Entrepreneurship and Sustainability of Airbnb: Insights and Recommendations
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This report discusses the entrepreneurship and sustainability of Airbnb, including the characteristics of its founders, the pre-startup stage, and its unique selling points. It also provides recommendations for ensuring the sustainability of the organization and improving its entrepreneurial culture.
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Table of Contents INTRODUCTION...........................................................................................................................3 Account and Findings......................................................................................................................3 Description of the entrepreneurs and reflection onentrepreneur/s current motivation and behavioural characteristics...........................................................................................................3 Discussion on how the entrepreneurs identified the original idea of the startup and pre-startup stage.............................................................................................................................................4 Discussion on the entrepreneurs of the startup business sees unique about business in order to stay sustainable in the marketplace..............................................................................................6 Conclusion and recommendations...................................................................................................7 Based on the theory, insights and observationsderived from thismodule, bestow 2-3 recommendations to ensure the sustainability of the organisation..............................................7 Basedonthetheoreticalinsightsandobservationsderivedfromthismodule,bestow recommendations of what the entrepreneur/s could do to ensure that the organisation develops or improves entrepreneurial culture.............................................................................................8 Conclusion.................................................................................................................................11 REFERENCES..............................................................................................................................12
INTRODUCTION With increasing globalization, new start-up businesses are growing in a large number. Globalization also delivers several opportunities to these businesses helping them to grow and sustain themselves in the marketplace. With the increasing globalization, competition is also increasing at a fast pace wherein businesses want to compete with each other in terms of products and services by offering differentiated market offerings to establish strong customer perceptions and competitive advantage. To support the report, with relevant information and examples, Airbnb is the chosen business startup. This business delivers accommodation services allowing people(Host) or customers to temporary rent rooms or properties to other people (guests). This report delivers entrepreneurs behaviours and characteristics, business model, USP and sustainability and certain recommendations to improve current business functioning for greater profitability and enhance business services (Alvarez and Barney, 2020). Account and Findings Descriptionoftheentrepreneursandreflectiononentrepreneur/scurrentmotivationand behavioural characteristics Airbnb was foundedby Brian Chesky, Joe Gebbia and Nathan Blecharczyk in the year 2008. The organisation is headquartered in San Francisco, USA. This small business came up with the idea for earning profit by delivering accommodation services in San Francisco as in early 2009, accommodation services were expensive. The business gradually grew its market share by usingan effective business model and innovative approaches, today Airbnb offers more than 7 billion places and operates in more than 190 countries. In the year 2018, the business turnover was recorded more than 3 billion in the market valuation which is more than any other big global business such as Marriot or Hilton. In the context of Airbnb. An entrepreneurs thinking abilities and creative minds play an important role to deliver and address innovation and creativity for establishing a new business venture. Looking at Airbnb’s case, the entrepreneurs of the business were highly ambitious and creative. (Berglund, Bousfiha and Mansoori, 2020). They were opportunisticas they started the idea of a new business venture with the help of networking by taking calculated risks and accepting the business losses. Initially, when they started the new business venture in the year 2008, they faced failures and hesitation
