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Airbnb Case Study Strategic Management Plan

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MBA case study about Airbnb

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Airbnb Case Study Strategic Management Plan

  1. 1. Strategic Plan Under supervision of Dr. Ossama Mossallam 24/2/2017
  2. 2. Leaders Team Esraa ElZuhery (reporter) Ahmed Khalaf Mohamed Hossam Mustafa Gi Ci Saad Meabed (facilitator) Esraa Mohamed Saad Mustafa Ahmed
  3. 3. 01 – Introduction 02 – Vision 03 – Mission 04 – SWOT 05 – Space Matrix Contents Airbnb Strategic Plan 06 – Goals 07 – Strategies 08 – Objectives 09 – Conclusion
  4. 4. Introduction About the company and the team 01 Airbnb Strategic Plan
  5. 5. ABOUT THE TEAM INTRODUCTION 5 Our team has been assigned to assist Airbnb in developing its strategic plan Several meetings Everybody participated Group dynamics Stick to the case External resources use “ ”- The Leaders Team
  6. 6. ABOUT THE COMPANY INTRODUCTION 6  Founded in 2008  Two-sided platform for short-term lodging (hosts and guests)  Earns from commission from both hosts and guests  One of the highest growing companies in sharing economy from 1K to 1M users in 2 years  A phenomenal disruptive innovation
  7. 7. Vision The Dream! 02 Airbnb Strategic Plan
  8. 8. THE DREAM! VISION 8 Making the world everybody’s home The developed vision:
  9. 9. MISSION Who we are 03 Airbnb Strategic Plan
  10. 10. WHO WE ARE MISSION 10 Airbnb is a trusted community online-marketplace for people to list, discover, and book unique accommodations around the world at any price point. It helps hosts to earn from renting their extra space. The modified mission:
  11. 11. WHO WE ARE MISSION 11 Be a Cereal Entrepreneur Every frame matters • Be bold and apply original thinking • Imagine the ideal outcome • Be resourceful to make the outcome a reality • Look at the end to end experience of everything. Champion the Mission • Prioritize work that advances the mission and positively impacts the community • Build with the long-term in mind • Actively participate in the community and culture • Simplify! Be a Host Embrace the Adventure • Care for others and make them feel like they belong • Encourage others to participate to their fullest • Listen, communicate openly and set clear expectations • Be curious, ask for help, and demonstrate an ability to grow • Own and learn from mistakes • Bring joy and optimism to work Simplify CORE VALUES
  12. 12. SWOT Analysis Where we are 04 Airbnb Strategic Plan
  13. 13. WHERE WE ARE SWOT ANALYSIS 13 1. Lower prices compared to hotels 2. Strong customer service to handle any complaints for customers and to offer help and support 3. Customer-driven development (listening to customers and fulfilling their requests as quick response to customers’ needs and wants) 4. Photography program as development tool to enhance the pictures and properties` photos to attract more customers 5. Adopting working backward strategy to enhance the service features based on the desired optimum experience Positive Negative ExternalInternal Strengths Weaknesses Opportunities
  14. 14. WHERE WE ARE SWOT ANALYSIS 14 6. Offering amazing experiences beyond the traditional accommodation (e.g. hosts steer guests to discover places and make friends) 7. Trust (guests have mutual friends with hosts through social connections + ratings and reviews + photographers verified addresses + moving quickly to address related concerns) 8. Safety ($1M insurance + photographers verified addresses) 9. Highly customized service (guests choose hosts based on their characteristics and preferences) 10. Huge number of connections between members increasing their engagement Positive Negative ExternalInternal Strengths Weaknesses Opportunities
  15. 15. WHERE WE ARE SWOT ANALYSIS 15 11. Offering attractive content (wish lists) which increase engagement 12. Ability to raise fund to be used in operations and developing new markets and services 13. Clear business model (taking commission from both sides) 14. Premium public image and trustable brand 15. Huge number of properties to rent which gives customers the chance to choose their preferred properties from a wider range which makes them satisfied. 16. Large number of users and customers Positive Negative ExternalInternal Strengths Weaknesses Opportunities
  16. 16. 16 Positive Negative ExternalInternal Strengths Weaknesses Opportunities 1. Inappropriate handling of major issues as happened in the case 2. Less effectiveness in countries outside USA and Europe WHERE WE ARE SWOT ANALYSIS
  17. 17. 17 Positive Negative ExternalInternal Strengths Weaknesses Opportunities 1. The declining economy in many countries (people will tend to make money by renting their homes) 2. Investors were never more eager to invest in money making e-projects 3. Huge international accommodation market 4. Higher rates of other accommodation types 5. Growth and development in the mobile market WHERE WE ARE SWOT ANALYSIS
  18. 18. 18 Positive Negative ExternalInternal Strengths Weaknesses Opportunities 1. Negative media propaganda (which happens from time to time) 2. Accommodation service is offered by hosts not by the company itself, issues can arise and the public image can suffer (New York accident) 3. Security and safety breaches especially at the underdeveloped countries. 4. Governmental regulations (legalization, taxes, etc.) 5. Hotels and other providers of accommodations. 6. Comparable rates of hostels and guesthouses. WHERE WE ARE SWOT ANALYSIS
