Airbnb, Etsy, Uber: Acquiring the First Thousand Customers SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Airbnb, Etsy, Uber: Acquiring the First Thousand Customers
By 2016, two-sided online platforms (or marketplaces) were pervasive among the highest growing internet startups around. These marketplaces sought to match suppliers of assets for rent, physical products or services with customers demanding them. Among the most notable two-sided platforms in terms of their tremendous early growth were Airbnb, Etsy and Uber. They offered short-term property rentals, handcrafted goods, and car rides, respectively. As two-sided markets grew to scale, network effects kicked in as more consumers bred more suppliers and vice versa. But how did these platforms acquire their first customers, at the time when they had so few providers? How exactly did they go about acquiring their first thousand customers?
Swot Analysis of "Airbnb, Etsy, Uber: Acquiring the First Thousand Customers" written by Thales S. Teixeira, Morgan Brown includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sided Etsy facing as an external strategic factors. Some of the topics covered in Airbnb, Etsy, Uber: Acquiring the First Thousand Customers case study are - Strategic Management Strategies, IT, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Airbnb, Etsy, Uber: Acquiring the First Thousand Customers casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
increasing energy prices, increasing commodity prices, etc
Introduction to SWOT Analysis of Airbnb, Etsy, Uber: Acquiring the First Thousand Customers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Airbnb, Etsy, Uber: Acquiring the First Thousand Customers case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sided Etsy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sided Etsy operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Airbnb, Etsy, Uber: Acquiring the First Thousand Customers can be done for the following purposes –
1. Strategic planning using facts provided in Airbnb, Etsy, Uber: Acquiring the First Thousand Customers case study
2. Improving business portfolio management of Sided Etsy
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sided Etsy
Strengths Airbnb, Etsy, Uber: Acquiring the First Thousand Customers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sided Etsy in Airbnb, Etsy, Uber: Acquiring the First Thousand Customers Harvard Business Review case study are -
Strong track record of project management
– Sided Etsy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Sided Etsy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sided Etsy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Sided Etsy is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Sided Etsy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Airbnb, Etsy, Uber: Acquiring the First Thousand Customers Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Sided Etsy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Sided Etsy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sided Etsy has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Effective Research and Development (R&D)
– Sided Etsy has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Sided Etsy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sided Etsy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Sales & Marketing industry
– Airbnb, Etsy, Uber: Acquiring the First Thousand Customers firm has clearly differentiated products in the market place. This has enabled Sided Etsy to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Sided Etsy to invest into research and development (R&D) and innovation.
Ability to lead change in Sales & Marketing field
– Sided Etsy is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Sided Etsy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Sided Etsy in the sector have low bargaining power. Airbnb, Etsy, Uber: Acquiring the First Thousand Customers has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sided Etsy to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Sided Etsy is one of the most innovative firm in sector. Manager in Airbnb, Etsy, Uber: Acquiring the First Thousand Customers Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Sided Etsy is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Thales S. Teixeira, Morgan Brown can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Airbnb, Etsy, Uber: Acquiring the First Thousand Customers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Airbnb, Etsy, Uber: Acquiring the First Thousand Customers are -
Aligning sales with marketing
– It come across in the case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Airbnb, Etsy, Uber: Acquiring the First Thousand Customers can leverage the sales team experience to cultivate customer relationships as Sided Etsy is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sided Etsy 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Sided Etsy is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Sided Etsy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sided Etsy to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Sided Etsy, firm in the HBR case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Sided Etsy has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Sided Etsy even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Sided Etsy has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Airbnb, Etsy, Uber: Acquiring the First Thousand Customers should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Sided Etsy has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Thales S. Teixeira, Morgan Brown suggests that, Sided Etsy is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Sided Etsy products
– To increase the profitability and margins on the products, Sided Etsy needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Sided Etsy has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Skills based hiring
– The stress on hiring functional specialists at Sided Etsy has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Airbnb, Etsy, Uber: Acquiring the First Thousand Customers | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers are -
Creating value in data economy
– The success of analytics program of Sided Etsy has opened avenues for new revenue streams for the organization in the industry. This can help Sided Etsy to build a more holistic ecosystem as suggested in the Airbnb, Etsy, Uber: Acquiring the First Thousand Customers case study. Sided Etsy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sided Etsy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Sided Etsy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Sided Etsy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Airbnb, Etsy, Uber: Acquiring the First Thousand Customers suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sided Etsy can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Airbnb, Etsy, Uber: Acquiring the First Thousand Customers, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sided Etsy can use these opportunities to build new business models that can help the communities that Sided Etsy operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Sided Etsy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Sided Etsy has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sided Etsy can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Sided Etsy can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sided Etsy in the consumer business. Now Sided Etsy can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Sided Etsy can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Sided Etsy to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Airbnb, Etsy, Uber: Acquiring the First Thousand Customers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers are -
Technology acceleration in Forth Industrial Revolution
– Sided Etsy has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Sided Etsy needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Sided Etsy in the Sales & Marketing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Sided Etsy demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sided Etsy in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Sided Etsy
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Sided Etsy.
Stagnating economy with rate increase
– Sided Etsy can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sided Etsy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers, Sided Etsy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Environmental challenges
– Sided Etsy needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Sided Etsy can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sided Etsy can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Sided Etsy needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Sided Etsy is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Sided Etsy.
Weighted SWOT Analysis of Airbnb, Etsy, Uber: Acquiring the First Thousand Customers Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Airbnb, Etsy, Uber: Acquiring the First Thousand Customers is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Airbnb, Etsy, Uber: Acquiring the First Thousand Customers is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Sided Etsy needs to make to build a sustainable competitive advantage.