Analyzing Airbnb’s Business Model through Various Frameworks

Reviewing Airbnb’s business model using the Business Model Canvas

References

Fewkes, A. (2022, January 12). How Airbnb's exponential business model works. Retrieved from BMI: https://www.businessmodelsinc.com/exponential-business-model/airbnb/

Kist, W. (2017, June 29). How Airbnb Works | Insights into Business & Revenue Model. Retrieved from Jungle Works: https://jungleworks.com/airbnb-business-model-revenue-insights/

1) What are the design elements in Airbnb’s business model?

a) Content – what activities are performed in the business model?

The several activates performed by the business model of Airbnb includes:

1. Platform development

2. Nature and outdoor: Outdoor 5-star experience

3. Sales and marketing

4. Listing and renting the local homes

5. A new way to travel from home

6. Protect sensitive information

7. Maintain customer services

These activities are linked and sequenced through authentic and local travel experiences, and millennials. The strategy which relies on user generated content and listing from its host and most important they rely and linked on trust.  

- Hosts: It indicates the people who keeps the property good and generate profit by renting their available space of their property. On the platform of Airbnb hosts can generate a list for their property and can add the specific details of the stuff. Hosts can set their charges as rent, and the time of check-out and check-in on their own.

- Travellers: It indicates the people who books and listed the available space from different local hosts, they have the choice to search for the property by filtering them according to amenities, location and charges(Zott & Amit, 2010).

- Freelance Photographers: Airbnb has a larger system for the freelancing professional photographer in all over the countries. The HD photographs get more responses and they get paid directly by the platform of Airbnb. 

According to the framework of Amit and Zott, the digitalization of ever more aspects of consumers or customers represents the innovation. Airbnb incorporates the modern technology using the internets on its daily basis. It charges less prices than any other rentals hotels and provide better experiences with amenities which makes it as an innovative business.    

Design Themes includes:

1. Novelty: It captures the degree of the innovation model of business that is embodied by the system activity while considering idea of Airbnb which is sharing the living space with the paying guests and a sophisticated translation into sharing platforms which makes the business model new and innovative.

2. Lock-In: Lock-in indicates those business model elements that creates the switching cost and increase the incentives for business model to transact and stay within the activity system. it helps to retain the stake holders of business models like customers(Gassmann, 2014).

3. Complementarities: It indicates the enhancing values which effects the interdependence among the business model elements. It is the bundle activity which helps in generating more values.

4. Efficiency: It refers to save the cost through interconnection of the activity system. It creates the value of cost saving in the business.

This model helps to enhance the knowledge of different activity which helps in understanding the use of business model framework to attain the competitive advantage. This model explains about the use of business model. Business model is a way to identify the target market, target customers, product and services or the company. It helps in advertise the business to the target market.

References

Gassmann, O. F. K. &. C. M., 2014. The business model navigator: 55 models that will revolutionise your business. Pearson UK , 9(1), pp. 3-9.

Zott, C. & Amit, R., 2010. Business Model Innovation: How to Create Value in a Digital World. Research Gate, 9(1), pp. 14-42.

1) Who: Airbnb target those customers who looking for an affordable alternative option to hotel. The target segment of Airbnb are as follows:

Demographic: Age: 18-60 years, Gender: Female and Male, Psychographic: Social class: Working, middle and upper class, Behavioural: Personality: Ambitious and easy going (Salaway, 2018), Geographic: Region: more than 30,000 experience worldwide, Density: Urban

2) What: Airbnb offers trusted services. It offers stress free-way to earn some income from their property. It connects with people who want to rent their property to the individuals who are looking for some specific locales. It helps in making sharing enjoyable, safe and easy. They verify the listing and personal profiles (Gassmann, et al., 2014).

3) How: Value of the proposition can be created by identifying the value of the services and the products offer by the company. For example, Airbnb creates the value by matching the hosts and guests while mitigating risk and converting their customers into partners. Also, It helps hosts to manage guests and short term rentals to experiences destination.

4) Why: The business model is a company plans for making revenues. It helps in identifying the services, products and the target market of the selected business who wants to grow in the market to sell their product and services for example the revenue model of Airbnb refers to a fee that is charged from the travellers and the host. Airbnb earns through fees. 

References

Gassmann, O. F. K. &. C. M., 2014. The business model navigator: 55 models that will revolutionise your business. Pearson UK , 9(1), pp. 3-9.

Salaway, G. (2018, July 12). Airbnb - Business Model Toolbox. Retrieved from bmtoolbox.net: https://www.google.com/search?q=airbnb+business+model&rlz=1C1VDKB_enIN948IN948&oq=Airbnb+business+model+&aqs=chrome.0.0i512j0i20i263i512j0i512l4j69i60l2.4743j0j7&sourceid=chrome&ie=UTF-8