CASE 1st 1

Case 1st

BUSI4153

Business strategy

Professor: - Louis Blais

Yorkville University

Submission Date: - August 2, 2021

Table of Content

Topic Page No.

1. Introduction ………………………………………………………………………….3

2. Identification of company’s industry

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including its position ………………………………………………………………4

3. Airbnb Mission, Vision, objectives, and strategies: ……………………………….5

4. SWOT analysis…………………………………………………………………….5

 Strengths ……………………………………………………………………6

 Weakness …………………………………………………………………….7

 Opportunities ………………………………………………………………… 7

 Threats ……………………………………………………………………….9

5. References …………………………………………………………………………….10

Introduction

Airbnb stands for air bed and breakfast. Airbnb incorporation is a vacation rental American

company that carry out its activities at online marketplace. The major activities of this company

are tourism, lodging and temporary homestays for vacation rentals. The headquarters of this
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company are in San Francisco, California and it was founded in 2008 by Joe Gebbia (director

and chairman), Brian Chesky (CEO) and Nathan blecharczyk (CSO and Chairman) and people

connect with the company through the company website or mobile app (Urde, 2009). Airbnb do

not have any physical location. The criterion for earning the profit is Commission based which is

unique and effective.

Historically, the idea came up from two roommates Brian and Joe, they commenced the venture

when Brian's former roommate Nathan joins them. Initially, they started providing the facilities

of living quarters and break fast for those who were unable to book hotels or restaurants for

themselves to stay. The company got funds by collaborating with other companies and they use

the fundings for promoting the company to a wider range of people. Day by day, the company

started getting attention and they expand the facilities by providing entire homes and apartment

on rent. The recent news shows that Airbnb has a tool that can enable the customer to check the

Wi-Fi speed before booking. The revenue of the company has been affected by COVID-19 but

the current status shows that the company is showing some improvements due to the new

strategies brought up by the founders. The business model of Airbnb is multi sided platform that

connects host and travelers from all over the world.

Identification of company’s industry including its position:

Airbnb belongs to the lodging industry which basically involves travel and tourism industry that

represents various lodging operations, activities related to tourism, food options, retail stores and

transportation services. Lodging industry is all about meeting the needs of the guest by providing
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them renting of homes, apartments or a flat for a small period and, it includes food and traveling

services for their customers. In other words, all the facilities of hotels, restaurants motel came

under the lodging industry. The lodging industry can be considered as a very huge industry

because it covers more then 49,500 properties, 4.6 million guest rooms, provide 7.5 million jobs

and earn more than $45 billion revenue (David, 2006). There are many competitors of Airbnb

such as: Vrbo, FlipKey, HomeAway, Booking.com and many more. However, home away is the

biggest competitor of Airbnb nowadays and home away has 2 million listings and operates in

more than 190 countries.

Similarly, Airbnb came under the lodging industry as it shared many common features. The

lodging industry includes various types of hotels, and the price and quality of hotels vary

according to the affordability of the customers. Similarly, Airbnb also provide the facility to

choose so that everyone can easily afford it. Airbnb is becoming the main factor of uplifting the

lodging industry because Airbnb has a very fast service. Air BNB provides low price hotel rooms

and other facilities in the most peak periods where customers feel very difficult to get hotel

booking. Airbnb is helping people and it make availability of additional rooms for its customers

for their better experience.

Airbnb Mission, Vision, objectives, and strategies:

Airbnb's mission is to ‘create a world where anyone can belong anywhere’, this statement means

that the company want to create a society which is open, and people can travel to distant places

and still they can get their home feeling (Balanescu, 2008). The company want their customers to
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get higher level of satisfaction. The company wants to improve people’s life, raise their

satisfaction level, and create a sense of belongingness in them.

Airbnb Vision Statement is, ‘belong anywhere’ this means that the future goal of the company is

to provide a lodging service in a way where people feel like home, where any person at any place

feels safe and secure. Following are the two major strategies followed by the company such as:

Following a platform business model: Platform business model is a business model which helps

to cover all the goals with help of participants for instance Airbnb company does not have any

estate these participants help to cover the goals of Airbnb company (Hartley, 2008).

Focus on community and trust: The company trust gain with connecting other host, sharing

stories, giving every update and helps to keep everything safe. For example, secure payments,

protection of account and 24/7 global assistance.

SWOT analysis

Moving further, SWOT analysis for this company is discussed below. The aim is to analyze the

internal and external factors which includes strengths, weaknesses, opportunities, and threats

which this company is facing.

Strengths of Airbnb company

To start with a strengths of Airbnb company, firstly being as well-established brand can be

considered as one of its strength because, it has a decent image in public. the plan of action of
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this company empowers to rival low costs in correlation with visitors and also hotels. In addition

to this, it has been seen that this company is expanding its products outside its centre facilities in

order to set up a start to finish travel stage along with adding various tasks and activities for the

visitors with proper guidance of cooking classes and meetups Airbnb (2021). Moreover, this

company is recognized worldwide and there are so many new clients that incorporates hotels and

visitors. In addition to this, talking about prices of this company then it has been seen that this

company often offers cheaper prices as compared to other hotels. This company follow low

pricing strategy which works as a broker and on commissions with a single booking Airbnb

(2021).

