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ZCMD6221

GLOBAL MARKETING
GROUP ASSIGNMENT
PREPARED BY
AIRBNB
ANUSURIYAH BALAN ZP02519
VINOTHINI RATNASAMY ZP02529
( SWOT RAJESWARY PERICHIAPPAN ZP02533 ANALYSIS
& TOWS JEEVA ELLAPILLAI ZP02534 MATRIX)
TAN EE LYN ZP02635
& ZAINAB BINTI IDRISZP02569
RATNARANI SELVACHANDRAN ZP02606
UBER
(WHAT IS THE
PREPARED FOR
TUAN SYED UZAIR BIN SYED OTHMAN
11.5.2017
IMPORTANT LESSONS IN GLOBAL MARKETING?)
AIRBNB SWOT ANALYSIS AND TOWS MATRIX

Strengths

An excellent customer-centric service operating 24/7. This is clearly visible as Airbnb offers
additional benefits for hosts and travelers. Hosts can meet people from around the world
while making a little extra money. Airbnb is also distinguishable from other service provider as
they can guarantee safety for their hosts with a one million dollar insurance coverage per
booking. They also have dual rating system which is very important to ensure the safety for both
the host and traveler as well. Airbnb also manage to give high level of confidence to their
customers in booking and payment processes. They provide their users with a user-friendly and
visually attractive website, and truly customer-oriented customer service. Another strength of
Airbnb is having an enormous variety of listings. Airbnb currently has over 800,000 listings in
33,000 cities in 192 countries. This criteria is causing this company to grow rapidly and the good
name that it has created for itself has a snowball effect where it transformed it into a strong and
recognizable brand worldwide. This successful organization not only attracted many users, but
they have also attracted many investors. Till now, Airbnb has received six rounds of venture
capital investments, totaling to more than USD 794 million which is approximately USD 100
million per year it has been in this business.

Weaknesses

Airbnb faces regulatory problems in places like San Francisco, where the local government is
worried about the company's side-effects on the housing market. Opponents including the
lobbyists from the hotel industry are fighting against this concept as it is disrupting their
livelihood. Airbnb is operating, aware that it is violating the zoning laws which prohibits people
from running a business, hostel, or hotel in a residential area and laws requiring hosts to pay a
hotel tax. States like New Orleans and San Francisco have investigated Airbnb hosts for
violating zoning laws or the terms of their leases. Another example of violation of law is that
New York City sued two hosts for running illegal hotels in empty apartment buildings that they
owned which caused Airbnb to be accused of driving up rental prices by increasing the citys
scarcity of housing. Some Airbnb hosts have come under fire for not renting out spaces to
people of certain ethnicities. As an example, previously there was a customer that wanted to rent
a room. This customer was of Asian descent. However, when the day came, the host actually did
not let the woman stay there as she is an Asian.

Threats

WhendoingbusinessespeciallyinsharingeconomicGlobally,legalissuessurroundingtaxes,
healthandsafetylawsarebeenusedtodiscreditAirbnb.Taxchangesacrosstheglobalareone
ofthemainfactorsthatmightdeterthegrowthofAirbnb.

Oncethebusinessismadeknownandthereisclearevidencethatthebusinessbringincomeand
benefitstoconsumers,therearecompaniescopyingthebusinessmodelandservicesprovided
byAirbnb:9flats.com,wimdu.com,clickandrent.com,travelrent.comandtvil.ru.asitiseasyto
copythebusinessmodel.
Thereisalsothreatscomingfromthebadnewsthatsorroundsthedestructiontorentershome
androomsandaprtments.Mostofthetimestheyarethebadactorswhospreadbadandhorror
storiesofsharingaccomadationwithstrangers.Besidesthebadactors,socialmediaalsopost
horrorstoriesorexperienceswhichgoviralinashortperiodoftime.

Thebusinessmodelusedis newandunforeseenissues areappearingregularly"thesharing


economy exists in an "economy sandwich",a gray area located somewhere between less
regulatedprivateownershipandhighlyregulatedpubliccommerce."

Opportunities

Facingwiththetougheconomicclimate,travelersarealwayslookingforthebestdealsavailable
atthedestinationtheyplannedtogo.Airbnboffersalotofoptionsfortravelersandtheunique
advantage of experiencing the 'real' culture and society at the destination host. In addition,
Airbnb has the power to define the rules for new business model in sharing economyas a
pioneeringcompanywhoprovideplatformforthisbusinessapproach.Airbnb'sperceptionis
consideredcool.Airbnboffersauniquealternativetotraditionalrentalsandaccommodation

ItisanopportunityfortheMobiledeviceindustryasusagecontinuestoriseexponentially(44%
growthperannum).Airbnbmobileappprovidesaconvenientwayfortravelerstomakeshort
termrentals.ThisalsoenhancedGlobalreachthroughinternet

SincetherearemanyothercompaniescopyingtheirbusinessAirbnbhaveanopportunityto
differentiatethemselves byofferingothergoodsandservices.e.g.Homecleaning,insurance,
travelguides,userssuggestions,partneringwithAirlinesetc.ThisalsoencouragelocalCity
partneringwithtourismguidesandservices.

