The Airbnb Business Travel Vertical in Asia: The Way Forward SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Airbnb Business Travel Vertical in Asia: The Way Forward
In March 2017, Airbnb needed to make some important decisions regarding its strategy for the Airbnb Business Travel Vertical (ABTV) in Asia. Despite a short history of less than three years since the formal announcement of its launch, the ABTV had exhibited promising performance. The business travel market offered many attractive characteristics, including its large size. Despite the attractiveness of the business travel segment, two issues related to the choice of countries and the choice of segments were of concern. Another key issue related to identifying the specific corporate clients to approach-whether to leverage existing relationships with multinational customers or to approach Asian corporate clients directly. The authors Nitin Pangarkar and Yuan Kay Chung are affiliated with National University of Singapore.
Swot Analysis of "The Airbnb Business Travel Vertical in Asia: The Way Forward" written by Nitin Pangarkar, Yuan Kay Chung includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Airbnb Travel facing as an external strategic factors. Some of the topics covered in The Airbnb Business Travel Vertical in Asia: The Way Forward case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Airbnb Business Travel Vertical in Asia: The Way Forward casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, geopolitical disruptions, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation,
there is backlash against globalization, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of The Airbnb Business Travel Vertical in Asia: The Way Forward
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Airbnb Business Travel Vertical in Asia: The Way Forward case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Airbnb Travel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Airbnb Travel 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 The Airbnb Business Travel Vertical in Asia: The Way Forward can be done for the following purposes –
1. Strategic planning using facts provided in The Airbnb Business Travel Vertical in Asia: The Way Forward case study
2. Improving business portfolio management of Airbnb Travel
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 Airbnb Travel
Strengths The Airbnb Business Travel Vertical in Asia: The Way Forward | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Airbnb Travel in The Airbnb Business Travel Vertical in Asia: The Way Forward Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– The Airbnb Business Travel Vertical in Asia: The Way Forward firm has clearly differentiated products in the market place. This has enabled Airbnb Travel to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Airbnb Travel to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Airbnb Travel has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Airbnb Business Travel Vertical in Asia: The Way Forward HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Airbnb Travel is one of the leading recruiters in the industry. Managers in the The Airbnb Business Travel Vertical in Asia: The Way Forward are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Airbnb Travel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Airbnb Travel is one of the most innovative firm in sector. Manager in The Airbnb Business Travel Vertical in Asia: The Way Forward Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Airbnb Travel 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 Airbnb Travel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Airbnb Business Travel Vertical in Asia: The Way Forward Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Airbnb Travel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Airbnb Travel 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.
Strong track record of project management
– Airbnb Travel 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 Airbnb Travel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Airbnb Travel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the The Airbnb Business Travel Vertical in Asia: The Way Forward 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.
Analytics focus
– Airbnb Travel 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 Nitin Pangarkar, Yuan Kay Chung 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.
Effective Research and Development (R&D)
– Airbnb Travel 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 The Airbnb Business Travel Vertical in Asia: The Way Forward - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses The Airbnb Business Travel Vertical in Asia: The Way Forward | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Airbnb Business Travel Vertical in Asia: The Way Forward are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Airbnb Business Travel Vertical in Asia: The Way Forward HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Airbnb Travel has relatively successful track record of launching new products.
Need for greater diversity
– Airbnb Travel 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Nitin Pangarkar, Yuan Kay Chung suggests that, Airbnb Travel 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Airbnb Travel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Airbnb Business Travel Vertical in Asia: The Way Forward can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Airbnb Travel has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– It come across in the case study The Airbnb Business Travel Vertical in Asia: The Way Forward 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 The Airbnb Business Travel Vertical in Asia: The Way Forward can leverage the sales team experience to cultivate customer relationships as Airbnb Travel is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Airbnb Business Travel Vertical in Asia: The Way Forward, in the dynamic environment Airbnb Travel has struggled to respond to the nimble upstart competition. Airbnb Travel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study The Airbnb Business Travel Vertical in Asia: The Way Forward, 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.
Low market penetration in new markets
– Outside its home market of Airbnb Travel, firm in the HBR case study The Airbnb Business Travel Vertical in Asia: The Way Forward needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Airbnb Travel 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.
Slow decision making process
– As mentioned earlier in the report, Airbnb Travel 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. Airbnb Travel 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.
Opportunities The Airbnb Business Travel Vertical in Asia: The Way Forward | 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 The Airbnb Business Travel Vertical in Asia: The Way Forward are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Airbnb Travel 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.
Creating value in data economy
– The success of analytics program of Airbnb Travel has opened avenues for new revenue streams for the organization in the industry. This can help Airbnb Travel to build a more holistic ecosystem as suggested in the The Airbnb Business Travel Vertical in Asia: The Way Forward case study. Airbnb Travel can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Airbnb Travel can use these opportunities to build new business models that can help the communities that Airbnb Travel operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Airbnb Travel 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.
Better consumer reach
– The expansion of the 5G network will help Airbnb Travel to increase its market reach. Airbnb Travel 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Airbnb Travel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Airbnb Travel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Airbnb Travel in the consumer business. Now Airbnb Travel can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Airbnb Travel 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Airbnb Travel is facing challenges because of the dominance of functional experts in the organization. The Airbnb Business Travel Vertical in Asia: The Way Forward case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Airbnb Travel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Airbnb Travel 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Airbnb Travel can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Airbnb Travel can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats The Airbnb Business Travel Vertical in Asia: The Way Forward External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Airbnb Business Travel Vertical in Asia: The Way Forward are -
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. Airbnb Travel 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.
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 Airbnb Travel.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Airbnb Business Travel Vertical in Asia: The Way Forward, Airbnb Travel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology acceleration in Forth Industrial Revolution
– Airbnb Travel has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Airbnb Travel needs to keep up with the evolution of technology in the Strategy & Execution 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Airbnb Travel 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 The Airbnb Business Travel Vertical in Asia: The Way Forward .
Stagnating economy with rate increase
– Airbnb Travel 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.
Regulatory challenges
– Airbnb Travel 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.
Environmental challenges
– Airbnb Travel 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. Airbnb Travel can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Airbnb Travel
– 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 Airbnb Travel.
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 Airbnb Travel 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Airbnb Travel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Airbnb Travel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of The Airbnb Business Travel Vertical in Asia: The Way Forward 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 The Airbnb Business Travel Vertical in Asia: The Way Forward 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 The Airbnb Business Travel Vertical in Asia: The Way Forward 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 The Airbnb Business Travel Vertical in Asia: The Way Forward 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 The Airbnb Business Travel Vertical in Asia: The Way Forward 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 Airbnb Travel needs to make to build a sustainable competitive advantage.