Airbnb Case Study Solved-The Rise Of A Unicorn
Question 1
Sticking to the 35-word limit suggested by Collis and Rukstad in Section“1.2.3, what strategy statement would you propose for Airbnb?
The strategic statement would be “Our goal is to provide a sense of belonging, and to deliver and guide our customer to local experiences. Because it is not just about where you stay, its about what you do whilst you are there.”
Question 2
Carry out a ‘three-horizons’ analysis (Section“1.2.1) of Airbnb, in terms of both existing activities and possible future ones. How might this analysis affect its future strategic direction?
Horizon 1
Airbnb is providing an online marketplace for property owners to provide in-house guest experiences for a specific time on their private house / apartment almost operating like a hotel service, but with a home-feel experience creating an engagement community in a peer to peer network. (Ting, 2018)
Horizon 2
Airbnb most valuable asset is its top rated hosts where they have introduced ‘Airbnbplus’ and ‘Superhosts’ for providing exceptional experiences for their guests. They are creating compelling experiences like a ‘local’ through a collaborative sense of community by integrating with other apps like Easy cars and Girl meet dress and also partnering with local neighborhoods like cafes , lounges to provide free Wi-Fi services along with connecting guests with the locals to answer their questions on the area.
Horizon 3
Airbnb is planning for a rebranding strategy from a renting property space at affordable price to a lifestyle brand where the community connects with a sense of belonging to the brand. They have also planned to enter in the airline industry as their bigger objective. (Curry, 2021)
Question 3
Using the headings of environment, strategic capability, strategic purpose and culture seen in section“1.3.1, identify key positioning issues for Airbnb and consider their relative importance?
Environment
Airbnb has been facing stringent regulatory actions from various cities due to unlicensed property advertisements in Spain, tourist disturbing the customs in a conservative country like Japan, illegal subletting, tax issues, health and safety issues and no short term rentals less than 30 days like in New York City.
Strategic Capability
Airbnb has created its business model on a shared network between the host and guest disrupting the hotel industry through its competitive pricing and easy accessibility all around the world and giving economic benefits to the host. This has given competitive advantage to Airbnb and created a community network of 5.3 million listing in 81,000 cities.
Strategic Purpose
Through a sense of community and belongingness, they aim to create a lifestyle brand by creating a relationship of personal engagement with the brand.
Culture
The leadership of Airbnb has given prime importance by nourishing the culture through openness and dialogue by introducing the notion of ‘elephants, dead fish and vomit’. This has created a more collaborative tone as employees could speak up and share their ideas under people-centric leadership, and by also having annual employees meetings, conferences and birth celebrations and discussing the future strategies in a ‘come alive’ atmosphere.
Question 4
Following on from the previous questions and making use of Section“1.3.2, what alternative strategies do you see for Airbnb?
Segment Targeting
Although Airbnb is using a multi-segment positioning strategy focusing on variety of customer segments, it has been has been difficult for Airbnb to attract the baby boomers segments of travelers which accounts for only 5% as their business users. Airbnb should have more multi-generational segment targeting to enhance its community collaboration and brand advocacy. (Lock, 2019)
Enhanced Digital Strategy
Airbnb should adopt a diverse digital presence and communication on all social platforms with an integrated customer service support through all social media channels like Instagram stories , tweets , snaps, messenger chats, 24/7 service and emergency support.
Question 5
Converting good strategic thinking into action can be a challenge: examine how Airbnb has achieved this by considering the elements seen in Section“1.3.3?
When evaluating their existing strategies Airbnb were aware of competitors in the market like Homeaway.com, Craigslist, VRBO.com and their strategic aim was to become the top brand in the consumer’s mind through its brand positioning, and creating through its value propositions of affordability and a more human and culture experience for its hosts.
They aimed to create a community of loyal users through emotional connection of selling experiences instead of products in a very personalized manner exceeding the user expectations at all the touch points.
A key focus was to look more deliberately at their company culture and core values, as the company grew it was a priority not to loose this ethos.
Strategy development processes were put in place , called “Ground Control” engaging with and giving a voice to every member of staff in every office around the world. Lighter touch staff engagement, birthdays and personal celebrations were dedicated to keep the company culture alive.
The investment in recruitment and engagement of staff with the same company core values who had an understanding of the mission of Airbnb, fully complemented the “everyone is part of the development and success of the company” ethos.
Formal planning regarding the development of the organization tended to take the form or an expansion of the leadership teams ad-hoc ideas and decisions as stated by Airbnb CEO Brian Chesky “some of the best ideas I’ve had at Airbnb where just shooting shit, just talking. And we weren’t trying to come up with an idea, in conversation something spontaneous happened” (UKFD.com 2021).
Successful implementation was rolled out through clear company messaging, regular engagement, an understanding of the mission and what defines Airbnb. This strong leadership messaging linked the core values of the business, a sense of home and of belonging to the whole of the organization.
References:
Chesky,B.(2021) “Leading in a crisis.” Financial Times, (online) https://www.ft.com/content/d42ae8b5-4723-4327-8dd9-13d4b699dbd9 (Links to an external site.) (accessed: 18/05/2021)
Lock, S., 2019. Airbnb users by age US/Europe 2017 | Statista. [online] Statista. Available at: <https://www.statista.com/statistics/796646/airbnb-users-by-age-us-europe/#:~:text=In%202017%2C%20the%20majority%20of,more%20popular%20among%20younger%20users.> [Accessed 17 May 2021].
