Running head BUSINESS STRATEGY Business Strategy Name

Running head BUSINESS STRATEGY Business Strategy Name


Business Strategy

Name of the Student

Name of the University

Author note

Executive Summary

The assignment helped in the analysis of the business model of Airbnb along with PESTEL analysis which has helped in managing the different kinds of operations in the competitive environment. Furthermore, the success factors have been analyzed and identified which helped in gaining competitive advantage.

Table of Contents

Business Model Canvas of Airbnb

Key Partners

Local photographs

Travel Managers and Travel Partners

Hosts which is inclusive of Events and Rentals


Key Activities

Engage the different participants

Analysis of the data and improve the same effectively

Remove the friction from the different transactions

Value Proposition

For the Guests

Easy way of transactions

Transparent type of ratings

Authentic local kind of experience

Lower Cost

For the Hosts

Generation of Income

Ease of different transactions

Booking and calendar management

Customer Relationships

Own the relationships effectively

The image of the company is the main essential component for the public

For the hosts, this is essential to resolve the issue and guide the different joining steps as well

Customer Segments


Type of the travel





Type of accommodation

Preferences of Rental

Micro segmentation

Key Resources

Brand and the Application of Airbnb

Listings (Zervas, Proserpio & Byers, 2015)

Architecture of the platform


Digital advertisements

Word of Mouth

Social and messaging

Referral Program

Cost Structure

Acquisition Cost of Customers

Weighted average cost of capital

Development and Expansion

Legal and Insurance

Customer Support

Revenue Streams

Charging transaction related savings on:

Rental Guest – 5-15%

Rental Hosts- 3-6%

Event Guests- 0%

Event Hosts- 24%

PESTEL Analysis of Airbnb

Political Factors-Airbnb is one such kind of unique business wherein the people try to offer to rent the homes or apartments to strangers. However, there are various legal issues which can affect the overall growth of the Airbnb services in a negative manner. Therefore, the political factors are the huge weakness for the company (Guttentag, 2015).

Economic Factors-In the shared economy aspect, Airbnb is the leader and this is one of the developing trends in which the different resources are shared between individuals and corporations. The Airbnb tries to offer different kinds of competition to the other competitors and this is opportunity for Airbnb and is benefitting both cities and hosts ("Airbnb-Vacation Rentals, Homes, Experiences & Places", 2018).

Social Factors-Airbnb is the social business and this is creating a positive impact on the business of the company as well. This is one of the opportunities which has been gained by Airbnb as there is socialising and the host tries to socialise and share their ideas as well.

Technological Factors-Airbnb tries to use automation of the technology and this helps them in becoming tech savvy in nature which is one of the opportunities gained by them effectually.

Legal Factors-There are various legal issues which can affect the overall reputation of Airbnb and this has created huge impact on the business in a negative manner.

Environmental Factors-The environmental factors are an opportunity for Airbnb in which this is better than the hotels and there is lowering travelling impact along with usage of the chemical.

Factors Responsible for Successful Execution of Business Model of Airbnb

There are various kinds of factors which is responsible for the successful execution of the business model of Airbnb. Firstly, in the present scenario this can be noticed that the solo travelling has been into trend or fashion and Airbnb is successful in this respective approach as peer to peer accommodation networks such as Airbnb is disrupting and the tourists prefer staying with locals instead of staying in hotels.

Furthermore, there is huge flexibility in Airbnb in which there can be seen that many hotels are strict relating to the check in at 9:00 in morning and there is no such ability to accommodate the wishes. However, on the other Airbnb has huge flexibility as there is no such timing for check in and check out and the cancellation policy of Airbnb is negotiable in nature.


Airbnb-Vacation Rentals, Homes, Experiences & Places. (2018). Retrieved from

Guttentag, D. (2015). Airbnb: disruptive innovation and the rise of an informal tourism accommodation sector. Current issues in Tourism18(12), 1192-1217.

Zervas, G., Proserpio, D., & Byers, J. (2015). A first look at online reputation on Airbnb, where every stay is above average.