for business stability and financial capability in the marketplace. They were committed to their work wherein the main focus was to maintain consistency and hard work by taking small steps and adding great value to the business. Slowly and steadily the business startup started making a profit and by the year 2020 the business became a public limited company through IPO, it reflects the willingness and determination of the entrepreneurs of the association by inventing new ideas and using the effective business model in order to make the startup business success. It reflects also the self-efficacy and self-motivated characteristic, team working qualities and collaborative behaviour that helps them to set a clear vision to accomplish organizational objectives. (Blundel, Lockett and Wang, 2017). By looking at the success of the start a business of Airbnb it confirms all the qualities, behaviour andcharacteristicsanentrepreneurshouldascertaintoaccomplishbusinesssuccessand goals.The lemonade principles to the entrepreneurial concept say an entrepreneur identify new ways and approaches for converting the challenges into opportunities. Adding thelemonade principleto the Airbnb case, instead of accepting the business failure for the fifth time they didn’t give up instead they sold cereal boxes for acquiring financial stability, which did not demotivate them rather it stimulated them to continue business by adding innovations to the business and turning the challenges to the business opportunity. It took 12 years to build the start-up business a success which reflects entrepreneur's consistency, determination, positive entrepreneurial qualities and characteristics which helped them to accomplish business growth and sustainability in the market place (Bylund and McCaffrey, 2017). Discussion on how the entrepreneurs identified the original idea of the startup and pre-startup stage The entrepreneurs and the partners of Airbnb established a business model in order to address innovative thinking and creativity to deliver value to the customers. The main motive of the business was not to compete with the existing industries but by improving own services to create demand in the marketplace. Airbnb used the model of B & B which says bread and breakfast. They added innovations to the business model in order to accomplish the sustainability of the business. Hotel businesses in the year 2009 used simple alternatives but missed to use cost-effective and customer-centric alternatives to serve the customers. The association came up with market offerings delivering value at lower prices. The main motive of the business was to
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enter into the market focusing on the consumer to consumer market strategies wherein the association focused on meeting the needs and expectations of the customers by delivering them quality services and targeting a more diverse consumer group. Airbnb adopted the innovative infrastructure to establish the right corporate culture at the workplace. This corporate culture helpedtheassociationtocreateteamworkandgroupdiscussionandestablishcorporate networks. The employee contribution helped to analyze the market pattern, the interaction of the customers supported to resolve different challenges and problems about the business and so on. The association adopted a working culture that promotes entrepreneurship by celebrating both new ideas and bad decisions to learn and grow through mistakes and foster entrepreneurship in the organisation (Chakraborty, Thompson and Yehoue, 2016). Airbnbadoptedcustomer-centricbylisteningandcommunicatingtothecustomersand collecting feedback from the targeted customers in order to improve the current business model. In the year 2009, the business didn’t have a stable financial position to serve its project and businessventures,thus,thefounderssoldcerealboxesinordertomeetthefinancial requirements of the business. The business founders also took training classes for gaining knowledge about innovation and human relationships in innovation. In order to address real issues and challenges faced by the business in the year 2009, The founders communicated with the host and the customers who visited the company’s website, gathering information about the targeted consumers from the feedbacks in the comments posted on the website to create something better that meets the expectations of the targeted customers (Frederick, O'Connor and Kuratko, 2018). The entrepreneurs of the association travelled around and identified customer behaviour in order torightlyaddressissuesandchallengesandaccomplishingfullknowledgeofcustomer behaviour and preferences. They also adopted the approach of experience mapping which says to draw out requirements for meeting the customer expectations and building a strong business model by design thinking. The help of design thinking, which helped the association to combine innovative ideas and approaches to resolve identified problems. There were two innovations that Airbnb addressed including promised security and ease of use to the customers using digital platforms for booking the services on the company’s website. The two innovative approaches focused on promising security to both the host and the customers. The association has also
adopted approaches by recruiting the most skilled and experienced talent such as digital marketing directors in order to design the digital platforms of the association convenient and friendly to use to both guest and host (Henry and Dana, 2019). Discussion on the entrepreneurs of the startup business sees unique about business in order to stay sustainable in the marketplace The Unique Selling Point of Airbnb is“a marketplace for real people to rent out their own homes which talks about the property in which they live or while they are away or rooms in their home while they are present”. Airbnb delivers services with hotels by establishing effective prices and delivering access to people so that they can book the accommodation services irrespective of the location via virtual platforms.TheAssociationfocusesonmaintainingbrandpositioningandaccomplish competitive advantage by offering services at a cheaper price and delivering value to the customers. Airbnb applied the model ofTidd and Bessant 4 P’s Modelin order to deliver differentiated services and accomplish business sustainability in the marketplace. The model