Products - Markets Group 1

Daria T
Deny S
José R
Patrícia C
Pedro D
Agenda

0 Business Overview

1.1 Ansoff Matrix

1 Sustainable Value in Products Markets 1.2 Products Markets Matrix

2.1 Complementary Effects

2 Products Markets Mode
2.2 Stategic vs Complementary seg

2.1 Generic strategies model

3 Competitive advantage
2.2 Adapted generic strategies model

2.1. Airbnb Innovation Stategy

4 Innovation 2.2 Value Curve of Airbnb
Business Overview

Number of cities Bookings Revenue Valuation

100k 300M 3,7 B $ 35 B $

(until 2018) (2019)
Business Overview

Key activities Value Proposition Revenues source

Hosts:
Income generation
Marketing Ease transactions
Platform Maintenance Calendar/booking managment
Charging transaction fees:
Customer Service Guests:
Guests and Hosts
Lower Cost
easy transctions
Local Experience
For all: Trust
 Sustainable Value in product markets
Ansoff Matrix
Existing Products New
• The company began by offering
accommodation, competing with (more
expensive) hotels.
Existing

Market Product
Penetration development • Aggressive marketing. Price was the way to
attract a cost-conscious guests. 
Markets

• Offering discounts through voucher codes is

another market penetration tools the company
uses nowadays in order to conquer market
share.
Market Concentric
New

Development Diversification • The excellent customer service the company

offers, allows it to lead the market and gain the
trust of customers (host insurance).
 Sustainable Value in product markets
Ansoff Matrix
Existing Products New
• Extend current products to new market or new
applications for current markets.
Existing

Market Product
Penetration development • The main source of market development for
Airbnb is geographic expansion into new
markets (Europe/Germany acquisition of
Markets

Accoleo).

Market
Diversification • Airbnb started its operations in San Francisco,
New

Development California and today it has more than 6 million

listings in more than 191 countries and regions
worldwide.
 Sustainable Value in product markets
Ansoff Matrix
Existing Products New

•  Airbnb Plus is a selection of only the highest

Existing

quality homes with hosts known for great

Market Product reviews and attention to detail.
Penetration development
• Every home is verified through in-person quality
Markets

inspection to ensure quality and design. Just

look for the PLUS badge.

• Airbnb Luxe—offering the world's most

extraordinary homes with the highest standard
Market of service.
Diversification
New

Development
• The availability of the services is different
market by market.
 Sustainable Value in product markets
Ansoff Matrix
Existing Products New

• Started as short-term rental for

the mainstream and accommodation provider,
Existing

Market Product is now a platform that includes also experiences

Penetration development and many other complementary services.
Markets

• Airbnb is increasing its offer, by targeting new

segments in the market (from cost-conscious
travelers, to premium segments)

• Along with new markets,  product development

Market is running through horizontal integration
Diversification
New

Development (alliances with hotels to list their rooms) and

vertical integration (purchasing and creating
their own properties and resorts)
Sustainable Value in product markets
Products-Markets Matrix

ByMoney
psychological motivation
savers - drawn to Airbnb byof
its the travellers
low cost.
Home seekers - attracted by household amenities, large spaces, and the homely feel.
Collaborative consumers attracted by sharing economy ethos, by the opportunity to interact with locals and local experience.
Pragmatic novelty seekers - drawn to the novelty and home benefits.
Interactive novelty seekers motivated by novelty and by the opportunity to interact with locals.
Luxury travelers – drawn to luxurious, designed properties.

Money savers
Home seekers
Collaborative consumers
Pragmatic novelty
seekers
Interactive novelty
seekers
Luxury travelers
Sustainable Value in product markets
Products-Markets Matrix

By host type

Private owners – living in the same place

Dedicated properties – private owners, but property dedicated for Airbnb stays
Agencies – managing multiple properties
Hotels – from small to large 
Products Markets Mode
Complementary effects

• Airbnb Plus: designer service and house

supplies guarantee 
Bundling • Airbnb for work: team building experiences
•  Future might bring further development
(more in the overall  travel industry).

• Airbnb Experiences. 
Cross- • Delta SkyMiles® Airbnb partnership program
subsidization for earning miles 
Products Markets Mode
Strategic vs Complementary segments
It represents segments of customers: travellers and guest

Hotels
Experiences HotelTonight
Culture & History
Food & Drink
Nature & Outdoor

Airbnb
Business travel
Business trips 25 to 40 Yold Premium
Relocating to a new city savvy travelers Airbnb Plus
Collaborative spaces
Team-building activities + home owners Luxury Retreats

and investors
 Competitive advantage
Evolution on the generic Strategies
xxx Deny closes…
Strategic Advantage
days
ly Cost/Price Differentiation
Ear

Scope Why?
Broad Cost leadership Differentiation
+ Competing against craiglist and so…
Differentiation
Narrow Cost Focus
Focus

Strategic Advantage
aday
w
No Cost/Price Differentiation

Why?
Competing against hotels.. Scope Broad Cost leadership Differentiation
But it also has the differentiaton?? +
How to deal with it ? Differentiation
Narrow Cost Focus
Focus
 Innovation
Evolution of adapted generic strategies
xxx Deny closes…
Cost Advantage +
days
ly Low High
Ear

Pure Differentiation with cost Why?

Differentiation High differentiation leadership
xxxx
+
Pure Cost
Low Indistinct
leadership

Cost Advantage +
days
wa Low High
No

Pure Differentiation with cost

Why? Scope Broad leadership
differentiation
xxxxx +
Pure Cost
Narrow Indistinct
leadership
 Innovation
Innovation Strategy
A company must identify the approach that best suits its interests
To be closed by Pedro

Tech Competencies Why?

Innovation Leader: based in silicon valley, Airbnb as soon
realized how to disrupt the hospitality market, by
Reduced High creating a marketplace in which the key feature was the
referral system. they also realized that an enhanced
control of quality (photos, …) was a key feature to
Innovation succeed.
Pioneer specialist
Innovation leader
Innovation The Approach implemented to experiences, by replicating
Approach what they have done in hospitality, also reveals company
Innovation Innovation capacity in staying in the forefront of innovation
Follower streamliner follower
Follower: in some cases, Airbnb had proved to be a
relentless follower, being able to rapid implement new
offers or buy companies which grabs parts of additional
markets (example Hotel Tonigh vs Booking).
Innovation
Innovation Model
Airbnb innovation disrupted the hospitality industry
To be closed by Pedro

Market Attractiveness

Low Medium High

High Brand Process Concept

Competitive Continuous
Strength Medium Reformulation Reorganization
improvement

Low Package Design Service

Innovation
New Value Curve

Eliminate Reduce Raise Create

High
Airbnb

Hotels
Low

Source: CHAN KIM & RENEE MAUBORGNE

Sustainable Value in product markets
“Book Homes from local hosts in countries and experiences a place like you live there”
Agenda

History &
Business Products Markets Mode Innovation
Overview 2.1 Complementary Effects 2.1. Airbnb Innovation Stategy

2.2 Stategic vs Complementary seg 2.2 Build a value Curve for Airbnb

0 1 2 3 4 5
Sustainable Value
in Products Competitive advantage Wrap Up
Markets
1.1 Ansoff Matrix
1.2 Products Markets Matrix