Airbnb Strategic Analysis and Management

This assignment delves into the strategic analysis of Airbnb, examining both its internal and external environments. Utilizing relevant frameworks, the analysis aims to identify key strengths, weaknesses, opportunities, and threats. The assignment emphasizes the critical role of management in navigating these challenges effectively to ensure Airbnb's continued success.

STRATEGIC
REPORT
BRIEFING

Table of Contents
INTRODUCTION...........................................................................................................................1
Internal analysis on Airbnb....................................................................................................1
External analysis on Airbnb...................................................................................................2
Strategy analysis of Airbnb-...................................................................................................4
Ethical issues and leadership-.................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
The term strategy is derived as plan of action which is helpful in order to achieve
organizational objectives. This process works as to formulating, implementing and evaluating the
activities of firm in order to have significant growth. The management is the biggest challenge
which is needed to be maintained at the time of running any business. The present report will
focus on the activities of Airbnb. This is an American firm, which works as to provide online
services to its customer in the form of hospitality services to lease or rent building, guest house
for short period of time. The main aim behind this assignment is to process the activities of firm
effectively so that organization can achieve desire success (Sedlacek, 2016). Hence, it can be
said that the strategic report will define the working of enterprise and its action so that activities
of market can able to grow in significant manner.
Internal analysis on Airbnb
This is needed to be done with the analysis of SWOT, so that functioning of firm can be
determined in effective manner. This will help to identify the working and position of entity in
market. This process is defined in following manner as are-
1. Strength
The innovative advertising is one of the key factor for Airbnb, in order to ensure success
in market. Airbnb is taking various initiatives in order to provide good benefits to host as well as
their guest. They are providing facilities in the affordable cost, this is one of the major factor in
order to attract large number of customers (Zervas,Proserpio and Byers, 2017). It is one of the
established brand names among the hospitality industry; it also works as to provide insurance to
its customer as well as ensures safety to guest.
2. Weakness-
The reputations of this firm is almost dependent on its guest, if guest happens to do
anything than it can affect the image of firm as well. Due to expansion in activities of Airbnb, the
violation in relation to law also increased (Farronato and Fradkin, 2016). There are various other
firms, providing same services. This is increasing the competitiveness in market. The services of
Airbnb is only available in bigger areas, the people who want to explore rural area they cannot
get the services of Airbnb, On online platforms, it is not possible for Airbnb to secure services to
its customers.
3. Opportunities-
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The Airbnb is taking various steps in order to offering of new services to its customers so
that they can be satisfied. They are expanding their business activities in global territory as well
rural areas of the countries so that firm is able to earn large amount of revenue. They are
partnering their business activities with the travellers agencies so that firm can expand their
business activities, this will help to earn large amount of profitability as well productivity
(Zervas, Proserpio and Byers, 2015).
4. Threats
This is one of the key factors in relation to cope up with the rivalries in market so that
activities of firm can be expanded. Increment in the cost of service can definitely decrease the
profitability of Airbnb. Due to illegal listing on website, the brand image of firm can be violated
in significant manner.
External analysis on Airbnb
Political factors:
Airbnb is a remarkable business. People offer to rent their homes, apartment suites, or
rooms to untouchables. In any case, the association has continue running into legitimate issues.
A couple of regions available to rent don't take after state lodging laws and controls. In a couple
of communicates, a proprietor ought to in like manner live on the property to legally rent pads
for brief time periods (Gerwe and Froján, 2017). Additionally, these territories are required to
pay motel or vacationer charges while renting their homes in the midst of the events. Airbnb has
faced fines and court methods in Barcelona, New York, and New Orleans. Since they've fail to
take after neighborhood tourism laws. Airbnb needs to ensure they are following each state's
hotel rules. Else, they open themselves up to encourage legalities.
Economic factors: Benefiting hosts and cities
"Shared economy." That is the business Airbnb is a pioneer in. It's a making design
where resources are shared among associations and individuals. Another outline is Uber. Airbnb
has created and is a significant contender to hotels and motels. Airbnb offers more affordable
alternatives for renting (Kock, Zenker and Josiassen, 2017). In addition, it has grown
exponentially in a concise time span. By and by, they serve in excess of 9 million people the
world over.
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Airbnb has offered occupations to people who discontinuously offer their homes to guests. For
urban territories that need hotels or motels, this kind of organization is dear (Kock, Zenker and
Josiassen, 2017). Airbnb has benefitted states by delivering millions in contributing and full-
vitality like occupations. In New York, the budgetary activity gathered to $600+ million and
gave in excess of four thousand vocations.
