Disruptive Innovation and Airbnb: A Comprehensive Report

This report examines Airbnb's approach to innovation management, focusing on the disruptive innovation theory. It begins with an introduction to innovation management and its relevance, followed by a detailed analysis of disruptive innovation, including its processes, principles, advantages, and disadvantages. The report then provides background information on Airbnb, including its historical development and business model, and applies the disruptive innovation model to the company. It discusses Airbnb's past and present status, highlighting its innovative products and services, and explores potential future developments. The report concludes by summarizing the key findings and providing relevant references. This report is a comprehensive analysis of Airbnb's innovation strategies, illustrating how the company has successfully leveraged disruptive innovation to achieve its current market position and outlining potential future growth strategies.

Managing innovation

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Disruptive innovation theory..................................................................................................1
Process and principles of disruptive theory............................................................................2
Pros and cons of theory..........................................................................................................4
TASK 2............................................................................................................................................5
Background of company.........................................................................................................5
Disruptive innovative model at Airbnb company..................................................................7
Past and present status............................................................................................................8
Future development................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Innovation management includes the set of tools that refers to the handling of all the
activities needed to introduce new ideas and developing process. It is an everywhere.
Management is a term which is used by the every company and responsible for managing and
coordinating task and activities that are happened in organisation (Aalbers and Dolfsma, 2015).
Present study is based on “Airbnb” is the privately global company. That operates online
marketplace and hospitality services like websites and mobile apps. In 2009 company received
600000 in seed money. Company does not own any real estate listings nor host any events.
Management take commission from every booking. Company provide their services in services
industry peer-to-peer property rental.
Study lays emphasis on disruptive innovation theory and it processes and principles. It is
will show its advantages and disadvantages of this theory. Report will show by the background
of selected company like historical development of innovating product and its future
development. Apply innovation theory in development of company in present and future. It is
also highlighted by the business model canvas for the company. This theory model help to
develop company growth in present as well as future.
TASK 1
Disruptive innovation theory
This innovation model creates a new market and value network. Disruptive innovation
theory model is used in several business industry. It influences the humans thinking and research
in the area of innovation management, strategy, organisation (Alderman and et.al., 2015). That
help to management to get the right and correct innovative ideas for getting work done. This
theory model describe any situation which is happing in organisation and successfully. The
problem with this model is innovation break through the changes in industry competitive
patterns. That different innovation requires with different strategic approaches. By this Airbnb
company is able to do successfully changes in innovation with fewer resource. This innovation
model focus on improving products and services.
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Process and principles of disruptive theory
Process and principles of disruptive innovation theory model.
Process of disruptive
 This model shows that, customers demand performance by the existing market increases
over time, so that company have to provide services by technology paradigm.
 Performance of company when improve then customers demand more and when
performance of company is decreases then demand is decreases by customers
(Disruptive innovation model, 2017).
 New technology that only plays in competitive market and customers networks.
 This provide innovation to Airbnb company, by this company have innovative ideas and
provide to its customers.
 By this management of company is able to set performance of company.
 It actually go in hand to hand process. Company can't able to improve their product to
the point without any innovative idea.
 It is good for the customers to use this innovation and pay for it.
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Illustration 1: disruptive innovation
model
(Source : Disruptive innovation model,
2017)

 Innovation of disruptive is take place in over industry. By this company get extra profits
and money by that.
 This company able to improve their performance and productivity, will get extra profits
form this innovation.
Process give always right and clear steps for production process. By this company and
management take decisions for product and in its innovations. It goods and better for innovation
process. Step by step instructions are help to take right decisions for products.
Principle of disruptive
Disruptive innovation model has the 5 principles. That are as follows:
High performance standing teams:
Standing teams are always focused on the references. They are basic and best ways
thought company can able to achieve goal of the company. It is the basic and foremost principle
of the disruptive innovation model (Altuna and et.al., 2015). This says the stand proper and
effective team for working and who are give their full efforts for doing new innovations. Team
members are able to understand the needs and wants of customers.
High performance agile engineering:
It is the key principle of the disruptive innovation model. According to this principle,
company have to develop and test the production system and also check the operational quality
of products. It is important to check quality of product because success of product and company
is depends on the quality of product.
Product and lean experimentation:
This principle says that know to customers very deeply and start with small business.