Interestingly, Airbnb plus is an uncommon element given by this is company which was

introduced in the year of 2018. It can be considered as one of its strength because, the different

choices under Airbnb plus are extra conveniences like those found in hotels, directly from

standards to extravagance postings. Another strong point of this company can be web-based

media presence on various social media websites and apps. which connects lots of new clients.

Along with this good customer service can be another positive point of this company. Their

clients leave all feedback from on their website which is one of the way that attracts another new

the clients.

Weakness of Airbnb company

It has been seen that this company accused of destroying the social fabrics of various cities

worldwide. Taking an example of Amsterdam, this place has been accused because of turning
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many homes into cash generating assets rather than making a place to live people Airbnb (2021).

Moreover, very important point which is considered as one of the weakness of this company is

its poor and flawed business model. It has been said that business model of this company is very

easy to copy by others video help of global success in innovative technology and also increment

in digital innovation.

Moving further, poor quality of service provided by the host of this company is also a weak

point. This happened because there is not any control over their hosts Airbnb (2021). when the

host is not able to follow the rules of this company that can be easily seen by their customers,

and they provide the reactions via online media as a feedback. Which was happened that made it

weak in terms of host service.

Opportunities

Upsell the travel experience as much as possible; Rather of making lodging a necessity for

visitors, Airbnb makes accommodation a fun part of the experience for travelers who are looking

for somewhere to stay. Beyond the apparent cost savings, Airbnb's appeal will be based on

appealing to the individuality of a person's stay. (Gaille, 2021)

Extension of the company's service offerings; Airbnb's current business model may be

expanded to incorporate additional supplementary services such as plane travel, automobile

rental, tickets for sites or activities, and more. Success in this endeavor will allow for the creation

of the next step in its development: a destination package. (Gaille, 2021)

individuals working from home during pandemic creates long-term apartment leasing

prospects. The opportunity is short-term, but it offers up a larger range of possibilities. Because

many people may now work from home on a more permanent basis, travelers may be more open
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to staying in different areas for extended periods of time and working remotely from those new

locations. Airbnb may begin to recruit hosts who give longer-term rentals in addition to its more

traditional vacation stays to meet this demand. By offering a holiday experience for remote

employees, hosts may be able to make more money. (Gaille, 2021)

Global expansion is expected to be maintained; Airbnb has struggled to establish itself in a

number of locations throughout the world, particularly in emerging economies. As an early

entrant into the travel business, capturing opportunities all around the world may be a huge

source of development. (Gaille, 2021)

It may boost the strength of its mobile app. Airbnb, like many other modern businesses, offers

a mobile app that allows customers to book rooms from anywhere, including when traveling. It

will be more accessible to more passengers as a result of the company's investment on a seamless

mobile experience. (Gaille, 2021)

To improve its market penetration, it might customize its marketing. The diversity of venues

made accessible by Airbnb contributes significantly to its uniqueness. It may expand on its

distinct selling feature by creating specialized marketing campaigns targeting at specific

segments of the tourism industry. This might give them the idea that they're attending a catered

event, making them feel special. (Gaille, 2021)

Threats
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Current and future legal frameworks are unknown. It seems that local and state governments

are constantly changing what is needed of a private property owner before they are allowed to

rent out their space. Airbnb owners should do their study before renting out their place due to the

constantly changing legal restrictions. (Gaille, 2021)

The competitors' list is remarkable. A number of Airbnb's competitors compete directly with

the company's business strategy of renting out unique apartments to travelers directly. The

savings offered by companies like Booking.com and Hotels.com are also greater than those

offered by hotels directly. Both of these categories have the potential to erode Airbnb's primary

benefits, namely its low cost and distinctiveness. (Gaille, 2021)

Business model concerns with physical safety make Airbnb more legally liable. A shooting

at an Airbnb Halloween party killed five people, leading the company to implement additional

security precautions. Visitors to Airbnb, on the other hand, are still in danger. Other variables

may be at play, even though violent parties are not always to fault. Many Airbnb homes, for

example, lacked smoke alarms, carbon monoxide monitors, fire extinguishers, and first-aid

supplies, according to Time magazine. (Gaille, 2021)

Airbnb's youthful appeal is catching up with hotels. Hotel companies are now better

understanding the requirements and desires of travelers. Other creative responses to a nimbler

grassroots competitor are being sought.

Airbnb may appeal to budget-conscious and location-savvy travelers looking for unique rooms to

complement their destination visit. Hosts can also make money by renting out destination areas,

however local restrictions may make it difficult to do so legally. (Gaille, 2021).

References
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Airbnb (2021) About us, available at: https://press.airbnb.com/about-us/  (accessed 25 January

2021)

Airbnb SWOT & PESTLE Analysis: SWOT & PESTLE. (2020, September 04). Retrieved from

https://www.swotandpestle.com/airbnb/

Bălănescu, G. (2008). Vision, mission, and corporate values. A comparative analysis of the top

50 US companies. Management & Marketing, 3(3), 19-38.

David, F. (2006). The measurement in the lodging industry and Airbnb company. International

Journal of Management, 23(2), 296.

Gaille, B. (2021, February 25). Airbnb SWOT Analysis (2021): 30 Big Strengths and

Weaknesses. Retrieved from https://brandongaille.com/airbnb-swot-analysis/

Hartley, M. (2006). The major objectives and strategies of Airbnb company. The Journal of

Higher Education, 77(3), 456-471.

Urde, M. (2009). An introduction of Airbnb company. Management Decision, 47(4), 616-638.