Airbnb's 2017-2021 strategic plan outlines goals to become the world leader in the internet-based accommodation industry. Key strategies include related diversification through acquiring hotels in Morocco and Egypt, product development such as a "from home to home" package utilizing partnerships, market penetration in existing markets through marketing, and market development in Middle East and Africa. One-year objectives are to develop new hotel acquisition plans, finalize a partnership with Uber, increase market growth and shares, enhance customer programs, and develop cultural/environmental initiatives. The plan aims to realize the vision through aggressive growth and adapting offerings to new markets and cultures.

1. Airbnb, Inc. Strategic Plan
2017-2021
MBA - strategic Management Assignment
(Harvard case study June 2017 )

2. • Mohie Ismail (Team Leader)
• Lina Hamdy (Team Reporter)
• Ashraf Yusif
• Wael Goda
• Mohamed Fadl
Challengers Team Members

3. I. History
II. Strategic Issues
III. Situational Analysis
IV. Strategic Analysis and Choice
V. Recommended Strategy
• Vision
• Mission
• Goals
• Strategy
• Objectives
VI. Q & A
Agenda

4. History

5. History
Airbnb is a two-sided marketplace that sought to
match people that owned real estate properties with
people interested in renting short-term lodging. The
company was founded in August 2008 and based in
San Francisco. Joe Gebbia, Brian Chesky and
Nathan Blecharzyk are the founders of Airbnb.

6. History
2008
• Startup
2009
• More than 1000 Customers
2010
• Airbnb photography Program launched
2011
• More than 1M customers
2012
• Airbnb employed more than 2000 freelance Photographers
2015
• Airbnb had 1.8M listings in 34,000 cites

8. Strategic Issues

9.  Security and Safety:
We have greatly developed and upgraded our security and
safety system to guarantee safe and secured experience for
both our guest and our host and prevent crimes.
Strategic Issues

10.  Regulatory Risk:
We are a global company and each country has different
regulations and legislations that control home
accommodation industry in general and specially the
interned-based ones like Airbnb.
Strategic Issues

11.  Cultural Adaptation:
We have to adapt ourselves to the culture of every country
and even city. Some conservative cultures have concerns
about sharing accommodations, for this in order to develop
these markets; we need to continuously develop our product
to match with their cultures.
Strategic Issues

12. Situational Analysis

13. A. Porter’s Five Forces Analysis

14. A. Porter’s Five Forces Analysis

15. A. Porter’s Five Forces Analysis
According to Porter’s Five Forces analysis, we can
conclude that:
 The internet-based home accommodation industry
is attractive.
 Airbnb has good control over its competition as its
horizontal competition is medium; as well as its
vertical competition.
This gives Airbnb a very good chance to continue its
aggressive growth.

16. B. SWOT Analysis

20. B. SWOT Analysis
Strengths
Industry Leadership: Airbnb is a leader in the internet-based home accommodation
industry
Price Competitiveness: Airbnb has variety of market offerings which makes it able to
provide competitive prices
Customer Engagement: Airbnb has strong customer engagement model: Facebook
Connect, Wish List and Heart icons
Operating cost: Airbnb has a relatively low operating cost since it is an internet-based
company
Expansion:
a. Airbnb has high supply supported with high demand which gives it the chance to expand
and develop new markets.
*Airbnb has more than 150 million guest using its services.
*Airbnb in currently available in 65,000 cities in 191 countries
*Airbnb succeeded to increase host listings from 1.8 million in 2015 to 3 million in 2017
b. Another chance that supports Airbnb expansion is the low operating cost

21. B. SWOT Analysis
Strengths
Variety of market offerings: Airbnb has a variety of its market offerings in terms of price,
locations, styles & experiences etc. Airbnb encourages the authentic local experience so
developed added the option of home-made food and local tour. Also, Airbnb created the
Wish List to encourage its guest to select their wishes
User Friendly System: Airbnb website and application are very simple, easy & quick to be
used by both the guest and the host
Business Model: Airbnb built its model in a way that is generating revenue from both its
supplier (host) and buyer (guest)

