Question

How does Airbnb create new demands? How does Airbnb create new way of supply? Give me some explanations.

Answer 1

Ans) Airbnb is company whose website permits ordinary people to rent out their residences as tourist accommodation The foremost factor that results in the increase in demand is innovation which relates to how products that lack in traditionally favoured attributes but offer alternative benifits can over time transform a market .Airbnb 's business model is built around modern internet technologies and it's cost - savings household amenities are the forces of increasing demand : Air BnB can be related to three prolonged strategy : Creation of new sources of supply : Creation of new user behaviour on the demand side for example travelers would trust staying at stranger's apartment hence AirBnB brought new behaviour.There is also a strong curation system which the company created and invested in the mechanism .For the supply side: AirBnB Create new sources of supply that has never existed before as no one would have imagined travel accommodation in the houses of people living in the cities ..If a house or platform finds greater adoption among the consumers it attracts the mainstream producer as well as a result producer here home or platform quality increases and ultimetly business grows.