  19. 19. 19 Positive Negative ExternalInternal Strengths Weaknesses Opportunities 7. Couch Surfing offering the same service for free 8. Airbnb causes scarcity of lodging and prices rise, causing anti movements lead by upset community 9. Innovation does not stop, new alternatives may appear 10. The idea of accommodation sharing might not be appealing to some cultures. 11. New entrants (potential competitors) due to ease of business model. WHERE WE ARE SWOT ANALYSIS
  20. 20. FS IS ES CA SPACE MATRIX Where we are 05 Airbnb Strategic Plan
  21. 21. WHERE WE ARE SPACE MATRIX 21 Financial Strength 1. Ease of exit from market (difficult to easy): 6 2. Risk involved in the business (much to little): 4 3. Use of economies of scale and experience (low to high): 6 FS IS ES CA Average = 5.3
  22. 22. WHERE WE ARE SPACE MATRIX 22 Environmental Stability 1. Technological changes: -2 2. Rate of inflation: -2 3. Demand variability: -1 4. Price range of competing products: -2 5. Barriers to entry into market: -4 6. Competitive pressure/rivalry: -2 7. Price elasticity of demand: -4 8. Pressure from substitutes: -2 FS IS ES CA Average = -2.4
  23. 23. WHERE WE ARE SPACE MATRIX 23 Competitive Advantage 1. Market share (small to large): -3 2. Product quality (inferior to superior): -2 3. Product life cycle (late to early): -1 4. Customer loyalty (low to high): -1 5. Technological know-how (low to high): -1 6. Vertical integration (low to high): -1 7. Speed of new product introductions (slow to fast): -1 FS IS ES CA Average = -1.4
  24. 24. WHERE WE ARE SPACE MATRIX 24 Industry Strength 1. Growth potential (low to high): 6 2. Profit potential (low to high): 5 3. Financial stability (low to high): 5 4. Technological know-how (simple to complex): 6 5. Resource utilization (inefficient to efficient): 6 6. Capital intensity (low to high): 6 7. Ease of entry into the market (easy to difficult): 1 FS IS ES CA Average = 5
  25. 25. 25 3.6 2.9 Aggressive WHERE WE ARE SPACE MATRIX FS ES CA IS Integration Strategies Intensive Strategies Diversification Strategies
  26. 26. Industry Competitors Rivalry Among Existing Firms Suppliers Buyers Potential Entrants Substitutes GOALS (5 YEARS) Where we should go 06 Airbnb Strategic Plan
  27. 27. WHERE WE SHOULD GO GOALS 27 Attaining a larger share of the market Maximizing Airbnb’s customers’ savings Increasing the bookings tremendously Having most of the Internet users to join Airbnb Building the largest social community of property owners and renters
  28. 28. Market Penetration Diversification Product Development Market Development STRATEGIES How to go there 07 Airbnb Strategic Plan
  29. 29. HOW TO GO THERE STRATEGIES 29 Market Penetration Concentric Diversification Product Development Market Development NewExisting ProductsMarket
  30. 30. 30 1. Publish positive emotional stories 2. Intensive advertising campaigns in the cities where there are famous events 3. Economy related conferences 4. Sponsor sports events 5. Attract celebrities Market Penetration Concentric Diversification Product Development Market Development HOW TO GO THERE STRATEGIES
  31. 31. 31 Market Penetration Concentric Diversification Product Development Market Development 1. Hire freelancer photographers 2. Enhance the website and apps 3. Integrate Twitter and Instagram 4. Hire psychological experts to study the UX 5. Home security checklist 6. Encourage local communities’ events 7. Improve the service based on the most frequent complaints HOW TO GO THERE STRATEGIES
  32. 32. 32 Market Penetration Concentric Diversification Product Development Market Development Products 1. Expand the operation in the Middle East (turbulent economies, internal use) and the Far East (attractive and trendy) BUT customize the services based on different cultures and traditions needs HOW TO GO THERE STRATEGIES
  33. 33. 33 Market Penetration Concentric Diversification Product Development Market Development 1. Flight booking 2. Pick-up and drop services (uber- like) 3. Two-sided tour guiding HOW TO GO THERE STRATEGIES
  34. 34. Industry Competitors Rivalry Among Existing Firms Suppliers Buyers Potential Entrants Substitutes OBJECTIVES (2 YEARS) Where we should go SMARTly 08 Airbnb Strategic Plan
  35. 35. WHERE WE SHOULD GO SMARTLY OBJECTIVES 35 Increasing the market share of accommodation industry by 1% Increasing the number of users to 185M Having 24 gatherings (with different activities) held by local community in each city Having 50% of the properties matching Airbnb’s security and safety checklist Saving Airbnb’s customers 3% more than the current saving average Increasing bookings by 50%
  36. 36. 36 Developing a tool for analyzing the social media’s reviews and buzz about Airbnb Having 5 celebrities subscribe to Airbnb and offer their castles Developing and publishing 400 emotional stories about the relationships among the community Winning the Stevie Award for the best customer service Establishing a natural disaster recovery department for hosting the evacuated Raising $4b in new funding rounds WHERE WE SHOULD GO SMARTLY OBJECTIVES
  37. 37. Industry Competitors Rivalry Among Existing Firms Suppliers Buyers Potential Entrants Substitutes CONCLUSION Let’s wrap it up! 09 Airbnb Strategic Plan
  38. 38. LET’S WRAP IT UP! CONCLUSION 38 Sharing economy concept (win-win situation ) Fast growth Our team worked hard Our goal is to make Airbnb sustain its leadership and grow more “ ”- The Leaders Team
  39. 39. THANK YOU! Any questions?

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