Customers needs and wants are important to understand by the company and its management.
Analysis of market trends and test are important. With small step of business is help to know
about customers and theirs preferences (Biemans, 2018). By this company know which type of
innovation is perfect for introducing at marketplace.
Budgeting and incremental funding:
Budgeting is the very time consuming process but helpful for allocating for knowing
about future expenses. That include three steps of budget making. That are start with dynamic
planning like yearly and quarterly updates. By this company get the right pre-arguments of
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budgets. With the budget management is ready for their expenses which are happing in the
future. It is the important principle of disruptive innovation model.
Innovation pipeline management:
After the whole performance, this principle is applicable that is innovation pipeline
management. This principle is says that innovate their product at marketplace by using new
technology and tools. It is the effective and best part of the every business and company is
production.
That whole principles are help to understanding the market, lean test and pipeline of
production (Christensen And et.al., 2016). That principles are support to company for doing best
and perfect innovation by analysing market and customers needs and wants.
Pros and cons of theory
Pros and cons of disruptive innovation theory model.
Advantages of disruptive
 This model help to extract company in market by innovating and introducing new
products at market. New product attracts customers towards it.
 This affect the current operation of the company by identifying area of process and
improvement.
 This model has the advantage it is more effective and valuable for the growth of the
company.
 By this model management is able to make right strategies and take right decisions
according to innovative product.
 This help to management and leaders of Airbnb company by finding present and future.
 This help to create opportunity for the future growth by innovating possible new changes
in the products at marketplace for customers.
 By this company culture get new learning community.
Disadvantages of disruptive
 This model require a separate strategy model (Christensen, Raynor and McDonald,
2015). This process is focus on problem, success, opportunity.
 This model design the product and services that help to understand the current behaviour
of customers. Aim of peoples the design of innovation.
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 By this company not achieve the biggest profit more fast according to this nature of new
market and its requirements.
 Success goes through innovation is not necessary because most of the time it not working
in right way. That will give negative impact on company growth and its productivity.
 This model has the disadvantage by other competing innovation and products. This can
only offering existing market that can provide only solutions to your customers.
 By innovation has a disadvantage that is more risky is that. In that having more risk from
innovation.
 Most of the time company is not make the right plan for innovative product. In this case,
they are not make right planning and not get right think.
 By this management most of time not able to do right and correct innovation in product.
 By this they face problems regarding customers and profits.
TASK 2
Background of company
The Airbnb company was founded in San Francisco during 2008. Company provide peer-
to-peer services that specialized in housing accommodation. The idea was created to business
around local experience. Airbnb still meant to be more than just functional and lower cost hotal
rooms (Dodgson, 2018). The key success of company always been the community. It is an
important concept of that keep in the mind of founder. They tey to give effective and valuable
services to their customers. The mission of airbnb is to live in the world where fell like home and
not in home. Mission statements is help to fulfil the vision of the company. It has vision in they
took and look at the big picture.
Company has their valuation of $30 billion, is approaching $2 billion per year in revenue
and its listing in more than 91 countries. Company has privately global company. That operates
an online marketplace and hospitality service. Company has their products which is accessible
via its websites and mobile apps. Members can use this services by arranging and offering
lodging and tourism experience. Customers experience is always help to make innovation in the
company because customers shares their personal view with the management. By this company
get ideas of doing new and innovative in their products and services. Management receives
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commissions from their every bookings and services. It is the first just to make a few bucks.
They put websites together that help to provide short term living quarters and networking os
business opportunity for them.
Historical development of innovating product
Historical development of airbnb was started from few month ago. In 2007 company
started the rent for apartments where they went up by 25% from the day to the next. By this they
decided to create platform by offering the cheap alternative hotels (Ferreira And et.al., 2015).
Company project is airbed and breakfast by that they earn 1000 dollars in during days of starting
new company. Company has various websites where customers can get the ideas of available
rooms and apartments. Every start-up requires proper funds and drives, but Airbnb founder get
ideas of this innovation and do this things in actually. In 2008 summers company take place in
democratic party and reach to towards the success.
Analysis the services of Airbnb
Company manage the seasonal services on the behalf of owner. In that services they
include meet or greet, cleaning and check their rooms and services on daily basis. Management
of company communicate with customers in very clear way and create more flexible friendly
environment. Airbnb management services equally talk about the short management services,
holiday lettings or even 2.0 services refers to our trade. Management's average services costs
20% of rate per night. Company only focus on the continues improve their performance in very
short time more than 1000000.
