In a business organisation there are a number of functions that are followed on a daily basis. The operations of the business are aimed at achieving the objectives that are set in consideration with the strategic management decisions. Marketing is one such function of the business organisations that are aimed to connect with the customers and create products and services aligned with the needs and requirements of the customer. Marketing not only helps in building products and reaching out to the customers it also helps in identifying the market. The function helps in creating value for the company. There are a number of concepts that are developed over the years by scholars to assists the management of business organisations to take strategic decisions. Concept of marketing mix, Branding, segmentation, positioning, value proposition etc are some of the concepts that are used. It is one of the most important functions of the company as it is directly related to the revenue that the company earns through sales. This report will analyse the marketing strategies of Amazon Inc and AirBnb.
Section 1: Amazon Inc
Amazon Inc which is a company that operates in the retail as well as in the information technology industry. The organisation was established by Jeff Bezos in 1994, the company is headquartered in Seattle, Washington. Over the years of operation the company has seen an enormous growth earning the CEO the title of the world’s richest man in 2017 (Ritala et al. 2014). The aim of the company is to provide the customers with a simpler life and thus the organisation invests a significant amount of money in research and development of products and services. However in the case study the marketing strategy that is going to be discussed is the decision of following a Coopetition-based business model (Ritala et al. 2014). Amazon has over the years brought about some ground breaking innovation in the retail as well as in the IT sector making setting important benchmarks for the competitors. However, the company also follows significant innovation in the process of business as well. The strategy that is discussed in the case study is regarding the collaboration between competing firms and how this strategy has helped Amazon gain from it (Ritala et al. 2014).
Section 2: Airbnb
AirBnb is an organisation that operates in the Tourism Industry. The company was established in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk. The headquarters of the company is in San-Francisco California (Oskam and Boswijk 2016). The service that the company provides is associated with lodging and the idea is to help the customers experience the place form a local perspective and thereby enjoy to the utmost. The service of Airbnb can be availed by using their website as well as there are mobile applications on various platforms. The marketing strategy that the company undertakes in order to connect with the customers is aligned with their vision for the business, they focus on the place the customer is looking to visit and offers accommodation that would make them feel like home and not tourists (Oskam and Boswijk 2016).
Evidence of Marketing-related success
For the case of Amazon.Inc, the company follows the strategy of innovation in the order to achieve competitive advantage; this innovation is not only introduced in the product or service but is also associated with the process of business as well. Amazon has a number of competitors based on the industry of the service, there are three segments: Amazon Marketplace, Amazon Services and Web Services and Amazon Kindle (Ritala et al. 2014).
In the marketplace the company offers the competitors a platform to list their products so that the customers are able to use the Amazon platform to buy the product. For example a vendor wants to sell a book using the platform of Amazon the same book is also listed with Amazon itself then the customer has the option to choose from the person who is listing the lowest price. In this case the company will earn a portion of the sales proceed from the vendor as well (Ritala et al. 2014).
For the web services segment, Amazon provides service to a number of competitors like Borders book and entertainment platform such as Netflix in order to provide web services. These are some of the platforms that have used the web services of Amazon in order to establish their marketplace. In such collaboration there are often contracts and revenues associated for the services that are provided, being competitors does not stop Amazon to collaborate and support other companies in providing their services. This is a strategic business relationship that helps Amazon to maintain their revenue and sales (Ritala et al. 2014).
The last segment that is discussed in the case study is the kindle. Amazon distributes its content to various competing platforms with the help of the mobile Application and the kindle website. For example a person who is using a mobile tablet powered by Android can download the application from the Google play store make the account and sign in to use the service of Kindle without having to buy the product. There are some of the features that are exclusive to the product which will not be available in these platforms; however the company will earn revenue each time a customer will use the service or will download the application on their device (Davcik and Sharma 2015).
