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AirBnB: Critically explain and analyse the business model, strategy, opportunities and challenges

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The founders observed that this act in some way damaged the welcoming and pleasant rapport they had developed with their host. Such experience was a turning point for Airbnb. By incorporating fees and other charges into the company’s website, they were able to get rid of the discomfort of the act of paying (Qin, 2010). By offering online payments, they in fact made the website more appealing as a service. The Chief Product Office (CPO), Gebbia, explains: “Facilitating easy, web-based payments is one of the most important aspects of the whole Airbnb experience, which is about a community sharing unique and exciting spaces” (Schlie et al. , 2011, p.

2). The online payment scheme also enabled Airbnb to put charges on the transaction. This is the current business model of Airbnb. The website of Airbnb offers a search engine, which connects guests to properties, addresses possible issues, and determines prices. The company carries out several significant processes which facilitate the development of trust between the involved parties, like rigorous verification of identity (Semmelhack, 2013). To take advantage of the company’s online services, site guests look for listings in places they want to visit.

After picking an accommodation, they can communicate with the host to ask about anything related to the rental service. Afterwards they pay the rental fee in full via PayPal or credit card. The company keeps the payment until the visitors check in, making sure that they are not scammed and that the visitors are accommodated well (Tate, 2015). Hosts register their assets or properties on the company’s website. The company urges hosts to disclose important details about the property and themselves and recommends an expert photojournalist for their property.

Hosts with detailed information and high ratings get a larger number of customers. Through the website, hosts and guests can authenticate each other’s phone number, passport or driver’s license (Wheeler, 2014). The guest and the host discuss about the most agreeable way of accessing the property. Then, the hosts and guests provide feedback on the website; hence there is a high motivation to provide a satisfying experience because negative feedback implies less capacity to take part in the market for both guests and hosts.

The company also routinely offers insurance to majority of its hosts and seldom receives claims (Rifkin, 2014). The history of Airbnb demonstrates that it usually takes innovation, testing, and time to choose the appropriate business model and bring it into line with the entire value proposition (Tate, 2015).

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preview essay on AirBnB: Critically explain and analyse the business model, strategy, opportunities and challenges
  • Pages: 12 (3000 words)
  • Document Type: Essay
  • Subject: E-Commerce
  • Level: Undergraduate
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