Airbnb lunches the new products for inspire and attract customers and peoples towards it.
Company introduces rolling out updated app, with new features and global campaign brand
(Kain, Hwang and Warner, 2015). That will help to encourage the people to changes their
experience. It hep to attract customer and improve the productivity or company.
Company uses many resources for innovating their product and also reviews of
customers. Customers reviews help to develop product and get new and innovative ideas for
existing product. That is better and good for product development and improve its productivity
and profits of the company. Airbnb has world largest accommodation provider more than 80
million peoples from worldwide. Company newly update the Airbnb mobile app this design is
brand new language. Every new product includes innovative system that designed to understand
the preference and meet their needs. It is a better for product development and its growth.
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Disruptive innovative model at Airbnb company
The concept of disruptive innovation model is get innovation and improve productivity of
company by attracting peoples towards it. It is the best and better ways for doing innovations for
company profits. This business model change the whole field of business. This model helpful for
getting new ideas for product innovation (Airbnb innovation model, 2017). Innovation
considered the level of failure such as the attractive and it has the risk with innovation
investments. The various features are help to making different innovations from the various types
of investments. That help to utilization of resources and help to enhance the current core
competition of the company at market place.
These trend has that indicate the process of innovating ideas by making it more flexible.
This model help to Airbnb to generate new ideas for the upcoming future. By this company is
able to analysis the market trends and customers needs and wants in right and perfect ways.
Company when is able to analysis that, then able to make new ideas for doping changing in their
existing products (Vanhaverbeke, 2017). Customers are more satisfied by this and give their
positive reviews. By these customers attract towards it and it helpful for improve their
productivity and profits of firm. Innovation in product is important for the every company
growth and its productivity.
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Illustration 2: Airbnb
(sources :Airbnb innovation model, 2017)

Peoples are attracted towards their new and innovative ideas that is airbed. Airbed it more
comfortable for the peoples. In this product company use the beat and better quality. That attract
the higher needs of customers. This model when apply in the Airbnb then they can improve their
productivity and innovations (McPhee, 2016). This model help to introducing new technologies
for new products. The purpose of this to make changes in the existing products, services,
methods and strategies to improve productivity, efficiency and competitive differentiation of
products. Disruptive innovation model help to company for doing any innovations by using
specific ideas.
Past and present status
In the past company has only idea to doing work and innovations and also founder has no
funds and finance for doing this. But founder want that do this innovation at marketplace and
gain profits from that. It is best and good for that. Founder have idea like beds and breakfast and
online apps and websites (Growth of company, 2017). By this they give all the information about
products to its customers. Its runs and in present they get idea like make new airbed for attract
customers towards the new product and actually it happens. Customers attract towards airbed and
shows their interest in that. For that company use better and effective quality of product and raw
material.
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Illustration 3: Growth of company
(sources: Growth of company. 2017)

Innovation model help to make innovative existing products by using its existing
strategies, methods etc.. That support to making new and innovative ideas for improve
productivity and profits of the company. In some cases this provides an advantage to existing
players. For process, knowledge, resources etc. such as the innovation can also help to face the
current competitors and give capability to serves new and basic needs of customers.
Future development
For their better future company can uses complete set of robotic tools that can help to
improving the productivity over its (Öberg, 2017). Even Airbnb company can offers robots that
help to customers to manage their performance. It is important for company introducing new
robotic technology by using disruptive innovation model. Company can use in very effectively.
That is good and better for future projection and growth of company. By using the business
canvas model in business activities it is help to solve and present all the activities of the Airbnb.
By this they manage effective planning for activities which are happing in the future growth of
company.
Airbnb company should introduce the effective and fundamental uses by giving new
ideas. That will be best for company and help to become a more successful company through
innovations in world. Cumulative efforts affect to growth of the company by using in more
disruptive way (Talukder, 2016). They should build theoretical base that come from the
customers reviews and process. Customers reviews helpful for future growth of the company.
CONCLUSION
From the above study it had been concluded that the management has played an
important role in every organisation. That had been support to manage all the thinks which
related to making discipline at the company. Managing innovation has affect the business and its
growth its positive but it risky. That effective and productive for company growth and profit.
