Airbnb's Innovation and Management: A Comprehensive Report

This report provides a detailed analysis of Airbnb's innovative strategies, competitive advantages, and innovation management techniques. It begins with a strategic overview of Airbnb, including its product, target market, value proposition, and competitive environment. The report then delves into what makes Airbnb innovative in the marketplace, highlighting how its approach forms the basis of its competitive advantage. The document also explores the types of innovation dominant within Airbnb, discussing service innovation, open innovation, and user innovation. The report further examines the organization and management of innovation within Airbnb, including the strengths and weaknesses of its platform, challenges in participation and engagement, and the company's responses to address these challenges. The analysis incorporates insights from various academic sources to support its arguments, and concludes with a summary of the company's innovative journey.

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Innovation and business development

Contents
Innovation brought by Airbnb: Innovation management techniques of Airbnb........................3
Introduction................................................................................................................................3
Innovation brought by AirBnB..................................................................................................4
What makes this organization innovative in the marketplace? How does this form the basis of
its competitive advantage?.........................................................................................................5
Innovation management done by Airbnb...................................................................................6
Strength and weaknesses of the platform, challenges in participation and engagement...........7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

Innovation brought by Airbnb: Innovation management techniques of Airbnb
Introduction
Airbnb has started its operation in the year 2008 in San Farnchiso with Brian Chesky, Joe
Gebbia as well as Nathan Biecharczyk. It has started the online services for the travelling
industry. At the same time, it has also created the online space for the masses to book as well
as uncover the one-off accommodation situation across the globe (Camilleri & Neuhofer,
2017). It is one of the most pocket friendly travelling accommodations available on demand
instantly. The major purpose or goal is to provide a beautiful living space for every traveller
so that they can feel like home. The main objective behind this is to ensure the transparent
connect between the different users (Seidel and Langner, 2015).

It targets different type of customers through its different business model. The first target
market includes hosts. They are the people who tend to purchase the property and want to
make proper money by providing them rental space (Ji-hai & Qin, 2016). They have the
ability to reject as well as accept the booking after getting the reviews of the travelling
through the social profile. The second target market is traveller. These people tends to book
the available spaces from the local hosts. They also have the option to check the rent, location
and amenities of the property and then book the flat. In addition to this, Airbnb has wide
network of the freelancer photographers in different cities of the world. In this way, Airbnb
allows it to give emphasis on more than one target audience.
AirBnB is able to effectively achieve profit on the collaborative and sharing consumption
mechanism (Volgger, Pforr, Stawinoga, Taplin and Matthews, 2018). Therefore, online
platform is taken into two forms named website and mobile application. Due to this, it also
has the capability to capture the broader market. due to its innovative services, it is also able
to exceed the guest list. It is also possible to provide the customization, convenience, as well
as affordability by providing unique stay experience. The unique stay experience of Airbnb
helped it in numerous ways. The major benefit is that it is able to welcome its customers
again. Airbnb team has also undertaken the creative ways through which it is able to add
more value. It is also able to achieve growth with the help of unconventional teams. Airbnb
helps in meeting the customers need face to face by providing them the valuable feedback. At

the same time, Airbnb allows the guests to create the better real life connection with the
residents (Dahlander, Frederiksen and Rullani, 2008).
Innovation brought by AirBnB
AirBnB has brought several innovation in the organisation. It uses the latest technology in its
system for allowing the hosts to charge competitive prices and gain more. Even Hosts are
allowed to set the prices by using two methods (Cheng and Foley, 2019). The first method is
AirBnB price calculator. The second way is the AirBnB pricing strategy. It has stated that
innovation is essential to survive in today’s competitive environment. Due to this reason,
some of the hotels will be withdraw from the market. Due to its unique market position,
AirBnB also not comply with the complex rules. The success of AirBnB in travel
accommodation is found to be the major disruptive innovation (Guttentag, 2015). With the
help of disruptive innovation, it is able to create the new value by creating some new or
innovative services to the customers. Due to this, it is also able to gain the revenue and
thereby maintains the competitive advantage (Keinz, Hienerth and Lettl, 2012).
Airbnb has also ensured the innovation by moving beyond providing houses on rent. In-house
innovation has also brought by it that works for finding out the ideas beyond the apartment
and home rentals. Samara lab’s first ever project is its community centre that has designed the
hub for its guests who are staying in the area. However, it is critically stated that these
community centres as some new form of rental for the company.
At the same time, Airbnb has proved itself as the best company in disruptive innovation. The
business model of Airbnb allows for the low value customers as it do not require Airbnb to
own any property of own the staff (Guttentag & Smith, 2017). Recently, Airbnb has done the
acquisition in order to continue to diversify the revenue except its basic booking services. He
acquisition has been done for helping the company in becoming diversified and growing. At
the same time, it has also done the partnership with some of the travel apps such as Concur.
In the recent year, it is also found that Airbnb has also brought the HotelTonight. It is a app
for finding the hotel rooms in discount that helps in attracting the wide number of travellers.
At the same time, this has also increased the inventory of the company by adding the number
of hotels (Zervas, Proserpio and Byers, 2017). The most innovative part of this is that it has
also added the guided activities and tours by adding the transportation services.

