MBA case study about Airbnb

1. Strategic Plan
Under supervision of
Dr. Ossama Mossallam
24/2/2017

2. Leaders Team
Esraa ElZuhery
(reporter)
Ahmed Khalaf
Mohamed Hossam
Mustafa Gi Ci
Saad Meabed
(facilitator)
Esraa
Mohamed
Saad
Mustafa Ahmed

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. Introduction
About the company and the team
01
Airbnb Strategic Plan

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. 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. Vision
The Dream!
02
Airbnb Strategic Plan

8. THE DREAM!
VISION
8
Making the world
everybody’s home
The developed vision:

9. MISSION
Who we are
03
Airbnb Strategic Plan

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. 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. SWOT Analysis
Where we are
04
Airbnb Strategic Plan

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. 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. 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
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
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
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
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. FS
IS
ES
CA
SPACE MATRIX
Where we are
05
Airbnb Strategic Plan

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. 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. 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. 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
3.6
2.9
Aggressive
WHERE WE ARE
SPACE MATRIX
FS
ES
CA IS
Integration Strategies
Intensive Strategies
Diversification Strategies

26. Industry
Competitors
Rivalry Among
Existing Firms
Suppliers Buyers
Potential
Entrants
Substitutes
GOALS (5 YEARS)
Where we should go
06
Airbnb Strategic Plan

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. Market
Penetration
Diversification
Product
Development
Market
Development
STRATEGIES
How to go there
07
Airbnb Strategic Plan

29. HOW TO GO THERE
STRATEGIES
29
Market
Penetration
Concentric
Diversification
Product
Development
Market
Development
NewExisting
ProductsMarket

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
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
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
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. Industry
Competitors
Rivalry Among
Existing Firms
Suppliers Buyers
Potential
Entrants
Substitutes
OBJECTIVES (2 YEARS)
Where we should go SMARTly
08
Airbnb Strategic Plan

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
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. Industry
Competitors
Rivalry Among
Existing Firms
Suppliers Buyers
Potential
Entrants
Substitutes
CONCLUSION
Let’s wrap it up!
09
Airbnb Strategic Plan

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. THANK YOU!
Any questions?