Have Text, Will Travel: Can Airbnb Use Review Text Data to Optimize Profits Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Have Text, Will Travel: Can Airbnb Use Review Text Data to Optimize Profits Case Study Analysis

The bargaining power of buyer is of high force because the cost of switching from Airbnb to other competitor is relatively low. Even though, the company costs might be lower, the robust competition resulted in hotels reducing their cost to level of Airbnb to retain their customers. The demand of customers depends on uniqueness of rental, privacy, high quality service and satisfying experience. The bargaining power of suppliers is of low force due to exclusive supply requirement of company. The tour guide or landlord as a supplier could not work with other websites, if working with AirBnb which in turn gives control to company over its suppliers. The exclusive supply requirement coupled with big brand name of company provides control and power to AirBnb, leaving them low power to bargain. The competition is robust and rigorous in the market which depends on; the extent to which rivals are in balance, high foxed cost in industry, industry growth rates, differentiation and exit barriers. The competitors of AirBnb includes HomeAway, VRBO, FlipKey, HomeToGo, House Trip and so on. Despite of intense competition, convenience offered by AirBnb, access to high quality listings and more rooms at competitive costs given competitive edge to AirBnb against Hotel industry. The threat of substitutes is of low force taking into account the company offers higher value and benefits in comparison to Hotels. Also, the difference between using hotels and AirBnb is not lower cost but the quality of listings. The company offers more options and more independence where by customer can easily get affordable home with homely amenities at affordable prices. The threat of new entrant is high because of high entry barreirs in shape of capital requiment of entry, economies of scale, access to distribution and supply channels, supplier and customer loyalty, expected retaliation, experience, government action or legislation and differentiation. The model can be seen in Appendix C.

Recommendations

The company is recommended to optimize the revenues by evaluating the changing nature of the guests and host on the continual basisthrough effective and adequate system protocol.Also, the vast customer service offering should be developed by company in differentlanguages because since the company has been serving travelers all around the world, the inability to effectively communicate with the providers of service could lead to dissatisfaction of customer and hence, negative word of mouth. The company should also assist host with mortgage and rent payments & promote increased level of budget oriented travelers.

Additionally, the review sentiment analysis would allow the company to gain valuable insights into the wider public opinions, hence providing an opportunity to detect changes in overall opinion towards brand. The automated sentiment analysis through natural language processing would lead to accuracy and reliability in results. Receiving feedback within an equal interval of time will most probably result in theaddressing the key improvement areas and the company would better try to fix issues in order tomaintain or increase number of customer acquiring services at Airbnb.....................................

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