Question

Discuss the importance of environmental scanning and explain how the founders of Airbnb scanned the environment before starting their company. NB: Your answer should be a minimum of 500 to a maximum of 650 words. Markers are to stop marking after the threshold of 600 words has been reached. Please indicate the word count at the end your answer.

Answer 1

From a business standpoint, environmental analysis enables any business organization or company to understand and examine the various internal and external factors and attributes that influence the operational functioning and activities of the organization and the effectiveness of the various business strategies undertaken by the company management or administration. Envionmental analysis is extremely important for any business organization or company to appropriately adjust its business strategies and operational functioning in accordance with the respective changes in both the internal and external environment of business. Now, with regards to the internal environment of business, environmental analysis can assist any organization or company to identify its market strengths and advantages that can provide a competitive edge over its major industrial o market competitors or rivals. Hence, any company or organisation can identify its present and potential market strengths and advantages over its competitors and capitalize on them and mixize those by further improving its existing organizational policies, plans, strategies, etc. Alternatively, environmental analysis is also helpful for any organization or company to identify its market weaknesses which can be capitalized upon by the market rivals or competitors thereby exerting a negative impact on the business performance of the organization. Therefore, identification of organizational weaknesses can enable rectification or improvement of relevant organizational policies, plans, strategies, etc. in order to potentially overcome them or control them. Furthermore, environmental analysis and assessment can also lead to optimal resource utilization by any organization or company by reducing redundancy and waste and optimum use of various existing resources in business operation such as human resource, natural and capital resources. This can consequently lead to higher operational efficiency and optimal and sustainable resource utilization by any organization or company. It can also enable any business organization to achieve long-term growth and survival by emphasizing on and improving its existing plans and strategies by capitilizing on various internal and external business opportunities or advantages and controlling or eliminating the threats. Hence, from an overall perspective environmental analysis can essentially facilitate decision-making process of any organization or firm.

In this context, one of the major advantages or market opportunities exploited by Airbnb which is becoming a leading online marketplace for real estate and rental accommodation properties and facilities, are the changing customer needs and expectations in the real estate market and customer convenience. Much of the commercial or economic success of Airbnb is based on its business mission and objective to offer temporary accommodation facilities and services to the tenants with complimentary breakfast mostly in private residences which would offer a pleasant and homely environment to the tenants and maximize their conveniences. This was evidently an unique business idea initially adopted and exploited by Airbnb founders which hadn't been considered by its industrial competitors or rivals that focused mostly on purely commercial real estate and accommodation services and facilities at the time of its erstwhile implementation. Therefore, the fundamental business idea of Airbnb is based on an initial market opportunity or advantage that subsequently provided a competitive edge or advantage to the company or organization in the industry or market. Furthermore, the company management subsequently changed or modified its existing operational policies to expand its existing services and facilities beyond its core competency or accommodation services to providing additional facilities to its customers or users such as tourism advice and recommendations, booking and planning various tourist activities for customers, organizing guided tours for tourists, conducting cooking classes, and so on. Now, considering the external business environment all of these additional services and facilities provided by the company can be considered as effective capitalization of market advantages and opportunities which have mostly remained unexplored by its major industrial or market competitiotrs or rivals. In terms of the major market threats or weaknesses faced by Airbnb mainly include poor hosts, unsatisfactory and bad services provided to the customers by the hosts, and lack of proper facilities as assured by the hosts. Following negative customer reviews and few customer complaints, the company management has enforced certain sticter policies regarding the legal identity verification and background check of the hosts prior to their enlistment or inclusion as service provider or seller in their website and application. However, one of the major market threats of Airbnb has been relatively higher prices charged for the accommodation services and facilities and this is one area that the company management intends to address adequately. It has been criticized that the rental rates through Airbnb are high as the rental prices in few areas have gone up for keeping the rental properties away from long-term rental market.

  References

https://www.linkedin.com/pulse/8-important-needs-importance-environmental-scanning-business-sharma/

https://www.marketing91.com/swot-analysis-of-airbnb/