defines four P’s position, process, product and paradigm, these are discussed below in brief: Position:The entrepreneurs of Airbnb founded new ways and approaches in order to enter into a new marketplace. These entry approaches answered different questions such as where to go, what to do, how to get their strategies. The transportation Service strategies adopted by the business Included collaboration and partnership with trains and airlines.The founders of the association also recruited Fred Reild as the head of transportation globally. (Kuratko and Morris, 2018). Product/ Service:Airbnb is focused on delivering quality customer services. The association segregated the services offered to high-quality accommodations by introducing Airbnb plus in order to satisfy customers with well-equipped and furnished accommodation for the guest and the travellers. The association also focused on improving the process of the business functions by rightly analyzing the customer preferences and demand and adding new ways innovative ways for delivering services to the customers. The business established theAirbnb communityin order to maintain a strong connection and details about the host who is involved in delivering the
services to the guest and the travellers. Airbnb community was established to evaluate collect details about the host by encouraging frequent discussions and meetings (Lyons and Zhang, 2018). Process and Paradigm:Airbnb ad process and paradigm at the workplace by sharing their own stories, failures, processes, thoughts so that the association do not make the same mistakes and adopts approaches to learn from the past experiences. The association also interacts with the customers using digital platforms to reach out to every customer irrespective of the location through social media platforms such as Facebook, Instagram or Twitter in order to maintain a good customer relationship. Conclusion and recommendations Basedonthetheory,insightsandobservationsderivedfromthismodule,bestow2-3 recommendations to ensure the sustainability of the organisation. Sustainability of the organisation The business model used by the association is strong and effective to influence the target customers and the market environment but the business can add certain suggestions through organic development and strategic alliance. The creators of the association should travel as guests or hosts for taking accommodation services (Maritz and Donovan, 2015). The creators of the business should interact with the people for collecting information and know that how far people are aware of the sustainability business model of the association, the interaction with people and related stakeholders would also help to determine the needs and preferences, their expectations from the business and also suggestions to improve the existing business model. The association should also need to focus on building creative teams and strong workforce capital so that the business can sustain itself in the marketplace for the long run. Deploying creative teams would help to add innovative content and ideas to the business model. The creators of the association should travel to different places where the association is operating in order to gather and retrieve relevant data about the customer’s opinions, preferences, the grey areas of the business, the cultural preferences, the needs and so on about the business. It will help the business in order to improve the business model and avoid the situation of strategic drift in
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the market in place of Airbnb due to increasing competition in the global platform (Mayer, Siegel and Wright, 2018). Airbnb can add certain pointers to its business model based on accommodation rental for individuals to offices or even restaurants so that the business can target another market. The business must diversify its business model in order to maintain sustainability in the global market place. Airbnb should grow into a new market by an existing focus on delivering customer value, improving customer experience. The Association should expand its business model in a global platform wherein the association must be careful about operating its activities to different countries as the culture and the customer preferences vary to different locations. Airbnb must use different pricing for purchases and rentals in different geographical locations. Other suggestions that can be adopted by the business are as: Prices should be changed with demand The Business environment is dynamic, which means that the demand of the market trends keeps on fluctuating. The host should set the prices as per the demand about a particular period, comparing the prices with the competitors, and evaluating the performance of the business in a particular period. Setting the price as per the market demand will help the business to see sustainability in the marketplace as the price is the huge factor that influences the decision making of the customers(Morris, 2015). Capture great photos Capture and uploading great pictures of the accommodation services play an important role, the host should capture great pictures with bright lights which looks attractive to the customers and upload them on the company’s website. Basedonthetheoreticalinsightsandobservationsderivedfromthismodule,bestow recommendations of what the entrepreneur/s could do to ensure that the organisation develops or improves entrepreneurial culture Staying entrepreneurial The recommendation in order to foster an entrepreneurial culture in the workplace: Keeping track of everything
