Introduction
Airbnb Company is an American firm founded in 2008. It is involved in the accommodation business by offering the global population a marketplace to list, learn, and book unique housing facilities via the internet. The company connects traveling communities to housing services in their desired destinations to enhance their experiences. Its activities are concentrated in cities in different countries. Airbnb manages accommodation facilities in over 34000 cities located in 191 countries (Airbnb, n.d). Evaluating the Airbnb Company’s strengths, weaknesses, opportunities, and threats can provide information useful in improvements to enhance future successes of the business.
Strengths
Airbnb has several areas of strength that can lead to greater success. It has experienced business units in the industry that create a cutting edge over the competitors. Experienced workers can help improve the quality of services and find innovative ways of doing business. The company has access to monetary support through loans that can enable the business to transact its operations without limitations of financial constraints. Moreover, Airbnb realizes huge profits and revenues from the global market. The company serves many people worldwide through the internet. Large traffic leads to high revenues and profits (Semmelhack, 2013). Airbnb boasts of established distribution and sales links. These networks give advantages over competitors as the company can reach many clients and market its services.
Weaknesses
Airbnb has some weaknesses in its operations that can influence its competitiveness. For example, the company has small business units to serve the global community. Small operations reduce the benefits of economies of scale (Hahn, 2015). Additionally, the company uses loan facilities that would attract higher interest rates in the future. As a result, Airbnb is likely to incur increasing costs and register little profits. Another weakness is the taxation structure from the American authorities and other countries. The taxes are high and reduce Airbnb’s incomes. Further, the company does not put huge investments in research and development that limits the chances for growth or improving business activities.
Opportunities
Airbnb Company has various opportunities that can help increase clients and revenues. There is a growing demand for accommodation services around the globe due to expanding travel industry (Schatford, n.d). Many people are moving to different places to conduct various activities such as business meetings, holidays, and other events. They can book accommodation in desired destinations over the internet. New products and services are emerging in the housing sector, for example, castles and leisure services. Airbnb can utilize these developments to reach new customers. The global housing industry is expanding, and new clients list their facilities with the company. These new acquisitions provide opportunities for the Airbnb to serve more guests and realize growth in profits (Setili, 2014). Further, there is a constant increase in income. Airbnb can access sufficient finances to expand operations.
Threats
Airbnb faces several threats that can affect the business negatively. New firms are joining the industry leading to stiff competition and reducing market share. Consequently, the company is at risk of declining profitability. Competition and other marketing forces lead to price fluctuations or price wars as firms seek to win more customers (Krotoski, 2014). Reduction in fees would result in small profits. The company faces a danger of higher interest rates. It has access to financial loans that attract interests. An increase in the rates can lead to high costs and reduced profits. The financial loans are also a less reliable source of capital. Changes in the financial regulations or credit limits can affect the company negatively. Another challenge is increasing labor costs as many workers are required to serve the clients. These expenses would erode the company’s profitability and affect sustainability.
Conclusion
Airbnb has attained success in the providing access to accommodation for many people through an internet based platform. The company can utilize its SWOT results to develop strategies that foster future achievements. It has strengths success financial support, experienced workforce, and established networks that are helpful in exploiting opportunities of a growing demand, new acquisitions, and novel products and services in the sector. However, the company needs to keep watch over threats such as increasing competition, labor costs, and price changes that can lead to declining performances.