Analysis of Airbnb's Current Strategic Marketing Issues Report

This report provides a comprehensive analysis of Airbnb's current strategic marketing issues. It begins with an introduction to Airbnb, followed by an examination of its mission and vision. The report then delves into a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. A PESTEL analysis is conducted to assess the political, economic, social, technological, environmental, and legal factors affecting Airbnb. Porter's Five Forces are applied to evaluate the competitive landscape. The product life cycle of Airbnb is discussed, and the report concludes with a summary of key findings and strategic implications. The analysis covers various aspects of Airbnb's business, including its market position, competitive advantages, and potential challenges. The report utilizes relevant academic sources to support its findings, providing a well-rounded understanding of Airbnb's marketing environment.

Running Head: AIR BNB Current Strategic Marketing Issues
AIR BNB Current Strategic Market Issues
AIR BNB

AIR BNB Current Strategic Marketing Issues 1
Contents
Introduction.................................................................................................................................................2
Mission and Vision......................................................................................................................................2
SWOT Analysis...........................................................................................................................................3
Strengths..................................................................................................................................................3
Weaknesses.............................................................................................................................................3
Opportunities...........................................................................................................................................4
Threats.....................................................................................................................................................4
PESTEL Analysis........................................................................................................................................5
Porter’s Five Forces.....................................................................................................................................6
Product Life Cycle.......................................................................................................................................7
Conclusion...................................................................................................................................................7
References...................................................................................................................................................9

AIR BNB Current Strategic Marketing Issues 2
Introduction
Airbnb was founded in the year 2008. This company is located in San Francisco, California and
it is a trusted company for the people to discover and book different accommodations all over the
world. People can book the accommodations online or from the mobile application. Whether
there is a need for the spare bedroom, whole apartment, villa or a private island, Airbnb connects
people who are avid travelers. People come from different destinations and various cultures and
use Airbnb to connect. These amazing experiences can be taken in 34,000 cities and in 190
countries across the world. This company has served over 50 million people from the moment it
was founded. Market capitalization of Airbnb has become $30 billion. There are a huge number
of people who are loyal to the brand and exhibits high degree of honesty towards the brand
(Zervas et al., 2016).
Mission and Vision
There are a few reasons that alone or in the combination might explain Airbnb’s strategy of
marketing which has ignored the practical motivations for using the service and actually has
focused on the experiential motivations. It is always possible that the company gives more
importance to the experiential appeal to the accommodations. The CEO of the company has
explained the vision by saying that “Just like any other evangelical, he honestly believes in his
new-found faith”. When it was asked from Airbnb’s head of strategy and hospitality that where
he sees the brand in next few years, he said: “He wanted to see the company win a Nobel prize as
it delivers nice culture understanding and hospitality. The vision of the brand is to create
amazing experiences for the travelers so that the marketing and productivity of the brand
increases as there are yet many people who have not experienced Airbnb (Schaal, 2012).
The brand has a new mission to make people feel at home wherever they go and stay. Travelers
while their stay in the Airbnb accommodations should feel comfortable like they feel at their
own homes but still should get all the benefits that they get while staying in a hotel. They want
people to feel that they “belong anywhere” (Guttentag, 2016).

AIR BNB Current Strategic Marketing Issues 3
SWOT Analysis
SWOT analysis of any organization includes its strengths, weaknesses, opportunities and threats.
The SWOT analysis of Airbnb follows:
Strengths
Great customer services are provided 24 hours a day.One of kind opportunities for the travelers
across the world. Safety is guaranteed for host. The insurance covers $1 million per booking
these days. The business model is very clear on the basis of the services.It has the potential for
expanding and it can also operate internationally as this type of market exists across the world. It
is a well-known brand and has a good and stylish public image in the market.Prices from other
brands are less in Airbnb.Operates in most of the countries. They have a large number of users in
their databases and the number is still going. It is competent, staff is non-controversial. It is
trusted and safe and many people have experienced and shared their story about it.
Weaknesses
The lobbyist and other hotel industry people are fighting against it as it hampers their market
share. Airbnb is aware of this controversy and they know that it hampers the hotel industry
productivity.The idea is easily copied.It acts as the mediator between the host and the tenant.
This will generate additional cost and it involves the company in a lot of disputes.It gives the
rental prices by increasing the scarcity of the houses in the cities (Lehr, 2015). This brand
actually is dependent on the quality the host is providing. If issues arise with the host or by the
host then the reviews that the brand will have to face will be bad only.
Opportunities
Airbnb’s productivity can go high if the hotel experience of the people is not good enough. The
law and regulations change in San Francisco and Portland have agreed for legalizing most types
of the Airbnb listings in the tax exchange and other. Most of the services in the hotels in various

