Innovation Theory and its Application to Airbnb

Innovation Theory 1
Innovation Theory

Innovation Theory 2
Contents
Introduction......................................................................................................................................3
Part 1 Innovation theory..................................................................................................................3
Part 2 Application to Airbnb............................................................................................................6
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Innovation Theory 3
Introduction
The purpose of his assignment is to highlight the factors that contribute in innovation. To define
the process of innovation, it is necessary for the company to go through the needs of the
customer. Innovation is the process that depicts the development of customer value by taking
consideration of solutions that meet unarticulated needs in different manner. An innovative
employee has potential to increase productivity by developing and initiating new processes
which in turn can amplify competitive benefits and give meaningful differentiation (Shao-dong,
2009). Diffusion of innovation theory is developed by Rogers in 1962. It developed in statement
to define how, over time, an idea get momentum and diffuses by precise population. Airbnb Inc.
is a secretly held global company in San Francisco that handles an online hospitality services and
marketplace which is available via its mobile application and websites.
The following report will analyse the innovation theories by taking consideration of Airbnb Inc.
along with application to Airbnb regarding innovation will be elaborated in the assignment. The
discussion will be made related to historical innovation and future innovation pathways. This
paper will highlight the business model of the company. At last, the conclusion will made to
emphasis what has been done in the assignment for the company of Airbnb regarding innovation.
Part 1 Innovation theory
Diffusion of Innovation (DOI) Theory is the model that depicts how an innovation can expand
idea in a large manner and communicate over time, an idea to gain diffuses and momentum
through population and social system. The end result of this theory is that the people focus on
new idea or product. The term of adoption depicts that a person does something in a different

Innovation Theory 4
manner than what they had done previously (Kuili and Shuhua, 2010). According to this theory,
it is necessary for the company to keep focus on such factors that the individual must perceive
the idea and behaviour as new or innovative. Adoption of a new idea in the context of innovation
does not occur similar time in a social system; somewhat it is a procedure whereby some people
are more suitable to accept the innovation in comparison of others (YUAN and LI, 2009). It has
been found through research that people who assume an innovation early have various features in
comparison who adopt an innovation later. This model is helpful in endorsing an innovation to a
targeted people and it is necessary to comprehend the features of the target population that would
facilitate to hamper adoption of the innovation (Noel, Sovacool, Kester and de Rubens, 2018).
To promote an innovation, there are various strategies developed to appeal to the various adopter
categories.
Innovators: These are people who has desire to be the first to endeavour the innovation. They
are having great interest in new ideas. These people are eager to take risks in order to innovate
new things for the company.
Early Adopters: These are people who portray opinion leaders. They know the value of the
change within the business and adopt the leadership opportunities. Engagement needs little
influence as they are accessible to amendment.
Early Majority: these are the person who adopts latest idea before the average person. These
kinds of people has tendency to focus on evidence before starting on work.
Late Majority: These cover those people who are doubtful of amendment, and will only focus
on modernism after it has been endeavoured by the majority (Lovejoy, Demireva, Grayson and