BE284 Strategic Management Assignment Sample
• You are expected to write an essay of no more than 2,000 words (max. 2,200; minimum 1,800words).
• Please state the number of words in your assignment on the cover sheet/first page of your assignment.
• Please use 12-point font and 1.5 line spacing in your assignment.
• Note that late submissions will not be accepted unless full details of extenuating circumstances are provided. If you have any query about extenuation, please contact Academic Services (Gateway Building, 3rd floor); firstname.lastname@example.org.
• Submission of individual essay Week 30 (of University calendar - Monday 25 April
BE284 Essay Question:
Using appropriate concepts and theories, analyse and evaluate Airbnb strategy to change its business model and become an empire in the hotel industry. Use the case study ‘The rise of a unicorn: Airbnb’ to answer the following questions:
1. Carry out a PESTEL analysis and five competitive forces analysis of Airbnb and identify the opportunities and threats.
2. Based on the data from the case (and any other sources available) and by deploying VIRO framework and Porter Value Chain model analyse resources and capabilities and identify the strengths and weaknesses of Airbnb.
3. Develop a SWOT analysis and suggest 3 corporate strategies that Airbnb can pursue for the next 5 years to Airbnb.
4. Discuss how your suggested strategies, regarding to Airbnb’s culture and history, can help Airbnb to achieve differentiation, or cost leadership strategies in the next 5 years.
• You may use material from outside the case if you wish to.
• Please cite any material that you use in your essay, using the Harvard referencing style.
Notes: Writing an essay for assignment help
• The introduction to your essay should provide a summary of your arguments that you use to answer the question. It should also set out in broad terms the structure of your essay.
• The main section of your assignment should provide the detailed arguments that answer the question. You should use appropriate evidence to support your arguments and you should make your interpretation of that data as clear as possible. You should not leave the interpretation of the data that you use to the reader.
• Do not be descriptive.
• Whenever you include some text in an assignment, you are, in effect, saying ‘this is important’. Always, therefore, ask yourself ‘why does the reader need to know this?’ Make the relevance of that material as clear as you possibly can.
1. Describe the key questions and associated challenges to be addressed in formulating an organisation’s competitive and corporate-level strategies
2. Appreciate that to sustain competitive advantage an organisation must harness its internal resources and capabilities and react appropriately to changes in its external environment
3. Critically apply a range of tools and techniques to illuminate the key questions of competitive strategy and corporate strategy
The purpose of the study is to explore the transformation of the Airbnb business to complete and comprehensive hospitality industry. The purpose of Airbnb is to improve the quality and efficiency of the organization within the context of the work. The organization allows the property holders to register their property for rental purposes and cookie-cutter hotel rooms. The study is to explore the comprehensive analysis of the company with their surrounding environment. The strategy of the company is to be analyzed in the light of the external and internal environment considering its uniqueness and efficiency within the context of the workplace. The paper is to further analyze the leadership strategy utilized by the company in managing its resources.
2. PESTEL analysis
The pestel analysis provides a comprehensive knowledge of the different environment within the context of the workplace. The external environment of the organization is analyzed effectively.
Table 1: PESTEL analysis
Porter’s Five Forces
Porter’s five forces analyze the strength and challenges of the external environment where the company is moving.
There is significant competition as the major players such as Tripadvisors, Booking.com and HomeToGo. The competition is found to be high.
Power of the suppliers
The hosts are the suppliers as they are responsible for managing the effectiveness and efficiency within the organizational context. The power of suppliers is high as the service quality depends on the host efficiency.
Threat of Substitute
The threat of a similar product is high as there are several organizations engaged in managing the property in a significant and effective way(Biberet al., 2017).
Customer bargaining power
The bargaining power of the customer is high as they may easily switch to another organization without many experiences (Muller, 2020).
The threat of the new entrants
The new entrants could hardly make similar kinds of market share and property registration. The new entrant threat is low within the context of the workplace.
The company has the expansion opportunity. The company may also improve its network. Theconstant innovation and network expansion of the company will allow achievingcompetitiveadvantage. These are the potential opportunities that the company will gain.
