Airbnb South Africa Global Strategy And Management Systems Case Study this paper have to be 22 pages long, my paper title is Airbnb-South Africa, and I hav

Airbnb South Africa Global Strategy And Management Systems Case Study this paper have to be 22 pages long, my paper title is Airbnb-South Africa, and I have a sample of a similar paper but different title which is Airbnb-East Africa. I also have the paper guide line below:

Global Strategy and Management Systems

The final project should primarily be a consulting service to a small and medium size firm going abroad for market development. This project must be a thorough strategic analysis and action plan for a business venture expanding into a foreign country market. In the selection of a country market, emerging economies are preferable. The business model can be an existing or imaginary one, but the firm possesses key entrepreneurial attributes such as innovation, proactiveness, and risk-taking for growth.

The presentation should be an in-depth professional presentation over the team project. Professionalism and creativity are expected along with solid content.Length of the presentation should be around 25 minutes and should not exceed 30 minutes in overall time.The content of the paper (22 pages or more, double-spaced) should include following points:

Introduction of the firm and Strategic issues
Analysis of the market (market risks)
Analysis of firm resources and capabilities (product and technology risks)
Development of competitive strategy and entry mode
International functional strategies
Brief introduction about the firm (e.g., distinctiveness of the product and technology) and the country you select.
facing the venture.
Analysis of both formal and informal institutional environments (e.g., economic, political, legal, technological, and cultural environments) that affect subsequent international business strategies in the country market
Identification of your target segment and customer needs
Identification and analysis of current and potential competitors in the local industry
In the local industry analysis, it is highly recommended to apply analytical frameworks such as Porter’s 5 forces model and strategic group analysis for a more systematic analysis of the competitive situation.
Distinctive competitive advantages of your firm, product, and technologies
Competitive strengths and weaknesses in value-chain modules compared to the direct competitors in the industry
You include analytical frameworks in the analysis, such as value-chain analysis and resource-based view of the firm.
Global competitive strategy and strategic positioning of your business in the local market
Logic regarding the balance between global standardization and local adaptation
Choice of entry mode and rationale (e.g., exporting, franchising, licensing, green field operation, joint venture, and nonequity-based strategic alliance).
International Organizations (control systems, structure, cultural changes, etc.) to facilitate the suggested international strategy of the firm
Human resource development for global strategy
Standardization vs. customization on marketing 4 P’s (e.g., pricing, place, promotion, and product strategy)
You may also include other functional strategies such as international HR strategy, leadership, global supply chain management, global production, financial strategies. 1
AIRBNB – EAST AFRICA
Introduction
Airbnb, Inc is a global firm that provides both hospitality and online marketing services
(Kavadias, Ladas and Loch 92). Tourists can book hospitality services through the website of the
company or mobile apps. Brokers are also offered a chance by the company to organize a deal
between a buyer and a seller. Airbnb is, therefore, a company that acts as a platform for
individuals wishing to offer or access different services such as hospitality and marketing. This
company is based in different nations, some of which include East African nations. The country
considered in this case is Kenya. Offering a platform for provision and access to accommodation
services has allowed Airbnb to be one of the unique organizations in the world (Kavadias, Ladas
and Loch 95). People around the world have been able to rent apartments through the services of
this company over the past years.
Motives for Globalization and Strategic Challenges
Currently, Airbnb operates in 190 countries worldwide (Zeryas, Proserpio and Byers
680). It’s a business firm that continues to develop more interest in opening branches worldwide.
Accommodation and hospitality services are some of the primary demands of many countries
since tourism plays a significant role in the growth of a nation’s economy. Airbnb promotes
tourism, and this is the primary reason why different countries have been interested in allowing
the operations of this firm (Zeryas, Proserpio and Byers 693). Kenya has numerous tourist
destination services and the presence of this company in the country has made access such
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services possible for tourists. Operation of the company in Kenya has allowed people to find
hospitality services of their choice and access them easily.
The rapid growth of the tourism industry has been the primary motive for the
globalization of this organization (Hanson et al. 158). Tourism continues to play a significant
role in the growth of countries’ economies, and this has contributed to the expansion of this
company. Sometimes, tourists find it difficult to access the best hospitality services. This fact has
also contributed to the growth of the company (Heo and Park). Online business continues to
grow due to several factors such as the advancement of technology and this has acted as a
motivation for the globalization of Airbnb. Research shows that most of the modern consumers
prefer online marketing, which has contributed to the growth of online marketing firms (Hanson
et al. 160).
