Sivakumar Ghayathri Session 3 PDF

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Industry Analysis...

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AIRBNB is a community-based online platform that connects hosts and travellers and facilitates the process of renting without owning any rooms itself. BUSINESS MODEL OF AIRBNB Customer Identification : Are users paying? If not, who are the other customers? Airbnb is a hybrid business model - matchmaking. It connects two groups of customers – guests and hosts. Guests are travellers searching for a place to stay and hosts are landlords who are willing to rent their house or units of their house. The platform provider charges a service fee to both customer groups for the matchmaking service. The fee is applicable only when a booking is made while the registration is free (no fee involved when a guest creates an account or when a host lists his property - Freemium appropriation). Customer Engagement : Taxi or Bus Airbnb is a common platform that gives flexibility to its customers. For hosts, it allows to set their prices, tailor their schedule, choose who to rent out to and choose to host or create an activity. For guests, it allows to filter and choose properties based on their preferences/services available and to connect with hosts. Thus, the Airbnb platform as such is generic – a bus - but where mechanisms are made available for the users to customize according to their needs and make it more bespoke – a taxi – for themselves. This type of customer engagement with a scaling mechanism is analogous to a rental car, where resources are provided in an all-purpose way, but the customer is given the facility to direct and use them in ways specific to their needs. Value Chain Linkages : Integrated, hierarchy or networked The value chain linkage of Airbnb is networked. The website provides a search engine, which links travellers to properties. It is an open network that provides collaboration on value chain functions (logistics, operations, marketing, sales and service) across sharing economy as follows - travellers search for listings in the destination city to make a booking; the hosts manages operations of providing the key, cleaning the place and providing amenities; the platform markets to guests and provides high level of customer service through 24/7 customer support, host protection insurance, identity verification, rating and review system. It allows for scalability and technical openness, which are qualities of network value chain. Monetization : When, what and how is money raised? Guests pay for the entire stay while making their reservation . Airbnb holds the money until a day after guests check in, ensuring that they are not swindled out of their cash and that the guests are treated well. In exchange for providing the market and services like customer support, payment handling and $1 million in insurance for hosts, Airbnb takes a 3% cut from the renter and a 6% to 12% cut from the traveller, depending on the property price. Thus, it is a two sided scenario, charging both sides of the marketplace (demand and supply).

References: 1. Silverman, Brian. Business Models and Modelling, Emerald Publishing Limited, 2015. ProQuest Ebook Central, https://ebookcentral.proquest.com/lib/city/detail.action? docID=4339902. 2. Baden-Fuller, C. & Haefliger, S. 2013. Business Models and Technological Innovation. Long Range Planning, 46(6): 419-426.

3. https://www.investopedia.com/articles/investing/112414/how-airbnb-makesmoney.asp

4. https://bmtoolbox.net/stories/airbnb/ 5. http://businessmodelzoo.com/exemplars/airbnb 6. https://research-methodology.net/airbnb-value-chain-analysis/ 7. https://airbnb.io/ 8. https://hackernoon.com/7-monetisation-strategies-associated-with-onlinemarketplace-model-130ad8e83653...