22. B. SWOT Analysis
Weakness
Security: Airbnb still has a gap in the security system for both the host and the guest
Public Relations: Airbnb still need to work on its Public Relations to be more effective
Customer Services/Relations: Despite the good customer engagement that Airbnb
succeeded to develop, it is still need to develop its customer services/relations specially
during and after guest/host experience
Lack of control of accommodations: Airbnb has no control over the real conditions of the
accommodations listed this affects the level of experience as well as the guest trust in
Airbnb

23. B. SWOT Analysis(External Factors-Mega)

24. B. SWOT Analysis(External Factors-Mega)
Criteria Opportunities Threats
Political
Political instability has a negative impact on the
business of Airbnb
Economic
In low economic status, Airbnb still has a chance to
continue growing as it became an opportunity for both
the host and the guest as follows:
a. Host: Airbnb became a source of income for its
hosts:
*79% of hosts share the home in which they live
*52% are moderate to low income
*48% of host income is used to pay for regular
household expenses like rent and groceries
b. Guest: Airbnb provides variety of offerings so it can
be an opportunity for Airbnb to get share from the low
economic status as it will be their choice rather than
the hotels
Economic crisis/recession: can lead decreasing
the demand

25. B. SWOT Analysis(External Factors-Mega)
Criteria Opportunities Threats
Social
Culture Exchange: Airbnb still has an opportunity to
continue its growth while encouraging culture exchange
and promoting it.
*86% of travelers want to 'live like a local'
*79% of travelers want to explore an authentic
neighborhood
Culture Conflict: Airbnb might face
difficulty in developing some markets
due to the culture conflicts and
conservatives
Technological
Technological Updates: Airbnb is an internet-based firm,
so it has a good opportunity to make useful use of any
new technologies for more guest and host engagement
and satisfaction
Environment
Airbnb can utilize the environmental trend and create a
wish list for those who are environment friends
Legal
Country Regulations:
a. Many countries are studying to put
internal-based home accommodation
industry into a more controlled legal
regulatory framework
b. Increased taxes on online
accommodation-sharing services

26. B. SWOT Analysis(External Factors-Task)
Criteria Opportunities Threats
Guest Large market scale
Risk of having guest using Airbnb
services for doing illegal issues like
theft, etc.
Host Large market scale with variable offerings
Risk of having hosts using Airbnb
services for doing illegal issues like
theft, etc.
Competitors
a. New Entrants: easy to enter the
market
b. Existing competitors like
Booking.com, Expedia and
TripAdvisor are taking share from
Airbnb

27. Situational Analysis Conclusion
Based on the Situational Analysis we can conclude
that:
 Internet-based home accommodation industry is
promising and still growing.
 Airbnb has good opportunities to continue its
aggressive growth by developing new markets,
developing new products and penetrating the
existing markets.

28. Strategic Analysis and Choice

29. A. SPACE Matrix

30. A. SPACE Matrix

31. A. SPACE Matrix

32. A. SPACE Matrix
Strategy Definition
Forward Integration
Gaining ownership or increased control over distributors or
retailers
Backward Integration Seeking ownership or increased control of a firm’s suppliers
Horizontal Integration Seeking ownership or increased control over competitors
Market Penetration
Seeking increased market share for present products or
services in present markets through greater marketing
efforts
Market Development
Introducing present products or services into new geographic
area
Product Development
Seeking increased sales by improving present products or
services or developing new ones
Related Diversification Adding new but related products or services
Unrelated Diversification Adding new, unrelated products or services
From the analysis, we can conclude that Airbnb is in an aggressive position. The
Aggressive Quadrant in the SPACE Matrix suggests the following strategies:

33. B. Grand Strategy Matrix

34. B. Grand Strategy Matrix

35. B. Grand Strategy Matrix
Based on the position of Airbnb in the Grand
Strategy Matrix, we can conclude that:
 Airbnb has a strong competitive position in a
rapid-growth industry and Airbnb should
continue using this strong competitive position to
increase its growth rate.

