Sample Management Essay Paper on Regional vs Global

AIRBNB vs. EXPEDIA

Proposal

Regional vs Global

While exploring this topic, I will consider two types of organizations, regional and global. A regional organization is a firm that operates within a specific limited geographical zone. Regional firms are always geared around supporting its corporate environment. A regional firm is usually affected by the local economy. The firm is usually centrally managed and tends to support the headquarters, and its strategic selling markets. On the other hand, a global organization is a firm that carries out its business all over the world. The firm integrates all of its branches and focuses its entire marketing strategy on the worldwide scale. In most cases, its products are homogenized as a strategy of lowering costs.

To deeply understand how these two types of organizations are managed and carry out their operations, I will consider Airbnb Inc. and Expedia Inc. in various perspectives. Airbnb is a regional firm whereas Expedia is a representation of a global firm. I will consider their environmental coverage, governance, organizations, strategies they employ, and their market performance. As a result, I will ascertain the challenges they are facing and come up with solutions to such issues.

Study Reason/Rationale

The rationale for this study is based upon a job business in the sense that the organizations under analysis are operating and thus accruing income for the ownership. However, these organizations are unique in the sense that they are still in their growth phase. They are yet to achieve their full business potential and matching returns. However, the two entities under comparison and study differ in scope and rate of growth.

Airbnb vs. Expedia

Introduction

            Airbnb Inc. is a regional company that runs an online communal marketplace where people lists, seek, and book lodgings online or from their mobile phones. It allows various people within its operational locality to rent out their showcase and extra space to the public. The company was founded in 2008 and has its headquarters based in San Francisco, California (“Airbnb | L2: Benchmarking digital performance,” n.d.).

On the other hand, Expedia is a global online company that also books airline tickets, car rentals, hotel reservations, cruises, and other various services through a World Wide Web. Expedia Inc. was founded in 1996 by Microsoft. The company facilitates its services via a website where customers can book various reservations.The websites have highly transformed the hospitality industry through making accommodation reservation, travel, and other services more accessible to the public (Edelman,B. & Luca M. 2014).

The two companies offer their services in a more similar way but differs in terms of governance, strategies they employ in accessing services, the environment they covers thereby varying their performances. Although with the current success in their market coverages, Airbnb and Expedia have been experiencing some difficulties in carrying out their day to day operations. Nevertheless, every organization is performing well in their various markets.

Description: Background

            Airbnb Inc. is a private company that has its specialization in the travel industry. Since its advent in 2008, the company has expanded to cover about 34,000 cities across 150 countries. Presently, the company handles over 1.5 million listings. The company owes its roots to a move by Brian Chesky and Joe Gebbia. The duo set out to start the inaugural concept of Airbed and Breakfast during an industrial design conference in October 2007. The entry of other players has served to grow the venture into a far flung business that stretches across a wide expanse of regions and covers a considerably large population of clientele (Edelman, B. & Luca M. 2014).

 Additionally, the company has made a number of collaboration ventures that have led to its characteristic growth and capture of a substantial market segment. These companies include Y Cobinator, Greylock, Sequoia, Andreessen Horowitz, DST Global, General Catalyst and a number of players from University Ventures. These ventures have greatly attributed the company’s growth and control of a considerable market share. As of March 2012, the company has a valuation of 20 billion dollars. This is a result of the outfit’s creative and business knit inventions (“Is Airbnb growing too fast?” n.d.).

Expedia has its origin under the parent company Microsoft in the year 1996. Later, the company was purchased by Ticketmaster in 2001. The company that was to change later names to InterActiveCorp kicked off a number of ventures under the Expedia outfit. By 2005, Expedia Inc. had flung out a number of players under its umbrella including Expedia corporate travel (currently known as Egencia), Trip Advisor, Classic Vacations, Hotwire.com, and eLong, Hotels.com. The company also later bought off a share in the travel metasearch engine Trivago.

The outfit has its offices in Bellevue Washington. The offices are located at downtown in a building known as the Expedia building. According to the company’s first CEO, the name Expedia came into existence by combining ‘exploration’ and ‘speed’. Expedia as a branded outfit operates through 100 points of sale spinning over 60 countries. Additionally, the company operates in collaboration with over 10,000 partners in the travel industry. These include airlines, hotels, high traffic websites, and other consumer brands. These operations run via the Expedia affiliate network powered by their AP interface (“Expedia, Inc. home – Expedia, Inc,” n.d.).

