Airbnb Strategy Study

2234 Words Apr 12th, 2013 9 Pages
Airbnb vs. Premier Inn: the rise of “collaborative disruption”
Peer-to-peer consumption is on the rise. Many companies are now leveraging the phenomenon of “decreased barriers to interaction” brought about by internet and social networks to help their users rent each other’s houses, cars, parking space, cooking skills and much more. Airbnb allows users to rent out their idle living space (couch, room or their entire house) to generate extra revenue. By providing people seeking accommodation with an alternative to hotels, Airbnb’s platform also directly competes for a chunk of the hotel hospitality business. In this essay, we will argue that Airbnb will continue being a successful business, possibly at the expense of incumbents focused on
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If we look at Premier Inn’s strategy through the lens of Porter’s3 article, it appears that Premier Inn is a classic case of a company that doesn’t have a clear-cut strategy. Firstly, the company has recently been changing focus in its adverting, going from promoting its aggressive pricing to “guaranteeing a good night”4. Second it has no clear set of differentiating activities, simply using benchmarking and operational effectiveness to keep up with competitors. As Porter5 (1996) argues, operational effectiveness is not strategy. This has resulted in a competitive convergence with rivals such as Travelodge UK, where offering are exactly similar. As an undifferentiated competitor, with price sensitive, being undercut can seriously hurt Premier Inn’s business. Although it has faired relatively well compared to its competitors, Premier Inn has been hurt by the crisis6.

1 Although

Airbnb is a platform, and as such also competes with companies such as booking.com, I chose to focus on Airbnb’s impact on a hotel chain such as Premier Inn since the scope for

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