AIR BNB Current Strategic Marketing Issues 4
countries are expensive and this gives Airbnb a good opportunity for the growth.Press is good
because of the support for the activities in charity by Airbnb. For example: it helped in the
emergency in Hurricane Sandy, London and Sardinia for people to give the accommodations. It
has the mobile app from which people can easily book their accommodations. There is a
possibility to expand in the countries across the world as this type of business will work
anywhere in the world. The popularity is growing in the related markets like travel guides and
user suggestions. The numbers of travelers are growing day after day these days and so will the
need for stay in distant places will grow (Lin, 2016).
Threats
The competitors in the related market are growing. E.g.: Wimdu.com, travelrent.com. The
numbers of issues with the host that are unpleasant are increasing. There is always a threat of
lawsuits and fines. There were people who were sued for running the hotel illegally in New
York. Then Airbnb had to bare 30,000 Euros for this. An alternative idea might be out in future
of sharing the apartments. Operational costs can cause problems as they keep on growing day
after day.The number of quality hotels is growing and the idea of budget hotel is also on the
peak. This can also be a huge threat (Dyson, 2004).
PESTEL Analysis
Political Factors: This idea of Airbnb renting can bring the type of services which are abusing
and this might lead to illegal hotels.By increasing the minimum wage, this can lead to the costs
which are high and reductions in the services.The terrorists might attack or a conflict of military
might happen to frighten people and harm the hotels and people (Bonnici & Galea, 2015).
Economic Factors: The growth of China in economic terms is slowing.The exchange rates are
high in US and are charges in dollars.The ability for people to travel the hotels and live there is
decreasing these days.
Socio Culture: Travelers would love to spend the money in this brand as they love traveling and
they need different places to stay. The people who are old can always ask for luxury

AIR BNB Current Strategic Marketing Issues 5
accommodation packages and travel luxuries. Chinese people and Asian people are growing
(Rastogi & Trivedi, 2016).
Technological Factors: The services are online which helps people to book online by sitting in
their homes.The application of Airbnb can provide all the information on the phone itself.The
brand has created smart systems which help in seamless interaction between the sellers and the
buyers. This smart system technology also verifies the profiles and makes it easy for the check
INS and the check outs (Frue, 2017).
Environment Factors: The prices that are increased for fuel can lead to decrease in the travelling
of people.The change of climate can also stop people from travelling to distant lands. Global
warming is increasing and this is leading to the climate change and lots of heat across the world.
The costs of electricity might cause problems too.
Legal Factors: In case of any clash with the law will make the business to grow in economy.It
has faced clash with the law earlier in several cities in US.The taxes and the renting laws have
gone under clashes with the law (Pratap, 2017).
Porter’s Five Forces
Let us check the five forces of Airbnb.
The threat of New Entries: Threat to new entries in the market of Airbnb is taken as a weak and
flexible thing. On the top of the surface, it does not seem that there will be more barriers to the
entry and any other website cannot compete with Airbnb’s. It is just not only well funded but
also operates in 200 countries. Any company will have to invest millions to invest in the capital
and then will have to make such a large database which Airbnb has(Nurlansa, 2016).
The threat of Substitutes: This threat is quite high in case of Airbnb because switching the costs
is nonexistent to the individuals those who utilize this brand. The customers can easily choose
traditional hotels and B&B hotels as it can be an alternative in the future.
Bargaining power of customers: The power of bargaining of the customers with the brand is
considered to be quite high. Reason behind the bargaining power being so high is because they

AIR BNB Current Strategic Marketing Issues 6
have a huge range of services to provide from and customers can bargain as per their choice of
service. The growth of economy has been helpful in the development of the tourism and
hospitality of any country. The buyer power is high in this case of Airbnb(Zhang, 2016).
Bargaining Power of the suppliers: The power of the bargaining of the vendors is meager as
Airbnb control the connection between the two parties and this makes it hard for the parties to
have an alternative method to connect with the customers by using the app. In this case, the
supplier is the host that provides the accommodation and they are the major business drivers.
Industry Rivals: This is one of the greatest forces but in this case the rivalry is low. It is
considered that Airbnb has competitors like tripping.com, homeaway.com etc. but in reality,
none company of the same industry or domain can compete with Airbnb till today.
Product Life Cycle
Introduction Stage: At the initial level the launching was hard for Airbnb as had to maintain the
prices and build the customer base. This means that the sale is low at first and the investment is
high. Cost of things like research in 2008 for Airbnb was high. Development and testing and the
marketing were done at the higher level.
Growth Stage: This stage is typically characterizing by the growth in the profit and the sales as
Airbnb was also seeking the benefit of their investments at this stage. They eventually grew a lot
within a few years and the sakes went high in just a few months for them(Bhambri, 2015).
Maturity Stage: For Airbnb, one can say that it is at the maturity stage of the life cycle as Airbnb
has seen that growth it was looking for. It has built a huge customer data base and in coming
recent years it has no threat of new comers in the same industry.
Decline Stage: The product starts to shrink in the decline stage. For Airbnb, it is not the case yet.
It even going through the laws and policies breaches is going good for the market and it still has
the opportunity to grow in the certain markets(Productlifecycle, 2018).