3. VRIO framework and Porter Value Chain model
3.1 VRIO model
Table 2: Value Chain analysis
The organization is found to have focused more on the effectiveness and efficiency in managing the unique experiences it offers to the customer. The organization provides affordable accommodation to the consumer and improves their living experiences in a significant and effective way (Reinhold and Dolnicar, 2018). Customer finds the proper value in their money when they are interacting with the organization. Airbnb creates value for the customer and improves their effectiveness and efficiency within the context of the workplace. The customers are made partners and develop a significant relationship between the guest as well as the hosts.
3.2 Porter value chain model
The primary activities of the organization in the value chain analysis consist of inbound logistic operation of one logistic marketing and sales and service.
Figure 1: Porter value chain model
(Source: Simatupang, Piboonrungroj& Williams, 2017)
Inbound logistics of the organization is more concerned with the toad services. The inbound logistics of the organization does not require the extra cost of transportation. The global hospitality service brokerage company utilizes physical resources and incorporates mugs, pillows and other items from regular use. Airbnb Corporation is associated with the transformation of raw materials.
Service is the primary activity of the organization and managers that dream the world regularly. The company develops its support activities and proper management. It has incorporated a large number of properties as a part of the organization by allowing the property to register property on the website (Reinhold and Dolnicar, 2018).
Strength and weaknesses
The company has enough resources and opportunity to expand its operation. These are the potential strength of the organization. It will enable the organization to enhance its effectiveness and efficiency within the organizational context.
The company’s business model is conveniently imitable and it may affect the environment and erase its profitability within the highly competitive market situation.
4. SWOT analysis and suggest 3 corporate strategies
The company is a lodging company and has a presence in 192 countries. It is a well-established brand and continues to focus on product expansion outside of its core business activity.
The company explores the opportunity for cheaper alternatives to hotels with global recognition. The company has a strong social media presence. It also provides good customer service in the context of the workplace.
The company has been facing significant issues as a result of law and regulation violations. The computer may easily be the business system (Muller, 2020). The company has higher prices in some of the localities and it affects the efficiency of the business model. The review system of the organization is found to be highly ineffective.
The company has encouraged the use of mobile phones for booking and reservation and therefore it has developed a mobile application. An alternative model is a new concept and it has a significant opportunity to grow and develop. The incorporation of the dead asset has a deep impact on the organization.
The company is found to have faced a large number of cases in 192 countries. The changes in the regulation of the country affect its ability to operate. The company has already faced a large number of places in different parts of the globe. The rising competition has a potential impact on the organization.
4.1 Corporate strategy of Airbnb
Simplication of the customer journey with mobile applciation
The potential marketing activity of the organization plays a significant and crucial role in managing the operation and improving the quality of life. The launching the application will simply the customer journey in booking and reservation within the context of the workplace. The mobile application implementation will enhance its effectiveness and efficiency. The marketing activity using social media will enhance the capability and efficiency of the organization (Alhava, Laine and Kiviniemi, 2017).
Finding alternative funding for network expansion
The company may use crownd funding and sales of its equity for improvinf the business operation and business expansion. The organization must expand its network and operation to manage and explore the positive business strategy. The company is found to have incorporated a large number of organizations in managing its business success. Business expansion is essential for the organization and it is necessary to incorporate a large number of hosts to manage time and effectively overcome the barriers (Reinhold andDolnicar, 2018).
Adding remittance fee
The company needs to add fee in order to manage the better and effective increase in the margin. The simplification of the customerjourney is required to help its effectiveness. The effective and efficient management of resources is managed significantly within the context of the workplace. The simplification of the guest journey will improve the customer experiences with the world-class services offered by the organization.
5. Suggested strategies
The effective management of resources will help to manage and explore the organization of significant and effective (Reinhold and Dolnicar, 2018). Effective management of innovation of the mobile innovation will improve its market expansion making it easy for the host and customer to register their property and leadership approach within the context of the organization.
The company will manage its operation for the next 5 years using its potential techniques and innovations that will continue to expand its operation and enhance customer satisfaction (Muller, 2020). The company will obtain funding from crowdfunong and ales of the company equity. Theimprovement in the company requires better funding opportunity. The bank loan may affect the organization. It requires interest free funding option.
The expansion of the network of the organization by incorporating a large number of properties and hosts can be achieved with proper and effective social media marketing. A large number of hosts with a large number of properties will be attracted by the premium services offered to the organization. The use of social media marketing will allow the organization to reach within the context of the workplace (Alrawadiehet al., 2020). Network expansion will be improved its effectiveness and efficiency differentiating the company from the existing market leaders within the context of the workplace.
