Airbnb Case Prep.docx - Taylor Stein GBA 490 Chapter 2 Charting a Company\u2019s Direction Case Airbnb in 2016 A Business Model for the Sharing Economy(in

Airbnb Case Prep.docx - Taylor Stein GBA 490 Chapter 2...

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Taylor Stein GBA 490 Chapter 2: Charting a Company’s Direction Case: Airbnb in 2016: A Business Model for the Sharing Economy (in text) Assignment Questions: 1. Using the example chart in the textbook for business models, illustrate and compare the value proposition for Airbnb, large hotels such as Marriot and Hilton and bed & breakfasts. 1. Given the inputs for value proposition being the value delivered, price, and costs. Large hotels such as Marriot and Hilton have significant operating costs that include wages, property and utilities, and other purchases like food make up 61% of the industry’s total costs. These large costs, when looking at value proposition, may impact the ability of their business model to be a moneymaker. However, given that large hotels tend to have more amenities, customers may have a perception of greater value delivered. We can see through the success of these large hotels that their business model is clearly a moneymaker so although they do have extremely large costs as compared to smaller bed and breakfasts and Airbnb, they also add value for their customers, and have effectively priced their products and services. Bed & Breakfasts are typically smaller than hotels which makes them more similar to Airbnb in terms of offering rooms in their own homes to accommodate guests. Customers are able to get a homier feeling and quiet atmosphere which creates value for the customer, giving them a unique leg up over the larger hotels. Each one of these different business models has unique advantages that the others don’t offer which allows for differences in their value propositions.
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