In the case of Airbnb, the competitive strategy that has been identified is the service that the company offers. The strategy is to offer the customers with a service that is no other organisation in the company does. Airbnb is a company that operates in the shared economy where the company offers platform for others to do business and earn shared revenue (Davcik and Sharma 2015). There are a number of organisation in the internet platform that offers the customers with list of accommodation but what makes Airbnb stand out of the rest is the fact that it let’s individual hosts list their property in the website which can be viewed by the customers while looking for a place (Davcik and Sharma 2015). For example, a customer is looking for an accommodation in Paris, he or she can choose from the list of hosts to live in their property for a particular duration. Hence the strategy can be said to be innovation (Ikkala and Lampinen 2014). The company follows the principle of providing the customers with a unique experience during their vacation (Oskam and Boswijk 2016). The case study indicates that visitors want to experience the places they are visiting from a local perspective and living among the localities provides a wholesome experience in the process. The listing in the website ranges from tree houses to castles. The website offers such listing of accommodation in more than 190 countries all around the world. In order to ensure a complete security, the company runs a check on the hosts who want to list their properties with the organisation not only that there are also numbers of safety protocols for the hosts as well. This makes Airbnb one of a kind company in the tourism and hospitality industry. The success of the strategy is in the revenue of the company which is around $2.6 billion in the financial year 2017. The company has adopted a brand image of providing the customers with a overwhelming homely experience during vacation (Oskam and Boswijk 2016).
Analysis and Explanation
The evaluation of the marketing strategies can be performed with the help of the Ansoff Matrix framework.
Figure: Ansoff Matrix
(Source: Hussain et al. 2013)
From the case study it has been derived that the Amazon has a market development strategy. The products and services remain same however, the market is new, and the strategy that has been discussed is called platform strategy (Cameron and Crawley 2014). This is an approach where the company chooses to expand the business by offering other organisations a platform to build their own market place. There is shared revenue in the process. This process has enabled the company to earn revenue from the competitors itself and thus ensuring the revenue of the business improves (Hussain et al. 2013). The company has over the years introduced a number of innovations in the service and has pioneered in the online retail market place, but the case study focuses on the process innovation that is brought about with collaborating the operations of the business with the competitors (Davcik and Sharma 2015). Competition in the market is viewed as a threat as it takes away from the revenue of the company.
However, for Airbnb the competitive strategy that the company has undertaken is product development. The company has come up with a unique service that is not present in the industry, and thus it can also be said that the strategy of their competitive advantage is innovation in the products (Aziri and Nedelea 2013). There are a number of organisation that offers the customers with accommodation listing but what sets Airbnb aside is the fact that they let local people lent their place for tourists and this strategy of service is what gives the company an edge over the others who only list hotels or guest houses for accommodation (Quattrone et al. 2016). Thus the focus of the company is on the marketing mix, specifically on the product or service mix (Hussain et al. 2013).
Conclusion
IT can be concluded form the above discussion that both the organisations have their own competitive strategy undertaken based on the resource and capabilities that the company has as well as the dynamic factors in the external environment. The platform strategy of Amazon which is discussed in the case study enables the company to gain an edge over the competitors by offering them opportunity to grow. On the other hand the innovation in the product strategy enables Airbnb to stand out from the rest of the companies in the same industry.
References
Aziri, B. and Nedelea, A., 2013. Business strategies in tourism. Ecoforum Journal, 2(1), p.1.
Cameron, B.G. and Crawley, E.F., 2014. Crafting platform strategy based on anticipated benefits and costs. In Advances in Product Family and Product Platform Design (pp. 49-70). Springer, New York, NY.
Davcik, N.S. and Sharma, P., 2015. Impact of product differentiation, marketing investments and brand equity on pricing strategies: A brand level investigation. European Journal of Marketing, 49(5/6), pp.760-781.
Hussain, S., Khattak, J., Rizwan, A. and Latif, M.A., 2013. ANSOFF matrix, environment, and growth-an interactive triangle. Management and Administrative Sciences Review, 2(2), pp.196-206.
Ikkala, T. and Lampinen, A., 2014, February. Defining the price of hospitality: networked hospitality exchange via Airbnb. In Proceedings of the companion publication of the 17th ACM conference on Computer supported cooperative work & social computing (pp. 173-176). ACM.
Kaplan, R.A. and Nadler, M.L., 2015. Airbnb: A case study in occupancy regulation and taxation. U. Chi. L. Rev. Dialogue, 82, p.103.
Oskam, J. and Boswijk, A., 2016. Airbnb: the future of networked hospitality businesses. Journal of Tourism Futures, 2(1), pp.22-42.
Quattrone, G., Proserpio, D., Quercia, D., Capra, L. and Musolesi, M., 2016, April. Who benefits from the sharing economy of Airbnb?. In Proceedings of the 25th international conference on world wide web (pp. 1385-1394). International World Wide Web Conferences Steering Committee.
Ritala, P., Golnam, A. and Wegmann, A., 2014. Coopetition-based business models: The case of Amazon.com. Industrial Marketing Management, 43(2), pp. 236.
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