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Latest posts by Prudence K. Magezi(see all)

    Through the years, Airbnb has established itself as one of the most profitable business in the sharing economy alongside Uber through its spearheading efforts in using technology to create an opportunity in the global hospitality business. Boosting over 5 million lodging options in over 81,000 cities and 91 countries globally, the company was estimated to be worth at least $38billion as of 2018. 
    Airbnb has experienced success through the years; however, its future growth is threatened by growing legal issues. The biggest barrier to the company’s growth is restrictions imposed by legislative bodies, municipalities and communities on the use of lodgings for short term rental purposes. 
    Using a PESTLE, the author will examine threats from economic, social, technological, legal and environmental issues while identifying the available growth opportunities in the market.  We will then use SWOT analysis to examine its key strengths and weaknesses and how it can utilize strengths to mitigate inner weaknesses as well as threats. 

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    Airbnb Strategy Case Study


    Key Learning Outcomes

    By the end of the case, students should be able to:
    • Understand the broad global macro-environment of Airbnb and the hospitality/global vacation rental industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
    • Use our swot analysis example to gain an overall understanding of Airbnb's strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the Pestle analysis example on it's business environment.
    • Apply strategy business models and frameworks such as Pestle/Pest/Steeple, Swot etc to real company cases.

     

    1.0 INTRODUCTION


    Founded in 2008, Airbnb is a privately-owned company that operates online market place and hospitality services. With headquarters in Francisco, the company’s accommodation on market place provides access to over 5 million unique places to stay in over 81,000 cities and 91 countries globally (Airbnb press room 2018). 
    The company’s success has mostly been because of its low costs, convenience and ability to expand the capacity of rooms during peak periods among others. As of 2017, Airbnb’s revenue was approximately $2.6billion with $93million in profits, operating income of $450 million and net income of $93 million (Bort 2018).

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