Business and International Strategies
Business strategy is essential for companies to remain competitive in a global and digital economy. Airbnb’s international strategy has allowed it to expand outside of the United States and into over 100 countries and 630 cities (Fleischer, Ert and Bar-Nahum, 2022). This strategy has assisted them in gaining a competitive advantage, as it gives them access to a larger market and multiple customer segments and reduces their dependency on their main market. Additionally, their international strategy has allowed them to learn and adapt quickly to different customer preferences and economic conditions in their markets.
International strategy is a key part of Airbnb’s success. It not only expands their customer base but also allows them to create a brand awareness that leads to increased customer loyalty and repeat business. By taking advantage of cultural and economic differences within their international markets, they have been able to leverage their own strengths and resources to gain a competitive edge (Wang et al., 2020). This strategy has not only made them competitive in their home market but has also helped them become a leader in their international markets.
Differences Between Corporate Business and Functional Strategy
The three types of strategies that organizational teams can use are corporate, business, and functional strategies. Corporate strategy is the overall business strategy that the company follows and is focused on the best way to achieve corporate goals (Yaghtin. Safarzadeh and Karimi Zand, 2020). It does not usually get too involved in business operations and involves more about the company’s overall vision and direction. Business strategy, on the other hand, is focused more on operations and how a particular business segment fits into the company’s overall strategy. It is involved in looking at different customer segments or products and determining the best way to allocate resources. Finally, the functional strategy applies to the individual departments of a company. It involves the specific functions they must perform to help support the business strategy.
An example of a company making effective use of both corporate and business strategy is Airbnb. Airbnb’s corporate strategy is to provide a low-cost and unique way for people to travel and rent accommodations. Their business strategy is focused on product segmentation and niche market identification. They have identified different segments, such as leisure, business, and family travel, and offered them different services. Through their functional strategy, Airbnb created an online platform that allows users to search for and book rental spaces in different locations.
Businesses Relevant to Growth Market Rate Using the BCG Matrix Model
BCG Matrix is a tool used to evaluate businesses in terms of market growth rate and relative market share. A business that is high on both metrics would be placed in the “Stars” quadrant, as it is a strong indicator of possible high returns for investors. A business that is low in market growth rate but high in market share would be placed in the “Cash Cows” quadrant, which can hold its own and generate steady income given its dominant market position. These businesses typically need little investment to maintain their position but have little potential for growth.
Strategies Organizations to Implement to Go Internationally
Organizations implement various strategies at the functional level, each with its own set of characteristics. For example, Airbnb, an online marketplace for people to rent out their homes, uses a strategy focused on resource optimization (Bosma and Doorn, 2022). They do this through their strict home-sharing criteria and review process, their geographic distribution of properties, and their use of data to personalize each guest’s experience.
Another strategy Airbnb implements at the functional level is customer-centricity. They emphasize customer service whenever possible to ensure their guests have a pleasant experience. They have also implemented an automated review process for guests upon checkout, which helps them gather customer feedback on a daily basis. Finally, Airbnb has a strategy focused on localization. They were the first to bring home sharing to the global market and they now offer properties in over 190 countries. They focus on understanding the needs of people in each individual location and tailor their services accordingly.
Overall, Airbnb implements multiple strategies at the functional level to optimize resource usage, ensure a customer-centric experience, and deliver localized services tailored to each individual region and market. The strategies organizations to implement to go internationally and critically analyze its advantages and disadvantages. Airbnb has been an example of how to effectively succeed in international markets. One strategy for organizations wanting to go international that has been successful for Airbnb is localization. This is a strategy that involves adapting products to the cultural preferences, buying behavior, payment preferences, language, and government regulations relevant to each local market.
Advantages of localization include users having a more tailored experience, allowing for better customer experience, higher brand recognition and a better understanding of the local lifestyle. Airbnb has been able to leverage this strategy by localizing key aspects of their platform, such as promoting homey vibes to create an emotional connection with its customers and curating experiences based on locals’ knowledge and interests (Buhalis, Andreu and Gnoth, 2020). Disadvantages of localization include its costly nature, as companies have to build teams in each local market they enter and the need to continuously adapt to changing legal and regulatory frameworks. Airbnb has been able to successfully avoid the pitfalls of localization by having a global team that exists solely to monitor local markets and keep their operations in line with the rules of each local market.
Reference List
Bosma, J.R. and van Doorn, N. (2022) ‘The gentrification of Airbnb: closing rent gaps through the professionalization of hosting’, Space and Culture, pp. 1206-1210.
Buhalis, D., Andreu, L. and Gnoth, J. (2020) ‘The dark side of the sharing economy: balancing value co‐creation and value co‐destruction’, Psychology & Marketing, 37(5), pp. 689-704.
Fleischer, A., Ert, E. and Bar-Nahum, Z. (2022) ‘The role of trust indicators in a digital platform: a differentiated goods approach in an Airbnb market’, Journal of Travel Research, 61(5), pp. 1173-1186.
Wang, Y., Hong, A., Li, X. and Gao, J. (2020) ‘Marketing innovations during a global crisis: a study of China firms’ response to COVID-19’, Journal of Business Research, 116, pp. 214-220.
Yaghtin, S., Safarzadeh, H. and Karimi Zand, M. (2020) ‘Planning a goal-oriented B2B content marketing strategy’, Marketing Intelligence & Planning, 38(7), pp. 1007-1020.