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Questions for Case CH 2 Airbnb

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Questions for Case CH 2 Airbnb
Anna Martynova
Instructions: Expand the tables so you have enough space for a complete answer… bullet
points are fine.
1. Using the example chart in the textbook for business models, illustrate and compare the
value proposition for Airbnb, large hotel chains such as Marriot and Hilton and bed &
breakfasts.
Large Hotels
Bed & Breakfasts
(Pensionen)
Affordable
accommodation
Customer
Value
Proposition
Extensive amount of
value added services
Profit
Formula
Revenues (hotel+spa,
restaurant, etc.)-costs
of running the
facilities
Revenues(hotel rooms)costs of running the
facility
Profit
Margin
High
Medium
Airbnb
Extensive variety of
accommodation
options with direct
host contact
Service fees-costs of
running a platform
Highest
2. Compare and contrast the general strengths and weaknesses of large, hotel chains such
as Marriot and Hilton, bed & breakfasts, and Airbnb.
Large Hotels
Strengths
Variety of value-added
services
Safe and supervised
Large number of rooms
Weaknesses High prices can scare people
Hard to be flexible with
properties
Bed & Breakfasts
(Pensionen)
Personalized
atmosphere
Cheaper than large
hotels
Airbnb
Limited number of
rooms
High work load for
little staff
Regulations
Imitators
Inconsistency
among hosts
String brand image
No ownership
Competitive prices
3. How has the consumer changed and how does Airbnb’s customer value-proposition meet
this change?
When staying in a hotel turns out to be way too expensive and living in a hostel with other
100 people in a room doesn’t sound pleasant, the third option-Airbnb comes. The fact that a
traveler can look at many options and find accommodations which suits him better either it
is a bohemian or modern apartment is fascinating. Consumers have started to value direct
and easy contact even more in the last years. This is when Airbnb stepped in and offered
something that people have been waiting for.
4. What key factors may determine the success of Airbnb?
Airbnb was able to win trust with its reviews and feedback systems, gain loyalty with
rewards, and increase the user base with referential programs.
Also, the sharing economy is one of the keys. They don’t own any actual property and can
therefore be flexible. They provide variety of accommodation options at competitive prices.
Airbnb is digital and this is the best place where to reach more users.
5. What recommendations would you make to Airbnb to improve its competitiveness in
accommodation market while mitigating any current and future risks?
My suggestion would be to work with hosts more to make sure there are no
accommodations options with too many negative reviews as it might be spoiling the brand’s
image. Also securing the travelers and imposing stricter rules for conduct.
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