The creators should keep a track of everything right from offering training to the employees to practicing effective leadership in the workplace enough to retain consistency (Ashraf and et.al., 2019). Set up a system of growth Airbnb must remove rigid hierarchy structures rather allow all the employees to think for themselves and encouraging them to deliver ideas and decisions at work. Keep experimenting Keep experimenting with new ideas is important in order to address new and innovative changes in the business model. Airbnb should keep on experimenting with the business model by analyzing the market trends based on customer preferences, the prices, the host and guest responses and others (Olanrewaju and et.al., 2020). Push team to decide next step The team and employees at different levels must be delivered independence and the liberty for making their own decisions in order to keep up with the entrepreneurial culture at work and making them responsible and accountable for any problems and challenges faced by the association. It would help employees to become more responsible and careful towards their work by addressing desired solutions and opinions for identified problems. Measure marketing It is always recommended to track the business’s marketing activities. For example, how people find or reach out to the company’s website, is it through advertisement or the blog post of any other site. The association should use different analytical tools in order to track the website in the traffic and analyze how good marketing activities on the social media content is influencing the targeted customers (Omorede, Thorgren and Wincent, 2015). Boost online presence The Association should enhance the online presence such as by responding to customer concerns or interacting with them in prospects calls or emails, search engine optimization and is also an
effective approach in order to influence customer decisions and deliver effective advertising and marketing objectives to the final prospects. Motivate employees While talking about adding improvements to the business functioning, it is always important to start by analyzing own strength and weakness that is how the business is performing internally. Employers of the association should motivate the employees in order to derive smart and productive work. Employers should focus on making social relationships with employees at work so that they feel more fun and comfortable, an employer must always recognize good work and ideas, employers should have delivered employees flexible working hours so that employees can work to the best time when they are the most productive, most importantly employees must focus on professional development by offering them effective training and in-person seminars to enhance their technical and soft skills (Shepherd and Patzelt, 2017). Invest in customer relationship Improving customer relationships is one of the greatest assets to any business. The association should maintain a connection with the host by collecting clear details of what quality of service they provide about the facilities, the infrastructure such as water, electricity, the area equipped, furnishing and the prices offered in specific different geographical locations. Apart from that, the Association should also interact with the customers by collecting customer grievances and points of the customer experiences. Responding to every customer is also recommended so that customers feel engaged and take repeated services. Share Vision with the employees It is always recommended to share the vision with employees and encourage them to take for adding their own decisions. Employers of the association must share the targets and vision clearly with the employees so that they can rightly address what is to be accomplished by the end of the day. Delivering vision and targets to the employees not only welcome improvement but alsoencouragesemployeeengagementtowardstheorganizationalobjectives(Welterand Gartner eds., 2016). Seek specialized experts
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The association should engage with attorneys, accountants and other professionals. It helps the business to get quality of working with the help of experienced professionals. Before starting with each new venture or making important decisions it is advisable to get expert solutions and workings so that the business workings and decisions are free of blunders. Moreover, getting experiencedprofessionalshelpwouldimpactthebusinesspositivelybeitenhancesthe profitability, sales margin or any other business opportunities. Conclusion The above report talks about how entrepreneurship helps to add creativity innovation and supports for starting a new business venture. In the context of Airbnb, this report delivered a reflection on the entrepreneurial characteristics and behaviours that helped the association to make the startup business successful. The creators of the association formulated different innovativetacticsand placedUSPof thebusinesstodeliverdifferentiatedservicesand accomplish sustainability in the marketplace. The entrepreneurs adopted a customer-centric business model in order to accomplish competitive advantage and market positioning. Apart from all the entrepreneurial approaches used by the association, it should also focus on adding improvementsanddevelopmentstothebusinessmodelasperthechangingbusiness environment by addressing the changing consumer perception and the market trends in order to accomplish sustainability in the global marketplace.
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