36. Recommended Strategy

38. “To be the world leader of internet-based
accommodation industry”
Vision

39. Values
Enjoyment
Competitiveness
SharingSafety
Hospitality

40. “We believe in making the whole world a big
community that we all belong to. We connect our
guest with unique authentic local accommodation
experiences provided by our host at competitive
prices anywhere and everywhere, utilizing the power
of technology.”
Mission

42. This section provides goals for Airbnb based on its
vision, mission, strategic issues and situational
analysis as well as the industry analysis. They are
well defined, planned, measurable and time bound
goals that Airbnb has to achieve by the end of 2021
to make its vision true.
Goals

43.  To achieve market growth with overall 80%
market share from the existing markets.
Goals

44. To diversify in related business to be able to develop new
markets and penetrate the existing ones:
1- Acquire small low cost 3 hotels in the following
destinations in order to expand in Middle East and Africa
while adapting to culture difference:
i. A hotel in Morocco with estimated cost 30 million
USD
ii. Two resorts in Egypt, especially in Hurghada as a
low cost destination with estimated cost 40 million
USD
Goals

45. 2-Make partnership agreement with Tui International and
FTI (tour operators), that will help to control demand in
our new hotels also support our end goal to be top leaders
of the industry. These tour operators can help us in
arranging the flights, transportation, and local tours and
excursions for the guest
3- Make partnership agreement with Uber that will help in
arranging the internal transportation and local tours for
the guest.
Goals

46. To have 10% market share from Middle East and Africa
 To develop our services and products that match with
target markets needs:
1- Add an option “from home to home” utilizing our
partnership with Uber, and tour operators, where the
guest can choose a full package including flights, internal
transfer and local tours and excursions.
2- Develop the following programs:
I. Culture Exchange program for young people
II. Environmental awareness program for
environment friends
Goals

48. According to the situational analysis and industry analysis
which we conducted for Airbnb, aggressive strategies were
recommended according to Airbnb strong position. So we
recommend a 5 year aggressive strategy that combines
Related Diversification, Product Development, Market
Penetration and Market Development together.
Strategy

49. 1. Related Diversification
2. Product Development
3. Market Penetration
4. Market Development
Strategy

50. Strategies
Strategy Recommended Ways to Execute the Strategy
Related
Diversification
1. It is recommended that Airbnb acquire small low cost 3 hotels in the
following destinations in order to expand in Africa while adapting to
culture difference:
A. A hotel in Morocco with estimated cost 30 million USD
B. 2 resorts in Egypt, especially in Hurghada as a low cost
destination with estimated cost 40 million USD
2. Make partnership agreement with Tui International and FTI ( tour
operators), that will help to control demand in our new hotels also
support our end goal to be top leaders of the industry. These tour
operators can help us in arranging the flights, transportation, and
local tours and excursions for the guest
3. Make partnership agreement with Uber that will help in arranging
the internal transportation and local tours for the guest.

51. Strategies
Strategy Recommended Ways to Execute the Strategy
Product
Development
1. Adding an option “from Home to Home” utilizing
its partnership with Uber, and Tour Operators.
Where the guest can choose a full package
including flights, internal transportation and local
tours and excursions
2. Develop the following programs:
A. Culture Exchange program for young people
B. Environmental Awareness Program for
environment friends

52. Strategies
Strategy Recommended Ways to Execute the Strategy
Market
Penetration
Increase the market shares from the existing markets
through greater marketing efforts, utilizing all social
media engagement tools, marketing in heart program
and investing in Google display advertising with
banner ad campaigns including images from actual
housing being offered on Airbnb website
Market
Development
The recommended ways to execute the above 3
strategies will help Airbnb to develop Middle East
and Africa and take a good share from it.

53. This section presents one year objectives for Airbnb to
achieve its goals based on the above recommended strategies.
These objectives are to be achieved by the end of 2017
Objectives

54. 1. Develop a plan for acquiring a new type of hotels
in middle east to be in the same style of local
homes and low cost to maintain our competitive
advantage regarding price competitiveness and
authentic local experience
2. Finalize a partnership agreement with Uber to be
able to mage internal transfers
3. Implement the approved market communication
plan in order to increase market growth in
existing markets by 30% and achieve 4% market
share in the developed markets by the end of 2017
Objectives

55. 4. Increase repeater guest to average 50% of total
guests using Airbnb services
5. Develop an environmental awareness program for
environment friends
6. Develop a culture exchange program for young
people
Objectives

56. 7. Enhance and upgrade Airbnb Customer Management
Program for both host and guest to increase their
satisfaction to 90% as measured by Airbnb satisfaction
survey
8. Enhance and upgrade Airbnb safety and security program
to reduce compensations by 8%
9. Development and implement policies and guidelines for the
minimum standards of service quality and accommodation
quality to guarantee its users experience
Objectives

57. Any Questions ?