AIR BNB Current Strategic Marketing Issues 7
Conclusion
This report focuses on the brand-named Airbnb and its growth in the market. It has grown a lot
within a few years and is loved by the avid travelers who are looking for the accommodations on
a cheaper or luxury costs. The SWOT analysis and PESTEL analysis is done to know the internal
and the external environment of the brand. The product life cycle is also discussed and it turns
out that the brand is at the maturity stage of the life cycle. This report focuses on the market
analysis of the brand Airbnb.

AIR BNB Current Strategic Marketing Issues 8
References
Bhambri, S., 2015. Product Life Cycle. International Journal Of Business Management, 2(1).
Bonnici, T.S. & Galea, D., 2015. PEST analysis. [Online] Available at: file:///C:/Users/Nidhi
%20Vyas_JPR/Downloads/sammut-bonnicipest.pdf [Accessed 16 March 2018].
Dyson, R.G., 2004. Strategic development and SWOT analysis at the University of Warwick.
European Journal of Operational Research, 152, pp.631-40.
Frue, K., 2017. PESTLE Analysis of Airbnb. [Online] Available at:
http://pestleanalysis.com/pestle-analysis-of-airbnb/ [Accessed 16 March 2018].
Guttentag, D.A., 2016. Why tourists choose Airbnb: A motivation-based segmentation study
underpinned by innovation concepts. [Online] Available at:
https://uwspace.uwaterloo.ca/bitstream/handle/10012/10684/Guttentag_Daniel.pdf [Accessed 16
March 2018].
Lehr, D., 2015. An Analysis of the Changing Competitive Landscape in the Hotel Industry
Regarding Airbnb”. [Online] Available at:
http://studenten.tudelft.nl/fileadmin/Files/studentenportal/os/BKspecifiek/Workshops/
An_Analysis_of_the_Changing_Competitive_Landscape_in_the_Hotel_In.pdf [Accessed 16
March 2018].
Lin, X., 2016. STRATEGY ANALYSIS OF A BOUTIQUE AND LIFESTYLE HOTEL: A. [Online]
Available at: https://broncoscholar.library.cpp.edu/bitstream/handle/10211.3/174609/
XiaomeLin_Project2016.pdf?sequence=4 [Accessed 16 March 2018].
Nurlansa, O., 2016. Analysis Porter’s Five forces Model on Airbn. Journal Electronics,
Informatics, and Vocational Education, 1(2).
Pratap, A., 2017. Air BnB’s Pestel Analysis. [Online] Available at:
https://www.cheshnotes.com/2017/09/air-bnb-pestel-analysis/ [Accessed 16 March 2018].
Productlifecycle, 2018. Product Life Cycle Stages. [Online] Available at:
http://productlifecyclestages.com/ [Accessed 16 March 2018].

AIR BNB Current Strategic Marketing Issues 9
Rastogi, N. & Trivedi, M.K., 2016. PESTLE TECHNIQUE – A TOOL TO IDENTIFY
EXTERNAL RISKS IN CONSTRUCTION PROJECTS. International Research Journal of
Engineering and Technology, 3(1).
Schaal, D., 2012. Airbnb CEO has a vision of a future where everyone shares — and Airbnb
collects a modest fee. [Online] Available at: https://skift.com/2012/11/16/airbnb-ceo-has-a-
vision-of-a-future-where-everyone-shares-and-airbnb-collects-a-modest-fee/ [Accessed 16
March 2018].
Zervas, G., Proserpio, D. & Byers, J.W., 2016. The Rise of the Sharing Economy: Estimating the
Impact of Airbnb on the Hotel Industry. [Online] Available at:
http://people.bu.edu/zg/publications/airbnb.pdf [Accessed 16 March 2018].
Zhang, L., 2016. VALUATION OF PRIVATE TECH COMPANIES – A CONCENTRATION ON
DISRUPTIVE INNOVATIONS. [Online] Available at:
http://studenttheses.cbs.dk/bitstream/handle/10417/6217/Lijing_Zhang.pdf?sequence=1
[Accessed 16 March 2018].