TOWS Matrix

Below is a simple table for easy reference of the TOWS matrix.


Opportunities: O1, O2, O3 Threats: T1, T2, T3

Strengths: S1, S2, S3 Invest in infrastructures Make the company


to countries in which it appealing to prospective
operates. (S1, O1) customers through
reviews of previous
Penetrate markets in the
guests (S1/T1)
Southeast Asian
countries by inviting Provide incentives to
new Airbnb hosts (S1, new hosts to increase
S2; O2) the number of Airbnb
(S1,S2/T1,T2)
Provide incentives to
new Airbnb guests so Provide continuous
that they will be enticed audit to the companys
to avail the services resources so to maintain
provided (S3/O3) confidence of Airbnb
hosts and clients as well
as the regulatory bodies
(S3,/T3)

Weaknesses: W1, W2, W3 Invest in countries, Hire the best lawyers


especially in Asia where that will defend the
there are no legal company from
impediments in the regulators (W1, T3)
hosting services (S1, O1,
Provide disciplinary
O2)
actions to hosts/guests
Introduce a campaign that practice
where Airbnb discrimination - which
hosts/guests are against may result to their
discrimination and make delisting in the
sure that for all company. (W2, T1, T2,
applications as guests, T3)
there should be a non-
Integrate the services of
discrimination
the company with other
agreement. (S1, W2)
service providers such
as airlines, travels &
tours, etc. (W3, T2)

Under strengths-opportunities, Airbnb should try to penetrate markets in the Southeast


Asian countries by inviting new Airbnb hosts from these countries. As a lot of travellers from
Europe and fellow Southeast Asian countries like to travel, Airbnb can increase their availability
in these countries as well as in the Europe. Airbnb also can provide incentives to new Airbnb
guests so that they will be enticed to avail the services provided. Investing in infrastructure in the
countries it operates will also be a great idea as it will enhance the designated qualities by
Airbnb.

In weakness-opportunities, investing in countries like Asia where legal impediments is


not too strict in the hosting services will be a great opportunity as the host will not need to worry
much in applying for licensing. Despite with all the racism happening around the world, it is also
advisable for Airbnb to display themselves as neutral as possible to prevent any worries for the
guest whom is travelling and to hosts that are providing this services by agreeing to follow its
non-discrimination agreement.

As for strength-threats, providing incentives to host that introduce this platform to


another new host will help to increase the number of Airbnb host around the world. No doubt in
service industry there will often be feedbacks, but Airbnb make it as part of their strength by
making it compulsory for every host and guest to write a review in each of their stay and hosting.
This will also ensure the quality assurance provided by both parties.

Lastly, for weakness-threats, having the best lawyer in town may be the most important
element in this business to defend and protect the company from all the regulators around the
world. It will also be helpful to implement disciplinary actions on host or guest that has violated
the rules and regulations that strictly prohibits any practices or acts of discrimination. Engaging
and integrating the Airbnb services with other service providers such as travel and tour agencies,
airlines will also advance the business in a mass scale.
UBER
WHAT IS THE IMPORTANT LESSONS IN GLOBAL MARKETING?

In recognition of the threat posed by second movers into the market, Uber has been
aggressive with its growth both domestically and internationally. Since launching in 2010, Uber
has expanded its reach to include cities in 26 different countries. Ubers expansion has been met
both with excitement and major blocks resulting from lawsuits, technological limitations and
government regulation. Ubers branding and utilization of mobile technology has made its
solution to transportation headaches more than successful. As an illustration of just how massive
the companys growth has been, Uber has reportedly created over 160,000 jobs in the United
States alone and plans to create over a million more in the next five years. In 2014, it raised
over 60% of all funding going to on-demand startups. But while Uber is often held up as a
remarkable case study on the potential of growth hacking, the company has also faced some
serious challenges stemming from the short cuts its taken.

As a result, there are important globalization lessons to take from Ubers growthboth
successes and mistakes as explained below:-

1. Business Model INNOVATION

Business Model Innovation is finding new and better ways to create value for customers and
extracting value for firms as well as their business partners such as distributers and suppliers.
Value creation requires investments in assets and capabilities that can be leveraged to provide
better customer solutions and simultaneously provide sustainable competitive advantages. Value
extraction strategies also require balancing and/or trading off between profitability, growth and
risk. A company may forgo short term profitability to grow market share that, if defendable, can
provide higher levels of longer term profits. It can reduce risks by enhancing customer
experience and engagement or through product innovation and differentiation.