Despite its global dominance regarding provision of hospitality services, Airbnb faces
several strategic challenges. One of the significant difficulties is stiff competition from other
firms offering rental services. This company faces this challenge since rental services have
become cheap and easily affordable in most nations (Fabo, Hudackova, andNogacz). This has
forced it to lower its charges to match with those of other competitors. Decreasing Its charges
continues to affect the operation of Airbnb especially in countries such as the United States of
America (Fabo, Hudackova, andNogacz). There have also been numerous cases where the
customers of the company end up complaining about the rental services they end up receiving.
Some of these services fail to meet their expectations,and this continues to affect the public
image of the company (Fabo, Hudackova, andNogacz). Developing consumer loyalty should be
the biggest priority of any global firm since this is considered as one of the vital determinants of
success (Fabo, Hudackova, andNogacz).
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Airbnb is also affected by traditional competitors such as Marriott who continues to offer
similar services at low prices (Zeryas, Proserpio and Byers 695). This company applies the
strategy of partnering with other firms such as Ian Schrager to boost the provision of online
marketing services, which has affected the consumer base of Airbnb (Zeryas, Proserpio and
Byers 697). Airbnb has therefore found it difficult to achieve consumer loyalty in countries such
as the United States of America due to the operation of competitors. This competition has
affected Airbnb in the sector of online marketing.
Formal and Informal Institutional Environments in Kenya
i.
Economic environment- the economy of this country relies heavily on the tourism
industry. As a result, the economic environment of Kenya will favor the operation of the
nation(Dupas and Robinson 173). Recent studies show that women in Kenya are continuing to be
engaged in the provision of rental and hospitality services (Dupas and Robinson 165). Women
will, therefore, play a significant role in the operation of this company within the country. They
will be able to access the website of this company and use it to improve the quality of their
services,and in the process, Airbnb will end up benefiting from this engagement.
ii.
Legal environment- legal requirements in Kenya are business friendly. They allow
expansion of global firms since most of them are not strict. Different acts such as the Companies
Act and Insolvency Act will enable Airbnb to operate in the country without the fear of any
penalties from the government (Myorset al. 220). Such acts guarantee the safety of global
organizations especially when they are starting their operations. Fewer Charges allow global
firms to open branches in the country comfortably (Myorset al. 233).
iii.
Technological environment- Kenya continues to embrace technological
advancements,and this will benefit the operation of the business. Online marketing is a growing
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sector in this country, and the introduction of Airbnb will have the advantage of facing less
competition (Dupas and Robinson 190). Online businesses in this country are less compared to
other nations such as the United States of America (Dupas and Robinson 183). Therefore, this
will be used as a technological advantage to attract more customers. Technological consideration
is relevant since it determines whether there will be an attractive market for the firm. Opening
this business in a nation where the citizens have not embraced technological advancements can
lead to losses.
iv.
Cultural environment- services to be provided by this company will target most of the
cultures of the country (Lonsdale 101). The cultural backgrounds of different ethnic groups
within the country will be considered in the advertisement of services, which will result in the
attraction of more customers. Kenya has a rich culture in different cities such as Nairobi and
Mombasa (Lonsdale 90). Rental and hospitality services will be based on the cultures of this
nation to develop more interest from the tourists. Cultural consideration is vital before setting up
any business since it allows society to appreciate the introduction of the organization.
Acceptance leads to the proper development of a company since members of the society plays a
significant role in such growth.
Market Analysis
As a company that offers an online market platform for hospitality services, Airbnb Inc.
needs to conduct an analysis of the Eastern African market before starting its operations. In
doing so, Airbnb needs to use the Porter’s Five Forces to determine whether the conditions in the
market segment are favorable for business or not. For instance, when analyzing the target market
and customer needs, supplier power, buyer power, competitive rivalry, the threat of new entry,
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and the threat of substitution are crucial factors which should be examined. The forces are crucial
because they can either work for or against Airbnb.
Before entering the market, the company will make an analysis of the target market as well as the
needs of customers. Market segmentation is also crucial before entry into the target market. For
that reason, Airbnb will consider demographic, geography and psychographic segmentation in its
operations. The market target will comprise of people willing to offer lodging services (hosts) as
well as individuals who may wish to arrange for lodging services (guests). The eastern part of
Africa is predominantly a tourist attraction destination. Therefore, the preferable lodging services
for most tourists include homestays or tourism experience.
