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AirBnB

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by

Steph H

on 11 February 2014

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Transcript of AirBnB

Case
Air Bed & Breakfast was first started in October 2007, when Brian Chesky and Joe Gebbia were sharing an apartment in San Francisco. There was an international design conference coming to the area and the two roommates noticed that on the conference’s website, all the hotels were sold out. Chesky and Gebbia needed money to help pay rent and they decided to rent out space in their apartment. The set up air mattresses, designed a website, and their idea took off!
Product
A site for traveling designers who wished to save money and interact with other designers
Was later redesigned to accomodate people attending meetings and conferences in the area
Final redesign focused on allowing people to rent not only spaces, but also apartments.
Central Issues
Financially stable, but did not bring in significant amount of income
Not easy to book
Pictures did not portray accurate depictions of living area
Monetary exchange caused awkwardness between host and guest
SWOT Analysis
Strengths:
Established niche, broad customer market due to housing options and shorter rental time period options, and transaction fee
Weaknesses:
Competition (Expedia, etc.) and competitive pricing, maintaining and managing the company's technology and host networking, and larger volume of clients
SWOT Analysis (cont.)
Our Strategic Recommendation
Our Strategic Reccommendation
Opportunities:
mobile platforms, broader online ventures, and social media advertising (financially cheaper, easier to use, and easier to maintain)
Threats:
time consuming due to a small overhead and large client and host base, technology limitations (down servers, etc.), and the need to keep their company's distinguished reputation ahead of the game (whether it is through advertising or innovating)
By: John Rovnanik
Stephanie N. Hiromoto
Mike Miceli

Discussion
Questions
integrate a transaction system such as PayPal into their site in order to book the trip. By making sure that transactions occur online, the Company takes away the uncomfortable feeling of renter’s asking customers for payment when they arrive at the rental place. The founders decided to expand the rental options to include weekly and monthly rental options for customers. This allows for renter’s to rent out their spaces for a longer period, and creates a competitive advantage that the Company has over its competitors. The rental agreement of Airbnb creates a larger market for the Company and they must continue to offer the rental options on a weekly and monthly basis, which will attract even more customers to use their site for booking trips.
Airbnb has to continue to create an online travel experience that is user-friendly. The Company must make sure that all rental spaces have pictures that are clear and give the customer an idea of the size of rental space, along with the detailed profile of the person who is renting out the space. In order to do this, an online profile must be established on the site itself. This will allow potential renters to see what kind of space they will be living in, as well as a detailed look into their host. Through research the founders realized that face to face payments is much more uncomfortable than online processing. With this information, the founders should
1. If you could give the founders of AirBnB one piece of advice, what would it be?
2. Identify Airbnb’s major competitors. Place the competitor’s business models side by side with Airbnb’s business model. Comment on the strengths and weaknesses of Airbnb’s business model compared to those of its major competitors.
3. What tips can you give the Company to make the website more user-friendly?
4. Do you think the Company can compete in the broad travel market? Give examples.
5. From what you have learned from Airbnb, would you be comfortable using their website and renting from a stranger?
Full transcript