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Airbnb Individual Assignment

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96 views3 pages

Airbnb Individual Assignment

Uploaded by

thuytrangdinh555
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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STRATEGIC MANAGEMENT

INDIVIDUAL ASSIGNMENT
CASE STUDY: AIRBNB BUSINESS MODEL DEVELOPMENT
AND FUTURE CHALLENGES

SUBMITTED BY
SREERENJINI. K. R
MBA A
B2491
Summary

The case examines the origins of the Airbnb business model, its early stages, and its
evolution over time. Airbnb has concentrated on expanding geographically, identifying
consumer desires, and retaining users through social media channels. With the market slowly
rising and evolving, Airbnb is up against new entrants and strong rivals, as well as some legal
issues that hinder the company's future development. The case focus the existing
administrative and key problem that management is looking at, which should be approached
thoughtfully in order to allow movement but still maintaining a competitive position.

1. What is Airbnb's business model? What metrics indicates that Airbnb' business model
is working?

The Airbnb’s business model was to provide accommodation for the people who
seeking. They created their own websites to advertise its offer for an overnight stay.
They connect with their consumer group, which includes travellers, guests, and
experience suppliers, in a special manner. The brand has built a number of
communities and fan followers for all consumer groups using the rating system and
the opportunity to customise products, which is how they hold up the customer
relationship. The fact that customers from all walks of life were interested in the
service demonstrated the feasibility and marketability of the business model. With
some changes and improvements to their market, Airbnb has been able to draw more
and more tenants to their growing host community across the globe.

2. What was Airbnb's market entry strategy?

They originally concentrated on large conventions that had taken place, focusing on
the differences between the amount of available hotel rooms and the number of
conference attendees, in order to quantify the need for their service. They relied
heavily on blogs for ads due to their limited budget. They also preferred the hosts who
would be present when the house was rented out of the ones mentioned. Later on, the
lists were extended from event-based to more general, and they also made it easier for
guests and hosts to exchange fees, making the experience more pleasant for all
parties.

3. How has the industry evolved and what are the major threats for Airbnb now?

As the industry grew, more and more players entered the fray, posing a challenge to
Airbnb. The major threat for Airbnb was faced competition from three sources:
copycats, vacation rentals, and one-stop vacation providers. There was a slew of
imitators who adopted Airbnb's business model but in various parts of the world.
Other vacation rental companies that traded in the same category included
HomeAway, VRBO, and Flipkey. In contrast to Airbnb's organic growth approach,
these businesses were still high in terms of funding, market name, and acquisition
growth. They were still up against major hotel aggregators like Hotels.com and
Travelocity, which can offer robust packages at decent rates right at the last minute.
4. What should Airbnb do about its legal challenges and competitive threats?

To deter complaints, Airbnb would have to ensure that the hosts in different locations
obey their respective municipal codes, since different countries have different laws
and regulations. They should also take a less militant stance and attempt to work with
the legal conditions in terms of permits or tax charges that are needed to guarantee the
success of their business model and to ensure compliance with regulations where
appropriate. In spite of competitive risks, Airbnb stands out from its rivals because of
the exclusive, inexpensive, and comfortable experience offered to users by their
service. However, since the user experience is dependent on the hosts, Airbnb must be
more mindful of and accountable for the agreements made. They should ensure that
the rentals offered by their hosts meet a certain criteria in order to provide the client
with the experience they need, and they should also take more responsibility for their
services than just facilitating. To win people's confidence, they should concentrate
more on their social media presence, customer feedback, and celebrity endorsements.

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