Key Points

Environmental Situation

As noted in the above introduction on these companies, the Airbnb outfit is a vibrant establishment that is based in San, Francisco California. The company has however through the years been able to gain a notable population segment of clientele. The company operates in a large area of over 150 countries. This fact is despite the company having been formed just a few years ago. Thus, it can be gathered that the company is characteristic of enormous, vibrant potential among its players. It has consequently spread to far flung areas in the amount of time that it has been in operation. Therefore, the company is portraying a positive trend towards its coverage area extension (“Airbnb vs. Expedia | Airbnb2015Review,” n.d.).

In comparison, Expedia enjoys a similar far-flung influence on the global platform, albeit on a lower notch. The organization has been in operation since its advent in the year 1999. It is thus practical to note that its progression and spread of business has taken a slower pace than its comparison. In line with this argument, the results that have been achieved in the country of operation and the overall customer reach is relatively lower. It can thus be said that the company contain a relatively lower environmental influence when compared to Airbnb. The same is in line with the spread noted; that is over 60 countries (Edelman, B. & Luca M. 2014).

Aspects of Governance

In an article by Boerner, H. (2015) on the practical aspects of corporate sustainability, it was noted that a large segment of the population was embracing the aspect of new brands. For instance, Airbnb has been able to achieve leadership by disruption of the old business models in the hotel business. The sustainability of existing players has thus been subject to the threat of these new entrants due to the value that the customers are tending to place on disruption pricing. This aspect has played a role in the current state of Airbnb that has been noted to be a new entrant in the hotel business. Therefore, the strides that the organization has taken so far are as a direct effect of the good governance skills that have been inputted (“Airbnb | L2: Benchmarking digital performance,” n.d.).

In line with the research study above, it can be gathered that the established companies struggle to cope up with the development that take place with time. Their survival is largely dependent on the measures that are put in place in line with these developments. It can be thus said that the fact that Expedia has been in operation for a similarly long time since 1999 places it in a similar situation. The challenges that face a company battling with change and the competitive effect of new entrants are playing a role here. Therefore, Expedia’s policy has not been able to match its business prowess with that of its comparatives in business. In summary thus, its performance in the aspect of governance and its effect on the business process is ranked lower than the comparison above.

Organizational Strategy

The performance of a business and the achievement of its set out goals and objectives is largely dependent on the plans laid out on the same. Proper plans are attributed to resultant progress in the right direction in regard to the objectives of the organization. As has already been observed, the aforementioned companies have been able to achieve varying degrees of success within the predetermined durations of time that have been observed. Coordination and sense of common direction are important, especially in a vast and widely spread organizational setup. The nature or course of progress made in an organization is dependent on the decisions made and subsequently implemented by the managerial or leadership helm of the company.

Talking of Airbnb, the company has been able to grow to achieve a valuation of approximately 20 billion dollars. Most of these successes can be attributed to the measures that have been put in place by the leaders of the corporate. The role played by the initial players in the advent of the business are specifically important in this case. Their policy and way of operation serves to impact the results achieved. One aspect of organizational strategy that is greatly attributable to the success achieved is the manner of partnership. The company has over time partnered and received funding from a number of institutions. These grants and sources of supplementary funds have served to create growth and sustainability in the organization.

There are trends that can be noted in the strategy implemented by Expedia as an outfit. The company’s growth over time has been largely attributed to its acquisition of similar profitable brands in the same line of business. The current state of the company can be defined by these strategies and attributable moves that have been employed by the organization. Also important to note is the fact that these strategies are as a result of decisions made by the players in the organization, who are the leaders. Some of the acquisitions have served as a major break for the company and can be attributed for the strides made thus far. However, there are a number moves that have impacted the organization negatively too.  In 2011, one of the subsidiaries in Expedia was involved in a major tax row that cost the company about 6 million dollars. Some of these factors represent the negative detriment of the organizational strategy implemented (“Expedia Inc. – AnnualReports.com,” n.d.).

Organizational Performance

            The manner in which a company is operating and fairing in its relevant market is dependent on the measures put in place to ensure and ascertain this performance. Performance is rated based on the achievement of set goals and objectives. As thus, it is important for each organization to ensure that its set out goals and objectives are adhered to and thus achieved. A measure of organizational performance is used as a gauge and threshold when making a comparison with competitors and similar players. Performance is measured on the basis of the results and returns achieved by the organization. This measure is thus an important tenet that tends to guide competition among peers.

            The performance of Airbnb can be gauged based on the results that have been achieved so far. As noted earlier, the company has been able to achieve a 150 countries outreach since its advent. The same can be noted on its overall population outreach that is a reasonably large number too. This kind of results are not achievable without the input of matching effort aimed at this given end. The organization can also be said to be performing well, considering the amount of growth that has been achieved within its period of operation. Also important to note, apart from the global outreach and tremendous strides that have been made within this period of existence is the valuation amount that has been estimated to be the company’s worth. The same too is a measure of the company’s performance. Therefore upon considering all these proceedings, it’s explicit that Airbnb is currently performing well in the market (“Airbnb | L2: Benchmarking digital performance,” n.d.).