Social factors: New “experiences”
Airbnb is a social business. Hosts offer their homes to guests as a byproduct of money.
Visitors will record their experience on the web. Web based systems administration empowers
stories to spread. Additionally, Airbnb creates through verbal. Besides, hosts will similarly share
their experience. In spite of the way that reviews are much of the time left by visitors, has in like
manner discuss tenant activity. Reddit has a subreddit where the two hosts and visitors look at
their necessities and experiences straightforwardly (Cusumano, 2015).
The association also has an "Experiences" movement. Customers book three-day experiences
like vaudeville classes. Or then again go to special events. Visitors can in like manner do "social
impact experiences" where non-benefits have and get 100% of the advantages.
Technological factors:
Airbnb depends energetically on development. Visitors will book rooms on the
application or through the site. The site is also where guests will make overviews. A frightful
review infers a host will have a troublesome time with future arrangements. They in like manner
use motorization (Zervas, Proserpio and Byers, 2015). If a host doesn't respond to a guest's
message, Airbnb will normally message the host for them.
Without development, rooms can't be held. Hosts can't be come to. Likewise, Airbnb wouldn't
fill in as adequately as it does today.
Legal factors: A thorough terms and conditions
As communicated above, Airbnb has gone up against real issues for fail to agree to cabin
bearings. On their site, they address the necessity for hosts to take after these principles. Hosts
must agree to terms and conditions, gave through Airbnb, consenting to take after expense
appraisal, hotel, and tourism headings. This is a legitimate record that shields Airbnb from being
subject when issues appear. Airbnb gloats they diminish essentialness usage inside America and
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Europe stood out from motels. This joins cutting down ozone exhausting substances, less water
use, misuse avoidance, and extended common care. It shows up the firm is excited about cutting
down voyaging impact and mixture use also.
Strategy analysis of Airbnb-
The strategic analysis on the basis of competitive strategies as are-
In order to analysis the competitive strategy it is essential to understand the concept of
blue ocean strategy. Airbnb’s blue ocean strategy can be analyzed with the help of using of
ERRC grid in which business model get rid of the trouble of booking hotel rooms, quality of
work, positioning, extra cost, etc. reduced the costs for customers, difficulty in finding the best
suitable place, etc. and this all factors helps in relation to enhance the customer satisfaction
levels, raise profitability. With the help of this model Customers importantly benefit form Airbnb
both in relation to costs and it is also helpful in order to find a place in a most preferred and
suitable location. Airbnb is taking variosu initives in order to find place in any place with
innovative experiences. Airbnb is taking various kind of initiatives in relation to represents the
innovation in the hospitality industry that all works as to attract the family, business and young
travelers.
1. Vision- The main aim of Airbnb is to have internet based accommodation industry.
2. Mission- The main mission is belonged to provide satisfactory services to customers. With the
help of authentic accommodation facilities at the competitive prices, the large number of guest
can be attracted. With the help of providing the best technological services the innovative steps
can be taken. This will help to bring large amount of profitability and productivity.
3. Goals- This term may be defined as one particular objective, which will help to achieve desire
profitability (Zervas, Proserpio and Byers, 2015). It is based on vision, mission, strategic issue,
situational analysis and industry analysis. This all terms are well defined, measurable, planned
and time bound. The main aim behind conducting strategic analysis is to capture 80% market
share from existing market. The following activities are needed to be done as are-
1. Acquisition of 3 hotels, in order to expand in Middle East and Africa while adapting the
differences between cultures.
2. Make partnership agreement with TUi international and FTI tour operators, it will help to
control demand in hotels. These tour operators will help as to arrange transportation, flights and
local tours etc.
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3. There is need to make partnership with the UBER, it will be helpful to arrange internal
transportation and local tours for guest.
Corporate strategy on the basis of situation analysis-
As per the situational analysis and industry analysis the main aim of the Airbnb is to
capture strong position in the market. In this manner there are 5 years of aggressive strategies as
are-
Product development- with the help of partnering with Uber and Tour operator they are able to
earn the large amount of profitability (Oskam and Boswijk, 2016). With the help of this the guest
can choose services as are flights, internal transportation, local tours etc. In this manner the
following programs are need to be developed as are- exchange in culture programs for the young
people. There is need to be environmental awareness programs for environmental friends. Hence
it can be said that this kind of working will be helpful to ensure large amount of profitability in
market.
