Running head BUSINESS STRATEGY Business Strategy Name

Running head BUSINESS STRATEGY Business Strategy Name

Running head: BUSINESS STRATEGY

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


Insurance

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


Guests


Type of the travel


Geographic


Behavioral


Demographic


Hosts


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

Channels


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.


References

Airbnb-Vacation Rentals, Homes, Experiences & Places. (2018). Retrieved from https://www.airbnb.com/

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.