Application of Diffusion of Innovation Theory in Airbnb

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author note

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Table of Contents
1. Introduction..................................................................................................................................2
2. Theory..........................................................................................................................................2
3. Application of the theory.............................................................................................................7
3.1 Background of the company..................................................................................................7
3.2 Past and present stature of the company by the application of the theory.............................7
3.3 Possible future stature of the company considering the diffusion theory..............................9
4. Conclusion.................................................................................................................................11
Reference.......................................................................................................................................13

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1. Introduction
In the modern world, every organisation needs to be innovative so that it can continue to
develop its potential in the business. As stated by Berry and Berry (2018) innovation is important
so that every organisation can adapt with the changing needs of the customer as well as the
changes brought into market. The theory in focus is on the diffusion of innovation theory and its
applicaton in Airbnb.
The principle of the theory focuses on the five adopters that help organisations to gain a
competitive advantage in the business.
The process is based on the application of the adopters and analysing the manner in
which innovation can be influenced.
Jensen et al. (2016) pointed out that the advantage of the innovation provides to
organisations ranges from being competitive to gaining the trust of the customers along with its
loyalty.
The disadvantage of the theory is that the theory was developed to explicitly apply so that
new behaviours can be adopted. Along with this, the theory takes into consideration the
advantages that the business may have but fails to recognise the financial resources required for
innovation.
Canvas model helps in identifying the capabilities and the resources that an organisation
possesses. The analysis of the canvas model of Airbnb is provided.

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2. Theory
Definition
The diffusion of innovation theory is one of the oldest innovative theories that highlight
the journey of a product or service undertake in its life cycle. As stated by Christensen et al.
(2015) the theory can be linked with the product life cycle taking into account the different
stages that exist in the development and decline of a product. According to Biemans (2018),
adoption is the process that defines the choice of a person in terms of the different prospects and
application. The main concept of diffusion theory is to ensure that changes are made in a timely
and structured manner by taking into consideration the categories that affect the changes.
Principle and process
Innovators: According to Kogan et al. (2017), innovators are the people that want to be
the first to try out new products and services. Airbnb can put their hands in adopting innovative
tactics. The characteristics of the innovators are that these people are venturesome and are
interested in new ideas. As stated by DiMasi, Grabowski and Hansen (2016) the risks taken by
these people often accounts for the initial development of new ideas and its application in the
business world. The initial stage of the theory provides an understanding of the changes that
exists among the population and the manner in which Airbnb can embrace the changes.
Early adopters: At this stage the opinion of the leaders are respected and it is necessary
that the innovation takes in the form of enjoying leadership roles which can help in the
development of the innovative tactics and embrace the changes that may take place in an
organisation. As stated by Bain and Kleinknecht (2016) the changes made pertain to the ideas
that are developed and the manner in which it can be applied. However, one of the characteristic