIS OF AIRBNB
Technological – The reliance of technology for the business activities of Airbnb is
high and this is a major factor which is able to affect the revenues. The reviews provided by
the customers are able to play a key part in the effective processes of the organization in the
industry. – Threat
Legal – The terms and the conditions that are developed in the industry need to be
followed effectively by Airbnb. The company has many records of failing to comply with the
regulations in an easy way (Hill, Jones & Schilling, 2014). – Threat
Environmental – The reduced usage of resources is an important factor which has
been able to affect the operations of Airbnb in the industry. This has made the company
environmentally sustainable in nature. – Opportunity
Four factors that are important for Airbnb to be successful
First factor – The availability of effective technologies and internet based services
are important for the long term success of the company.
Second factor – The changes which have been noticed in the preferences and choices
of the consumers need to be analysed in an active way in order to serve them effectively
(Morschett, Schramm-Klein & Zentes, 2015).
Conclusion
The discussion can be settled by stating that Airbnb has been able to develop
sustainable business operations in the industry. However, the company needs to comply with
the regulations and laws effectively in order to maintain its operations.

3STRATEGIC ANALYSIS OF AIRBNB
References
Airbnb.com (2018). Vacation Rentals, Homes, Experiences & Places - Airbnb. [online]
Airbnb. Available at: https://www.airbnb.com/c/olesiab116 [Accessed 23 Sep. 2018].
Durand, R., Grant, R. M., & Madsen, T. L. (2017). The expanding domain of strategic
management research and the quest for integration. Strategic Management
Journal, 38(1), 4-16.
Ethiraj, S. K., Gambardella, A., & Helfat, C. E. (2017). Reviews of strategic management
research. Strategic Management Journal, 38(1), 3-3.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international
management (pp. 978-3658078836). Springer.