Related diversification- with the help of diversifying their business activities in new market, and
partnership with traveler’s agencies will be helpful to earn desire amount of profit. This will also
works as to capture the long amount of share in market.
Market penetration- in this it can be true to said that increment in market shares from existing
markets through greater marketing efforts, utilizing all social media engagement tools etc. The
effective strategy is need to be taken with the banner so that activities of firm can be promoted
effectively (Gerwe and Froján, 2017).
Market development- in this it is to be recommended that market penetration, product
development and diversification will be helpful to bring development in the Middle East and
Aftica market. Hence, it can be said that this all are essential in order to earn the large amount of
profitability in the market.
Ethical issues and leadership-
This is needed to be maintaining in order to have long termed sustainability in the market.
The one of the major issue which is facing by Airbnb is to deal with anti discrimination and this
is affecting the functioning of firm in large manner (Zervas,Proserpio and Byers, 2017). In this
regard it can be said that the main ethical argument in relation to Airbnb is to have impact on
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local communities and housing markets. In this following things are need to be considered as
are-
1. Security and safety- The upgraded security and safety system is need to be provided to
the both host and guest in order to prevent crimes. This will be helpful to ensure success
in market.
2. Regulatory risk- The Airbnb is global company and this country is having several of rules
and regulations, in which all functions are need to be operated effectively. The internet
based activities are needed to be done in order to capture long term share in market.
3. Cultural adaptations- in order to bring development in the market, there is need to have
continuously development in the products so that it can be match with cultures (Farronato
and Fradkin, 2016).
In order to make this approach effective the Airbnb is need to be taken various initiatives as are-
1. Timely regulation to protect communities in over tourist areas.
2. The company should have better information from destination in order to minimising the
impact.
3. In this customer demand for transparency and accountability from airbnb
(Zervas,Proserpio and Byers, 2017).
4. The innovation feature is need to be invented in order to get back the customer.
CONCLUSION
Based on above report it can be concluded that strategy is derived as plan of action which is
helpful in order to achieve organizational objectives. This process works as to formulating,
implementing and evaluating the activities of firm in order to have significant growth. This
report will be included oft functions as are internal and external analysis of Airbnb and its
strategic analysis in order to conduct the activities of the firm in the effective manner. The main
aim behind this assignment is to process the activities of firm effectively so that organization can
achieve desire success. The management is the biggest challenge which is needed to be
maintained at the time of running any business.
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REFERENCES
Book & Journal
Sedlacek, N., 2016. The Sharing Economy: Does Airbnb Pose a Threat to Hotels and Guest
Houses in the Czech Republic? Analysis (Doctoral dissertation, Empire State College).
Zervas, G., Proserpio, D. and Byers, J.W., 2017. The rise of the sharing economy: Estimating the
impact of Airbnb on the hotel industry. Journal of Marketing Research. 54(5). pp.687-705.
Farronato, C. and Fradkin, A., 2016, July. Market structure with the entry of peer-to-peer
platforms: The case of hotels and Airbnb. In Unpublished. Geraadpleegd via
https://editorialexpress. com/cgibin/conference/download. cgi.
Zervas, G., Proserpio, D. and Byers, J.W., 2015, June. The impact of the sharing economy on the
hotel industry: Evidence from airbnb's entry into the texas market. In Proceedings of the
Sixteenth ACM Conference on Economics and Computation. ACM.
Aznar, J.P and et.al., 2018. Airbnb landlords and price strategy: Have they learnt price
discrimination from the hotel industry? Evidence from Barcelona. International Journal of
Tourism Sciences. 18(1). pp.16-28.
Gerwe, O. and Froján, R.S., 2017, January. Airbnb: A Foe or a Friend? Effect of Entry of a Peer-
to-Peer Platform on Incumbents’ Performance. In Academy of Management Proceedings.
Academy of Management Briarcliff Manor, NY 10510.
Vakhariya, S., 2017. Airbnb: The emerging player of Sharing Economy in UAE. Case Studies in
Business and Management. 4(2). p.144.
Oskam, J. and Boswijk, A., 2016. Airbnb: the future of networked hospitality
businesses. Journal of Tourism Futures. 2(1). pp.22-42.
Kock, F., Zenker, S. and Josiassen, A., 2017. The dilemma of authentic tourist experiences and
residential life in urban areas. In 13th International Conference on Responsible Tourism in
Destinations.
Cusumano, M.A., 2015. How traditional firms must compete in the sharing
economy. Communications of the ACM. 58(1). pp.32-34.
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