Airbnb Porters Five Forces 2021
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Porter’s five forces is an essential framework in assessing a company’s profitability and attractiveness based on threat of entry, threat of substitutes, bargaining power of buyers and suppliers as well as the degree of rivalry among existing firms. An industry is considered unattractive if all the five forces are high. If an industry is characterized by high competitor rivalry, threat of new entrants, high bargaining power of buyers and suppliers it will be less profitable. In this report, the author will leverage porter’s five forces to discuss the competitive forces in the industry in which Airbnb is competing. Using evidence from the supplied case study, the author will assess the attractiveness and profitability of the home sharing/hospitality/global vacation rental industry, using Porter’s 5 Forces model to guide this discussion.
HARVARD
Magezi, K. Prudence (2021) "Airbnb Porters Five Forces 2021" 123 Writing [Online] at https://www.123writing.com/sample/airbnb-porters-five-forces-2021
Magezi, K. Prudence (2021) "Airbnb Porters Five Forces 2021" 123 Writing [Online] at https://www.123writing.com/sample/airbnb-porters-five-forces-2021
APA
Magezi, K.P. 2021. Airbnb Porterss Five Forces 2021" 123 Writing. Retrieved from https://www.123writing.com/sample/airbnb-porters-five-forces-2021
Airbnb Porters Five Forces Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Use Porters five forces model to analyse an industry on the basis of the five competitive forces.
- Analyse the global vacation rental/homesharing industry and discuss the competitive forces in the industry in which Airbnb is competing
- Understand how the five forces have affected Airbnb and rival firms and the impact on industry structure, attractiveness, and profitability, providing evidence from the supplied case study
- Use Porters 5 Forces to understand how Airbnb has managed to defend against intense competition, impact of covid-19 and the strategies it uses to create 'blue oceans' that are defensible, helping it capture market share and maintain competitive advantage.
Analyse Airbnb through the lens of Porters five forces to assess how the five forces affect Airbnb and the global vacation rental/homesharing industry
1.0 INTRODUCTION
Porter’s five forces is essential framework in assessing a company’s profitability and attractiveness based on threat of entry, threat of substitutes, bargaining power of buyers and suppliers as well as the degree of rivalry among existing firms. An industry is considered unattractive if all the five forces are high. If an industry is characterized by high competitor rivalry, threat of new entrants, high bargaining power of buyers and suppliers it will be less profitable. In this report, the author will leverage porter’s five forces to assess the attractiveness and profitability of the home sharing/hospitality/global vacation rental industry.
2.0 Airbnb porters five forces 2021
2.1 Bargaining power of suppliers
Suppliers are those that supply an organization with services and products that are required in the production of a company’s product or service. A supplier is likely to have higher bargaining power in case of supplier-competition threat, higher switching costs, differentiated products and concentrated suppliers (Johnson et al 2017). According to Grant (2016), depending on the above factors, suppliers can have so much power to the extent of leaving the company unprofitable.
In the case of Airbnb, major suppliers include hosts, and tour guides. When it comes to hosts, the company has put in place exclusive supplier requirements which do not allow hosts on its platform to list on competitor platform. In fact, the company has much power over hosts in that as long as customer has booked, the host must operate even if he/ she is operating in losses (Bainebridge 2018). Verdict: Low supplier power
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