NAME; ETA CARSO TAMBE STUDENT NUMBER; 2207233 Course ; Strategic management professor; prof, sergey yablonsky

NAME; ETA CARSO TAMBE STUDENT NUMBER; 2207233 Course ; Strategic management professor; prof, sergey yablonsky.

Selected Company ; Airbnb. What is Airbnb ? In 2007, a group of investors came together in San Francisco in the United States, led by Brian Chesky, and this meeting saw the birth of a company known today as Airbnb. The company's main vision was to provide comfortable and affordable short term stay to travelers. Today the company has over 6.6 million listings in over 100,000 cities worldwide and has recorded a total of more than 1.4 billion clients (as of December 2022). However, it was not until 2010 that Airbnb recorded its first active listing in the UK..

The internal environment Analysis Airbnb's main mission is to create a world where anyone can belong anywhere by making accommodation easier. The company provides mainly short term rental homes throughout a wide range of travel destinations. The properties are owned by private individuals, who ensure the properties to the company, and get paid depending on the amount of stays recorded in the property. Most of the company's work is done online, through their website and some effort is put however to inspect the properties and make sure they are up to the company's hospitality taste. SWOT analysis; Strengths; Some of the company's strengths include; -Flexibility; they have a wide range of properties to choose from, so clients can easily match their taste to their budget -Everything is done online and through their mobile application, so you don’t have to search for the houses manually. -Much effort is also put in place to ensure that the properties are of satiable taste..

-Judging by the fact that the properties come fully furnished and the utilities are covered by the owners, it is safe to say the company offers good prices for its accommodation. -Also, much effort is put in place to ensure that the houses are in good shape after usage. So the properties can last longer in good shape. -Most of the company's houses are semi-detached and detached houses, which are more peaceful to stay in, as compared to most normal rental buildings which are noisier. -The houses are also pet and children friendly Weaknesses; The weaknesses of Airbnb accommodations also include the following; The properties are unpredictable. You don’t know what you get until you get there. Since the pictures posted online are mainly to make the properties look good and do not include the faults of the properties. -Some of the hosts are unresponsive and do not attend immediately to the needs of the inhabitants.

-Each house has its own rules, some of which are extremely strict -You have to plan and book well ahead of time to get maximum value. -Airbnb properties do not have additional services like spa, gyms, and restaurants which are offered by traditional hotels -Airbnb homes have minimum stays, which are mostly 2 days, so they can't be rented just for a day. Opportunities; -Tap into new markets. Airbnb has many potential new markets to enter, such as Europe, Asia, and South America. Additionally, there’s a largely untapped market for business travelers. Airbnb could also expand its business model to include other properties, such as apartments and condos. -Increase in luxury travelling. While Airbnb has traditionally been focused on budget-friendly rentals, there’s an opportunity for the company to tap into the luxury market. As the sharing economy matures, there’s a growing demand for luxury experiences. If Airbnb can provide high-end rentals that meet this demand, it could generate significant revenue growth..

- The vacation rental market is consolidating, with many prominent players such as Expedia and booking.com acquiring smaller companies. Airbnb could use this trend to its advantage by partnering with or acquiring these larger companies. Such a move would give Airbnb a significant competitive edge in the market. Threats; Airbnb faces increased competition from other vacation rental platforms, such as HomeAway and VRBO. These companies are well-established in the market and have strong brand recognition. They also offer a similar product to Airbnb, making it difficult for Airbnb to differentiate itself Traditional hotels are also a major competitor for Airbnb. Hotels have a significant advantage in terms of brand recognition and marketing budgets. They also offer many amenities that Airbnb cannot match, such as on-site restaurants and concierge services. Governments, guests, hosts, and residents have filed lawsuits against Airbnb. These lawsuits allege various issues, including property damage, noise complaints, and privacy violations. If Airbnb is unsuccessful in defending these lawsuits, it could be forced to change its business model, negatively impacting its bottom line..

Airbnb is still very vulnerable to economic downturns, as people are typically less likely to travel when the economy is weak. An excellent example is the effects of the recent lockdowns, which saw a significant decline in travel and a corresponding decrease in Airbnb’s business. External Environment Analysis PESTLE Analysis Political Factor; The company has recorded no major political issues over the years. It's activities are in line with international regulations on tourism and hospitality, although the company has faced some legal fines in New York, New Orleans and Barcelona for failing to comply with some local tourism laws..

-Economic Factors; Airbnb has grown to be a huge competitor to the traditional hotel systems, now serving over 1.4 billion clients worldwide. The company also offers job opportunities inn more than 100,000 cities worldwide and has greatly contributed to the economies of various countries. -Social Factor; Airbnb is also a social business; visitors document their experiences and share them on social media which allows the company to get more popularity. Also it gives families the ample time and space to connect in peace and feel at home although they might be on a vacation. Technological factors; Airbnb can be considered as a fruit of modern day technology. This is because unlike the days of old where we have to manually search for accommodation. Airbnb is mostly done online; reservation and booking is done online, and also the company uses the review section to monitor the behaviors of the hosts..

Legal Factors; As mentioned in the slides above, Airbnb has faced minor legal charges in the past for refusing to comply with tourism regulations. Therefore, hosts and visitors must agree to the company's terms and conditions which include adhering to taxation and other related legal procedures set by the state. Environmental Factors; Airbnb boasts they reduce energy usage within America and Europe compared to hotels. This includes lowering greenhouse gases, less water consumption, waste avoidance, and increased environmental awareness. Porter's 5 forces Competitive Rivalry; Airbnb is still a baby industry compared to the traditional hotel system which have been around for a longer period and so have already been a part of the people's lifestyle. Also, most hotels use online booking and reservation, have good prices and also offer extra services like restaurants. Thus, more is still to be done by the company in order to win over the hearts of customers, as it is coming up against age old tradition, which still technically has more to offer than the current Airbnb services..

Suppliers; Airbnb's hosts who provide the houses can be termed their suppliers, because they supply the houses that are listed by the company. The company itself has no properties. In this light, it is comfortable to say they have a good supplier power, because they have a constant supply. Their suppliers are also stakeholders to a certain degree. Buyers; Airbnb's buyer power is constant because people travel on daily bases. Thus, except in cases where people have travel restrictions like during the lockdown, the company's buyers are estimated to be constant. Also, people mostly travel during summer (Between May to August), so the company usually receives a high influx of buyers during this period. Threat of Substitution; Airbnb faces stiff competition from the already existing traditional hotel system which is already in the hearts of many travelers, so they face a stiff threat of being substituted. The company has to come up with new strategies in order to tilt the competition to its favor. Or they will have to offer more services to their clients than what the traditional hotel system has to offer..

Threat of new entry; As of now, there is little or threat for new entries. This is because the traditional travel and tourism system has been almost fixed, whereby people travel and either stay with a relative in the destination town or they stay in a hotel. In order for a new company to flourish in this niche, it really has to come up with something really unique. Airbnb's Strategy; Airbnb's strategy has mainly 3 pillars; Live anywhere with Airbnb. Airbnb plans to expand to every city in the world. So far they are doing a great job at this, since they have listings in over 100.000 cities and are expected to have more in the coming years. Better hosting services. The company aims at improving the quality of services from its hosts, reducing some of the extremely strict laws imposed on some properties by its owners. Airbnb to became the ultimate host. The company also has plans to start acquiring properties of its own and maybe in some years to come it will own all the properties listed on the platform..