The simplification of the customer journey in the context of reservation booking and reaching the places will improve the consumer attraction towards but wrong. It can be done using the mobile application and further network expansion. The simplified process could be achieved with the use of technology and the organization will achieve technological efficiency within the context of the workplace (Alrawadieh et al., 2020).
5.2 Airbnb’s culture and history
The strategies of the company that have been suggested are concerned with the differentiation and cost leadership approach. The company has achieved a successful journey from a mattress company to a 31 billion company (Alhava, Laine and Kiviniemi, 2017). The effective management of resources is largely dependent on the efficiency of the culture and history. The company is found to have developed a unique business model that allows the stranger to sleep in another house and it has turned out to be a 31 billion company.
5.3 Differentiation, or cost leadership strategies
The company is found to have focused more on its differentiation strategy with the use of a unique business model that makes it different from other organizations and from another competitor as it focuses on allowing the changes in the stranger’s house and making it happen to earn a lot of money (Muller, 2020). The constant innovation of GPS tracking systems and improvement of the training helps to enhance a better and more effective outcome.
It can be said that an effective and efficient approach towards the management of resources and capability will help to improve effectiveness and efficiency within the context of the workplace. The development of the company is largely dependent on effective use of resources and capability and proper management of the resources. The newly added policy of the organization will be executed to ensure long term development of the organization.
Alhava, O., Laine, E. and Kiviniemi, A., 2017. The construction industry needs an AirBnb of its own!. WELCOME TO DELEGATES IRC 2017, p.566.https://repository.vtc.edu.hk/cgi/viewcontent.cgi?article=1242&context=thei-fac-de-sp#page=569
Alrawadieh, Z., Guttentag, D., Cifci, M.A. and Cetin, G., 2020. Budget and mid-range hotel managers' perceptions of and responses to Airbnb: evidence from Istanbul. International Journal of Contemporary Hospitality Management.https://www.emerald.com/insight/content/doi/10.1108/IJCHM-01-2019-0015/full/html
Aznar, J., Maspera, J. and Quer, X., 2019.A Game Theory approach to Airbnb and hotels competition. European Journal of Tourism Research, 21(21), pp.119-123.https://www.tandfonline.com/doi/abs/10.1080/10548408.2017.1308292
Biber, E., Light, S.E., Ruhl, J.B. and Salzman, J., 2017. Regulating business innovation as policy disruption: From the Model T to Airbnb. Vand. L. Rev., 70, p.1561.https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/vanlr70§ion=40
Farronato, C. and Fradkin, A., 2018. The welfare effects of peer entry in the accommodation market: The case of Airbnb (No. w24361). National Bureau of Economic Research.https://www.nber.org/papers/w24361
Muller, E., 2020. Delimiting disruption: Why Uber is disruptive, but Airbnb is not. International Journal of Research in Marketing, 37(1), pp.43-55.https://www.sciencedirect.com/science/article/pii/S0167811619300679
Reinhold, S. and Dolnicar, S., 2018.Airbnb’s business model. Peer-to-peer accommodation networks, p.27.https://library.oapen.org/bitstream/handle/20.500.12657/30986/640674.pdf?sequence=1#page=38
Reinhold, S. and Dolnicar, S., 2018. How Airbnb creates value. Peer-to-Peer Accommodation Networks; Dolnicar, S., Ed, pp.39-53.https://library.oapen.org/bitstream/handle/20.500.12657/30986/640674.pdf?sequence=1#page=50
Simatupang, T. M., Piboonrungroj, P., & Williams, S. J. (2017).The emergence of value chain thinking. International Journal of value chain management, 8(1), 40-57.https://www.inderscienceonline.com/doi/abs/10.1504/IJVCM.2017.082685
Ye, P., Qian, J., Chen, J., Wu, C.H., Zhou, Y., De Mars, S., Yang, F. and Zhang, L., 2018, July.Customized regression model for Airbnb dynamic pricing.In Proceedings of the 24th ACM SIGKDD international conference on knowledge discovery & data mining (pp. 932-940).https://dl.acm.org/doi/abs/10.1145/3219819.3219830