Analysis of Airbnb's Information Systems and Competitive Advantage

Importance of Information Systems (IS) Tools and Its Impact on Airbnb's Reputation System

Module learning outcomes
1.Identify strategic role of information systems in organizations in order to develop sustainable competitive advantage
2.Demonstrate the strategic use of enterprise applications and analyses its impact on business productivity

Read the case and write a report addressing the given tasks:

Tasks:
Write a report that explores the following tasks:
1.Using your conceptual understanding, critically assess the importance of Information Systems (IS) tools and how it helped Airbnb improve its reputation system.

2.What are the challenges facing the Airbnb Authentication systems and what you suggest Airbnb should do to authenticate guests and hosts?

3.What kind of information Airbnb Hosts should have when deciding whether to accept a guest? Are there any potential discrimination problems of bias that may occur with security checks?

4.Analyze the role of Information System in building and monitoring the communications with the Hosts and Guests and indicate how Hosts benefits from renting through an Airbnb system discussed in the case. It is
recommended to explore the company website and reports, and any other external sources to answer this task

5.Discuss how Information systems can confer a competitive advantage for Airbnb? You are expected to provide examples from the case.

6.How Airbnb link with the ERP systems?

Airbnb (A)
In just four years, Airbnb had become a premier online marketplace where homeowners and would-be bed-and-breakfast owners could turn vacant rooms into nightly rentals. Potential guests could simply log on and search for available rooms, transforming any house into a possible hotel. By July 2011, Airbnb was valued at $1 billion and had rented over 2 million rooms since operations began in 2007. Airbnb created an online reservation system to facilitate transactions, which included a reputation system to build trust and reliability among market participants. In particular, a longstanding review system let renters read about hosts before submitting a reservation request. Similarly, hosts could read about renters before accepting. Most of the resulting reservations proceeded without incident, and in 2011, Airbnb was seeking roughly $100 million in a second round of venture capital.1 But in June 2011, a surge of criticism called into question Airbnb's entire business model. A corporate events planner going by the pseudonym "EJ" had rented her San Francisco apartment to a guest booking via Airbnb.

They had never met but followed the Airbnb protocol and had exchanged several messages through the Airbnb system. The guest seemed perfectly friendly, and during his rental stay, he even sent EJ messages thanking her and complimenting the "little loft area" in her apartment. When EJ returned, she found her home ransacked and her belongings stolen, with damage totaling tens of thousands of dollars. When EJ began blogging about the incident. An early blog entry described some of the irreparable damage. They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother's jewelry I had hidden inside. They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals . . . my entire life. They found my birth certificate and social security card, which I believe they photocopied — using the printer/copier 1 kindly left out for my guests' use. They rifled through all my drawers, wore my shoes and clothes, and left my clothing crumpled up in a pile of wet, mildewing towels on the closet floor. EJ's story spread quickly, accelerated by the attention already resulting from Airbnb's rapid rise. Negative press was featured in the Wall Street Journal, New York Times, San Francisco Chronicle, USA Today, and ABC News, among other media outlets. The situation was made worse when Airbnb was slow to respond. Meanwhile, a second victim came forward saying that his apartment had also been vandalized by an Airbnb renter who "did thousands of dollars of bizarre damage to my rented home and left it littered with meth pipes." By July 2011, the uproar had subsided, and Airbnb proceeded with raising $112 million of venture funding from Andreessen Horowitz, DST Global, and General Catalyst Partners.4 But users were rattled by the experiences of EJ and others, and some critics questioned whether concerns about trust could undermine Airbnb's model. It was clear that Airbnb's online review system was not sufficient to protect users and preserve confidence. Airbnb managers had to do more to regain the trust of market participants especially hosts. But how?