Report had been covered by the disruptive innovation model that helped to company for making
innovative ideas by lunching at marketplace. This model has their principles and process.
Principles has support to making right and perfect budget and uses of tools and techniques.
Process of this model helped for step by step instruction for done innovation at the market place.
Disruptive innovation model has advantages and disadvantage. By that company understand the
requirement of that introduces new product at market place. Report has also covered by
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background of the company and its historical development and gets done through making new
strategies for that. Strategies helped for face competitors and earned more profits form that. Firm
applied disruptive innovation model at their production and their innovations then get more
production and profit. That helped for improve their future growth and get recommendations for
innovating product. In report also use the canvas model of business. This helped to making it
more effective and innovative.
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REFERENCES
Books and journals
Aalbers, R. and Dolfsma, W., 2015. Innovation networks: Managing the networked organization.
Routledge.
Alderman, N. and et.al., 2015. Managing Hidden Innovation.
Altuna, N. and et.al., 2015. Managing social innovation in for-profit organizations: the case of
Intesa Sanpaolo. European Journal of Innovation Management. 18(2). pp.258-280.
Bahemia, H., Squire, B. and Cousins, P., 2017. A multi-dimensional approach for managing
open innovation in NPD. International Journal of Operations & Production
Management. 37(10). pp.1366-1385.
Biemans, W., 2018. Managing innovation within networks. Routledge.
Christensen, C.M. And et.al., 2016. Disruptive innovation: Intellectual history and future
paths (pp. 1-52). Harvard Business School.
Christensen, C.M., Raynor, M.E. and McDonald, R., 2015. What is disruptive
innovation. Harvard Business Review. 93(12). pp.44-53.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
Ferreira, J.J. And et.al., 2015. Drivers of innovation strategies: testing the Tidd and Bessant
(2009) model. Journal of Business Research. 68(7). pp.1395-1403.
Kain, Z.N., Hwang, J. and Warner, M.A., 2015. Disruptive innovation and the specialty of
anesthesiology: the case for the perioperative surgical home. Anesthesia &
Analgesia. 120(5). pp.1155-1157.
McPhee, C., 2016. Managing Innovation. Technology Innovation Management Review. 6(4).
pp.3-4.
Öberg, C., 2017. How Innovation Impacts Artistic Creativity—Managing Innovation In The
Advertising Sector. In The Role of Creativity in the Management of Innovation: State of
the Art and Future Research Outlook (pp. 73-95).
Rubin, G.D. and Abramson, R.G., 2018. Creating value through incremental innovation:
Managing culture, structure, and process. Radiology. 288(2). pp.330-340.
Talukder, M., 2016. Managing innovation adoption: from innovation to implementation.
Routledge.
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Vanhaverbeke, W., 2017. Managing open innovation in SMEs. Cambridge University Press.
ONLINE
Airbnb innovation model. 2017. [online]. Available through:
<https://www.thecasecentre.org/programmeAdmin/products/view?id=134390>
Disruptive innovation model. 2017. [Online]. Available through: <https://hbr.org/2015/12/what-
is-disruptive-innovation>
Growth of company. 2017. [Online]. Available through:
<https://www.luc.edu/quinlan/stories/archive/airbnb-changing-business-through-
disruptive-innovation-says-professor.shtml>
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CANVAS BUSINESS MODEL
This model shares the details of key partners of the Airbnb company, like partners suppliers,
resources and activities that are performed in the company. Key activities are give value of
propositions require, distribution channels. This business model help to understand the market
trend and give better solutions for the growth. Value propositions deliver to the customers and by
this management is able to get the problems of customers and try solve at the time. By that
company get the customers segments and the key resources of the company. Key resources like
channels of distribution like public relations and online marketing. Customer relations always
plays an important role in the marketplace and company growth. It is the best way of customer
satisfaction and knowing about the needs and wants of customers. This business model help to
every business for establishing and stable their values at marketplace. Also, for making all the
work best and cost efficient. Channels of advertisement are sets by this model and help for
analysis of that. The canvas model help to managing all the activities of business. It is also
helped to recover the past variation for making future perfect. It is very effective and useful for
the company growth and making effective and standard of income statement of Airbnb. It is best
and effective model for future and recovery of past activities.
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