Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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 ride the second wave of growth? How did they grow from one thousand to one million customers?
Swot Analysis of "Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million Customers case study are - Strategic Management Strategies, Marketing, Strategy, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers casestudy better are - – geopolitical disruptions, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China,
increasing transportation and logistics costs, increasing commodity prices, etc
Introduction to SWOT Analysis of Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million Customers can be done for the following purposes –
1. Strategic planning using facts provided in Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers case study
2. Improving business portfolio management of Sided Etsy
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sided Etsy
Strengths Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sided Etsy in Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers Harvard Business Review case study are -
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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 Strategy & Execution industry. The sustainable margins have also helped Sided Etsy to invest into research and development (R&D) and innovation.
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.
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.
Innovation driven organization
– Sided Etsy is one of the most innovative firm in sector. Manager in Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Sided Etsy are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Sided Etsy is one of the leading recruiters in the industry. Managers in the Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Operational resilience
– The operational resilience strategy in the Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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: Growing from One Thousand to One Million Customers Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Weaknesses Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers are -
Interest costs
– Compare to the competition, Sided Etsy has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers, it seems that the employees of Sided Etsy don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Aligning sales with marketing
– It come across in the case study Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million Customers can leverage the sales team experience to cultivate customer relationships as Sided Etsy is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers HBR case study mentions - Sided Etsy takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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: Growing from One Thousand to One Million Customers should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Sided Etsy needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sided Etsy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million Customers are -
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.
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 Strategy & Execution sector.
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 Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Sided Etsy can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Developing new processes and practices
– Sided Etsy can develop new processes and procedures in Strategy & Execution 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.
Better consumer reach
– The expansion of the 5G network will help Sided Etsy to increase its market reach. Sided Etsy will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
Leveraging digital technologies
– Sided Etsy can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Building a culture of innovation
– managers at Sided Etsy can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sided Etsy to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Sided Etsy to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sided Etsy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million Customers are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sided Etsy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Sided Etsy needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Strategy & Execution industry. The Strategy & Execution 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.
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 Strategy & Execution sector and impact the bottomline of the organization.
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 Strategy & Execution industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Strategy & Execution 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.
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: Growing from One Thousand to One Million Customers .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Sided Etsy will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Airbnb, Etsy, Uber: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million 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: Growing from One Thousand to One Million 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.