It is critically argues that due to the changing demand of customers, it still required to work
on different innovative aspects. At the same time, some people are not aware about its
services that might decrease its excellence.
What makes this organization innovative in the marketplace? How does this form the
basis
of its competitive advantage?
It is found that the company has current brought “Beyond by Airbnb.” Under this innovation,
a new and unique service for travelling has been brought that tends to offer the curated
experiences including best and unique accommodations experiences. It is also said to be the
product of Airbnb's procurement of the Extravagance Retreats. Innovation homes that are
portion of beyond are among Airbnb's not “high-end homes”: mountain mansions as well as
beachside villas. Airbnb is said to be the world’s leading and most innovative community-
driven company in the hospitality sector(Biber, Light, Ruhl & Salzman, 2017). At the same
time, it has also disclosed the coming chapter in its vision or mission for altering the method
through which people are offering an alternative to mass produced tourism. Besides this,
Airbnb is also working hard on an updated app, that has creative features and launching a
international brand campaign that will assist it in inspiring the individuals or people to variant
the way they are seeing as well as experiencing the world around them Airbnb has already
proved itself as one of the world’s biggest and best provider of accommodation where around
more than 80 million people worldwide by providing them the unique experience by staying
in someone’s home when they travel.
It has created its value in the market by ensuring several innovations across the world. It has
also brought the application of mobile app by creating the new design. This new app has
given the access to traveller regarding millions of app. Therefore, by creating the biggest
brand campaign, it has increased its value in the market (Reinhold and Dolnicar, 2018). At
the same time, Airbnb is able to develop its brand proposition that is rooted in the
communities, travel, experiences and travel. Due to this, it is able to provide the best
experience to the people that further helps in maintaining the competitive advantage. Airbnb
has also redesigned its app by improving its algorithm to present the users with the proper
listings and information.

Airbnb is effectively able to bring the innovation in the market. It tends to bring the
disruption in order to give the competitive response. Airbnb states that some innovation
provide the competitors to attack over the firm. It is also able to bring the service innovation
by bringing various transformations. It provides access to the short term rentals such as
apartments, homes, as well as bedrooms (Poon & Huang, 2017). These services of Airbnb
have delivered a fun, efficient, as well as satisfying solution to the people.
At the same time, it is also found that Airbnb allowed the person to take rest on an airbed in
some casual person's living room at a very cheap price. Moreover, individuals that were
attracted to Airbnb are not the similar person that were paying attention to Marriott, as it
previously not has any of the innovative qualities of a hotel. It is therefore one such model of
business that assists or allowed for these low-value customers because it didn't require Airbnb
to own the property as well as does not require to employ the operating staff. The Airbnb
also provides a low-cost solution to a low-value customer (Nguyen, Rintamäki and Saarijärvi,
2018).
In the present time, Airbnb has also effectively evolved the “peer-to-peer model.” It is done
to provide the hosts assistance to some of the tech tools that are required to effectively run a
effective and sophisticated operation (Cohen and Sundararajan, 2015). It is also found that
around more than 40 percent of the listings of Airbnb is available through the instant book. In
addition to this, it also allows the guests to make reservations and a new check-in tool that
assist them in providing the arrival instructions through the app. At the same time, company
has also extended into Business Travel Ready listings, that provide the travellers well