Business Model Innovations require finding new and better ways of creating and extracting
value. Uber outsource tangible assets (car and home ownership) and focus on managing
relations with two types of customers (vendors and users of services) by investing in technology
to enable relationship management. Their return on assets (ROA) can therefore be higher as
they are asset poor when it comes to investments in tangible assets such as cars and homes.
But, they are rich in intangible assets (customers, brands, intellectual property) which are not
represented on the balance sheet.

2. Value Creation Process innovation, renovation & continues improvement


and integration
value creation is due to innovation on all three dimensions; renovation and integration
brought together in one firm Apple. Samsung adept at semiconductors and display technology
integration as well as integration of customer-facing process (design, supply-chain and
marketing) integrations. It is another firm that has excelled on several dimensions keeping cash
registers pleasantly ringing across global markets. Lesson to note here is; a firm could attain
exemplary performance if it strives to excel on all dimensions through consistent innovations.
This increases hurdles that competitors have to clear to gain competitive advantage and therefore
creates market positions that are more sustainable. Of course, companies need to maintain
leadership in geographical markets.

3. Anticipate the future, invest in growth markets

Uber entirely based on online with all the transactions made through the application. This
means that there is no shop front-business is purely conducted via a smartphone. While a
completely online business is not possible for all organisations, Uber is a great example of
entrepreneurs utilising the technology of modern times. The online world will only continue to
grow, with companies such as Uber setting the trend of business via applications.

In the business context, Uber need to be where the action is. Now the action is in the Asian
Market. So anticipate and learn from the future. It is easier to capture share in growing markets.
Incumbents tend to protect their home turf when markets and margin share shrinking.

4. Collaborate to compete

Collaboration with competitor, appears to be the new age paradigm. Uber collaborate with
advertising companies to promote and marketing their products. At industry level this
phenomenon, referred to as competition, enables Uber to sustain and grow as You cant win on
your own . For example, In India before Uber, call taxi company is well established. Uber
collaborate with this company in terms of sharing the information and guidelines before compete
with them in order to sustain and succeed their business.
5. Even big companies start small.
It might be hard sometimes to believe that companies have small background when it was
started but it was not a big deal for Uber. About 5 years ago, the company created with only 4
person in a team in San Francisco. Sometimes it is very hard for us to predict what is the future
would be. At the same time, we also could not guess that this would be something else in our
coming years but it will happen. Launching a company is not always glamorous. But tough time
do not mean it is end of the road.

For instance, even Uber have competitors, still the company runs as normal with the
existing features and now it is one of the popular transportation globally. Moreover, most of the
users or riders prefer Uber in order to go to one pace from another. Moreover, it does not
important how big size is the company but the preference and services offer is the most
significant for a business. Therefore, we have to keep our head down and push for what we want
in order to achieve and be someone in future.

6. Give people better and cheaper option


During current era, Uber has experienced such as astronomical growth. This is because
consumers are driven by the convenience and price. Besides, many people doesnt own a car to
travel. Therefore, they would prefer taking public transports. By taking Uber, consumers can get
from Point A to Point B very fast. Besides that, Uber is also most reliable way to get from one
place to another with short span of time.

For instance, if we compared to Cab Car (Taxi), Uber is much cheaper. Uber is half the
cost of Taxi and when we factor in parking, insurance as well as maintenance Uber is cheaper
than owning a car. This is also one of the reason why many people choose Uber service.
Moreover, the quality and friendly drivers also can be an attraction for Uber users. Customers
need has been fulfilled with cheaper cost with reliable service and good quality will help a
business to grow and solve our consumer needs in most efficient and convenient way.
7. Grow Global but think Local
Uber grow globally but adapt to local needs. The key to going global is focusing on the local
market as the most important unit. For an example, everything with Uber is based locally: from
the driver to the rider to their destinations. The app needs to reflect over 450 cities unique
language and cultural needs. As a result, Ubers localization efforts go beyond the basics, to
adapting their app to dialects within a city, culture, habits, and unique needs of their international
consumer-base. Important key point shows how Uber successfully puts the local on localization

1. Language
2. Visual cohesion matters
3. Build trust at the local level

8. Differentiation and branding strategy


The UBER app keep it simple. It is not a complicated app to use. Even a first timer know, what
to do next. The simple step makes a lot of customer to download the app and used. Its localized
based on the country and customized as per customer. Uber give importance to customer
perceived value which is important to customer satisfaction. The competitive advantage of Uber
are flexibility, cost and quality. This make Uber look different from other taxi App.

Other than that, Uber keep improving the products and marketing strategy to attract more
customers. For example, from normal Uber product keep develop and come up with UberX and
UberBlack and UberSUV. So, customer have choice to choose the ride. Not like a normal taxi
ride. Different and simple marketing event handled by Uber to attract and make pupils to
remember Ubers service. From Uber case study, globalization is very important and its must
take place in order to successful. Below points must take it very seriously for the globalization
such as

a. Always must specify the countries involved in business


b. Paying enough attention to Internal Data
c. Adapting sales and marketing channels
d. Adapting the product offering
e. Letting local teams lead the way
f. Thinking through the global logistics