Importantly, for Airbnb to succeed in the market, the needs of both guests and hosts
should be considered. First, guests visiting the region must be able to search lodging services
easily from handheld devices such as smartphones, tablets, and laptops. The ease of searching
different locations in the region can be facilitated by filters, which enable guests to book a
specific lodging service. Secondly, the system provided for booking must be secure to ensure
that unauthorized access and theft of personal details is mitigated. When the network used for
booking is insecure, users may face problems associated with identity theft or even discover that
the details provided while booking are exposed to commercial use without consent. Moreover,
the hosts need to be assured of the security of their property during, and after guests complete
their trip in the region. Some of them may destroy or steal property during their stay and as they
leave for home. It is crucial that the host does not incur any undue losses at the expense of any
party involved.
In addition, competitive rivalry is a factor that must be considered to ensure that the East
African market remains profitable for Airbnb. The company can take advantage of its good
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insurance policy to ensure that it captures a wider range of hosts willing to sublet their homes for
short stays. Being a major tourist attraction site in Africa, the hospitality industry of the countries
in the region is already competitive enough. Some websites are already available for tourists who
wish to search for preferred lodging services. Moreover, the high season is the time tourists visit
the region in large numbers; most hotels are always fully booked. Airbnb can seize the
opportunity and introduce homestays in new regions where hotel reservations may not be
available.
Nonetheless, it is crucial to understand the powers that suppliers and buyers have in the
target market. During the high season, tourists visit the region, thus, reducing buyer power
because of the high number of customers who need lodging services. In such as case, Airbnb can
be at a better position of controlling the price of its lodging services. On the other hand, during
the low season, the number of tourists reduces. In such as a case, tourists will have more control
of over the price of the lodging services.
Finally, the threat of new entrants in the market must also be considered by Airbnb before
venturing in the East African hospitality industry. The easier it is for another company to enter
the market, the harder it may be for Airbnb to make profits. The presence of a great number of
companies that offer the same services in a region lowers the potential to make profits in the
market. The demand for lodging services will reduce when customers have different places from
where lodging services are available. For instance, a considerable number of sites already offer
the service provided by Airbnb. The only difference is that those companies may not match the
insurance amount set aside for hosts in case guests destroy or steal property from their
establishments. Therefore, Airbnb enjoys a competitive advantage in that regard.
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The ability to make profits in East Africa will depend on Airbnb strength in its position in
the market. The company’s management must make many efforts to analyze the market with the
help of the Porter’s Five Forces to determine factors that may be at its disposal in the attempt to
make profits. The level of competition in the market, the ease of new entrants, as well as the
power of customers and buyers can also be used to offer crucial insights that maximize profits
for the company. It the Porter’s Five Forces are not considered adequately, Airbnb may discover
that it puts a lot of effort to do business, but still struggles to stay afloat. The market analysis tool
helps the company discover who has the most power in the market as well as what to do to gain a
competitive edge against competitors.
Airbnb has a strong brand image and a global reputation to at least 190 countries and
thousands of cities (Coles, Egesdal, Ellen, Li, & Sundararajan, 2017). It has over 1 million
listings. Airbnb disrupted the traditional guest houses and hotel industry. It now allows
homeowners to let their space to guests at an affordable fee. East Africa Kenya is an emerging
economy known for its vibrant African culture and tourism. All year round, Kenya receives
tourists who can now access guest houses at a budget instead of expensive hotels. The Airbnb
continues to rely on positive online reviews considering it is driven by internet-based technology.
However, the company faces stiff competition from other multinational and local companies
(Coles, Egesdal, Ellen, Li, & Sundararajan, 2017). The success of the company depends on how
the management of Airbnb in East Africa can address competition and technology risks. This
paper highlights the firm’s resources and capabilities (product and technology risks) in the region
as discussed herein:
(i)
Distinctive competitive advantages of Airbnb, product, and technologies
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In the modern business environment that is characterized by the stiff competition of
goods and services, it is paramount to conduct marketing research before making major business
decisions. Competitive advantages of Airbnb, product, and technologies aspects of the company
will be discussed:
(a) Competitive advantages of Airbnb:
Entry in the East African market by the Airbnb requires the company to a time when the
business environment will maximize the returns. For example, entry in the market during the
tourism peak season in August and December will maximize the profits of the business
enterprise. Moreover, Airbnb should consider the country to put more of its investment. Kenya is
a bigger economy compared to Uganda and Tanzania and has more advanced accommodation
facilities for the tourists. Therefore, investing in the Kenya market will place Airbnb at an
advantaged position compared to investigating in the neighboring countries. Early or late entry is
another aspect of timing that can help Airbnb management to gain a competitive advantage over
its peers in the sector. Early entry is advantageous in that it allows the firm to set the prices and
maximizing on making profits. Moreover, an early entrant has a better understanding of the
needs of the customers which allows the enterprise to produce goods and service that are unique
to the market thereby increasing Airbnb’s market share.