guaranteed Wi-Fi, designated work space, and more. It has also made several efforts to
address the humanitarian issues. Due to this, Airbnb has launched an Open Homes program
in the year 2017 that allows hosts to displaced travellers, housing to refugees, and those
shelter after disasters (Chesbrough and Appleyard, 2007)..
In the recent time, several firms are leading to the generation of disruptive innovation. In the
recent time, dominant products and players eventually losing their positions in the current
market. AirBnB has its great presence in only by providing rental and hospitality services.
The online website of Airbnb allows the host to post their homes, apartments as well as
cottages on the site. Due to such innovation, one can easily find out the apartments (Gobble,
2015).Due to its innovation, company is also getting famous. In spite of the stiff competition,
recent hotel industries are not able to cope up with the AirBnB because they are even not able
to match with the innovation capabilities of AirBnB. It has also incorporated the modern
internet technologies in the daily operations.
Innovation management done by Airbnb
Innovation management is said to be the control and leadership of innovation. AirBnB takes
several measures in bringing innovation. The first way of implementing effective innovation
by AirBnB is providing the freedom to workers. By ensuring this, it is able to bring creativity
at the workplace. The essence of AirBnB innovation depends on the employee’s creativity
process. In addition to this, it also provides the enough resources to the team members for
implementing the innovative ideas. Due to this, it is possible for its workers to convert their
ideas into the reality. At the same time, it also ensures enough investment in the research and
development for executing the innovative concepts for the further development. Airbnb also
believes in the concept of trust at the time of implementing innovation. It stated that for
creating more agile and innovative ideas, trust among the employees is significant.
Innovation requirement in the organisation are also providing more autonomy to the
employees. It believes that employees should have enough flexibility in order to work
effectively in the workplace and achieve growth. At the same time, autonomy helps the
employees to think out of the box as ideas are being valued by the organisation. when
employees ideas are given the due consideration, they are likely to give more focus on the
creation of new ideas (West and Sims, 2016).

The innovative measures and implementation of these measures has created the
contemporary, luxurious as well as personalised experience (Baldwin and Von Hippel, 2011).
Due to this, AirBnB is also transforming the entire industry by using the social networking
sites in effective manner. This innovative capability has also cut down the requirement of
middle man of putting customers in contacting with the customers for looking to rent out the
bedrooms or spare homes.
Moreover, it is found that Airbnb used the Design Thinking principles and Lean start up.
When Airbnb started its business, the photos that is displayed on website were not of the best
or great quality. In the year 2009, Airbnb was too much close to going broken. Similar to so
many startups, they had also launched but was not noticed by anyone. Due to this, company’s
revenue was flat lined at $200 per week. It directly meant it was near indefinite losses on zero
growth. Innovation is therefore not an easy task as it requires due consideration on the part of
organisation as well as its concerned team members. Therefore, by making use of different
techniques, Airbnb is able to effective manage the innovation. Not only the top level
management, lower level management has also given their best to carry out the process in
effective manner (Lakhani and Panetta, 2007).
Strength and weaknesses of the platform, challenges in participation and engagement
It is true that every company has its online platform for ensuring the collaboration with the
public for innovation (Oskam & Boswijk, 2016). Similarly, Airbnb has also undertaken the
Facebook account. By participating on the channel of innovation, I come across several
strengths and weaknesses. The major strength that I have seen is the generation of pool of
ideas. By ensuring this, companies are able to gain variety of ideas from different people at
one time. at the same time, several weaknesses are also attached with this platform (Phua,
2019). Feedback is the major disadvantage that is being seen. Every person is not able to get
feedback regarding his or her idea (Shaughnessy, 2016). Therefore, it should have appointed
effective members in this regard who will provide the proper feedback to the people
regarding their feedback. The major challenge that I have faced in the participation was the
interaction or feedback. I was not able to effectively engage myself at the time of
participating in online platform. Due to this, I have faced difficulty in interacting with the
members. In this way, I have seen the different strengths and weaknesses in the innovation
platform (Pisano and Verganti, 2008).

Conclusion
In the limelight of above discussion, it can be concluded that AirBnB has gone through
several innovation that helps it in achieving the competitive advantage over other
competitors. Airbnb has proved itself best by ensuring the disruptive innovation. At the same
time, it is also able to think beyond providing the houses on rent. Due to this, In-house
innovation has also brought by the Airbnb that works for finding out the ideas beyond the
apartment and home rentals. It also has effective team who manage its operations in best and
collaborative manner.

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