(b) The products:
Products and services are the selling point of the company. A firm whose goods and
services are unique is likely to attract a huge market share. Airbnb’s products will be geared
towards meeting the needs of the customers (customer-centered). Use of technology and
innovation will help the company in creating a strong brand in the region. Also, the company
will collaborate with local companies through strategic alliances especially with homeowners
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and small hotels as it makes entering a foreign market easier. On the other hand, a foreign direct
investment will set up offices, hiring personnel, and having control of operations in the new
market.
(c) Technologies:
Guesthouses and hotel industry’s success is pegged on how the company can maximize
on the use of technology in the management and operationalization. Kenya being the largest
economy in the region is more advanced regarding accommodation, infrastructure development,
and technological advancement. For example, advanced mobile commerce (Mpesa) makes
Kenya an investment hub in the region. Consequently, Airbnb should maximize on the
technology and innovation opportunities in the Kenyan market.
(ii)
Competitive strengths and weaknesses in value-chain modules:
This section will focus on the competitive strengths and weaknesses in value-chain
modules compared to the direct competitors in the industry. SW (strengths and weaknesses)
elements of SWOT analysis will be analyzed. Besides, analytical frameworks in the analysis,
such as value-chain analysis and the resource-based view of the firm will be used:
(a) Strengths in value-chain modules:
As noted above, Airbnb has a strong brand image and a global reputation to at least 190
countries and thousands of cities. Also, the company is listed in over 1 million listings. This is an
advantage to the company in that it can maximize its revenues across the world. Based on the
dynamic of the hotel and tourism sector, it is paramount for the company to have an international
presence. Another strength of Airbnb is the mode of business operation that allows homeowners
to let their space to guests at an affordable fee (Interian, 2016). This flexibility regarding
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business operation has enabled the company to increase its global presence as well as interact
well with the culture of the local communities.
The entry strategy that is used by the firm has given the company a competitive edge over
its peers in the region. East Africa market for Airbnb includes licensing, franchising, strategic
alliances, and foreign direct investments. In this case, licensing rental service providers lessens
the burden of setting up facilities at a high cost. On the other hand, franchising is better as it
promotes the brand Airbnb at a fee and therefore, avoiding unnecessary operation costs and
regulations in a foreign country (Midgett, Bendickson, Muldoon, & Solomon, 2018). The
financing and capital sourcing strategies have enabled the firm to increase its presence in the
region at a minimum cost.
(b) Weaknesses in value-chain modules:
Quality of the products offered in some countries is the main weakness facing the
company. For example, in the East African market, the economies of the three countries (Kenya,
Uganda, and Tanzania) are not the same. Kenya being more advanced has led to the company
concentrating on the Kenyan market, but services offered in the neighboring countries are
compromised. This has affected the global image of the company mainly from those clients from
less privileged countries. Political factors also affect the growth of the company in the region.
For example, the hotel industry in East Africa Kenya is regulated, and therefore, Airbnb can
easily violate these laws based on its business model (Ondraczek, 2013). Violation of laws
governing the sector in East Africa could lead to the company’s license being revoked.
Unpreparedness to risks is another weakness of Airbnb. For instance, Kenya’s stand on terrorism
has seen an increase in Al Shabab terrorist attacks in the region (Anderson & McKnight, 2014).
However, Airbnb like most of the hotels in the area are poorly equipped to thwart such attacks.
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Although Airbnb has a strong entry strategy in the region, the company does not have an exit
strategy as well a plan to revolutionize its operations in the Ugandan and Tanzanian markets. In
summary, the charts below give an illustration of competitive strengths and weaknesses in valuechain modules compared to the direct competitors in the industry:
Diagram 1: Showing resource-based view of Airbnb
Diagram 2: Showing Strengths in value-chain of Airbnb
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I. Competitive Strategy and Positioning
The first strategic goal that Airbnb would consider is the competition they are going
against. For instance, hotels and their prices are what Airbnb faces as a competition. Looking at
the Porter’s Generic Competitive Advantages, Porter design a competitive advantage plan where
there is a cost leadership strategy and focus cost is to increase profits by reducing cost and
increasing market share by charging lower prices, but still make a profit according to Porter’s
Generic Strategies: C…
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