            In the case of Expedia, performance can be said to be average but not in line to match the amount of time that that outfit has been in operation. The number of years that the company has been in existence widely outweigh the strides that have been made so far. It has been noted earlier that the level of performance is largely determined by laid out policies and the prevailing conditions on the ground. In comparison with the above-mentioned company, Expedia has not been able to achieve a similar market share and business prowess, despite the position that the company is at currently. It can thus be said that the conditions underlying have resulted in the outplaying of the company and thus its relatively lower level of performance in its line of business. Relevant intervention is required to match this void and bridge the gap between the two levels (“Expedia Inc. – AnnualReports.com,” n.d.).

Issues and Problems

            It can be in summative said that there are a number of issues that serve to influence the performance and progress of an organization in a dynamic business set up. In this particular case, the prevailing situation and measures put in place have served to influence the current position of the named companies regionally and globally.

In the same way, there are factors that have served to hinder growth too. The dynamics that lead to the survival and growth of one business may on the contrary result in the dismal performance of another. For instance, we have noted the effect of new entrants to the survival and coping of the existent players. It seems that the entry of new players and changes with time led to a competitive outplay of Expedia. Thus, its level of performance of a lengthy period of time is unmatched with the effect created by Airbnb that has been in existence for a considerably shorter duration of time (“Expedia vs. Airbnb customer experience @ Pissed Consumer,” n.d.).

Discussion

                Some of these influences highlighted above have played a positive role and thus served to favor thrive of business practice and spread to other global areas out of the sphere of advent. These factors have majorly favored the growth and spread of Airbnb within the short period in which it has been in operation. There are inherent characteristics in the company that have worked to favor this growth. Expedia on the other hand is seen not to cope up with the trends in its market.

Way Forward

                A company needs to identify the areas that need work in order to make changes, remain competitive and achieve growth. The areas that need work in order to achieve performance are put into consideration. These measures further need to be in line with the prevailing conditions on the ground it at all they are to be realized. Additionally, the mix of factors in play differ depending on the company and its underlying situation. Therefore, the company’s factors need to be explored to before an amicable strategy can be devised.

Conclusion

            Business is prone to the effect of market forces. These shifts that aid to guide the progression of business can be predicted and studied to determine their occurrence, nature, and subsequent effect. Therefore, in the course of business operation, it is important that that players and decisions makers pay regard to the same and incorporate them into the formulation of strategy. In such a way, unforeseen and unpleasant occurrences are predicted and mitigated. This is the key to prudent business practice.

References

Airbnb vs Expedia | Airbnb2015Review. (n.d.). Retrieved from https://airbnb2015review.wordpress.com/2015/07/07/airbnb-vs-expedia/

Airbnb | L2: Benchmarking digital performance. (,m, n.d.). Retrieved from http://www.l2inc.com/tag/airbnb

Boerner, H. (2015). January | 2015 | Sustainability Update. Retrieved from http://ga-institute.com/Sustainability-Update/2015/01/

Edelman, B., & Luca, M. (2014). Digital discrimination: The case of Airbnb.com. Retrieved from http://www.hbs.edu/faculty/Publication%20Files/14-054_e3c04a43-c0cf-4ed8-91bf-cb0ea4ba59c6.pdf

Expedia Inc. – AnnualReports.com. (n.d.). Retrieved from http://www.annualreports.com/Company/expedia-inc

Expedia vs Airbnb customer experience @ Pissed Consumer. (n.d.). Retrieved from http://www.pissedconsumer.com/compare-companies/airbnb-vs-expedia.html?hash_order=expedia-vs-airbnb

Expedia, Inc. home – Expedia, Inc. (n.d.). Retrieved from http://www.expediainc.com/

In Pederson, J. P. (2014). International directory of company histories. Vol. 148. Detroit, Mich: St. James Press.

Is Airbnb growing too fast? (n.d.). Retrieved from http://blogs.reuters.com/small-business/2011/07/01/is-airbnb-growing-too-fast/

Ribbers, J., Kapadia, H., & Airbnb, Inc. (2014). Get paid for your pad: How to maximize profit from your Airbnb listing

Why Expedia isn’t taking on Airbnb: Travel giant still searching for ‘magic bullet’ in sharing economy – GeekWire. (n.d.). Retrieved from http://www.geekwire.com/2015/why-expedia-isnt-taking-on-airbnb-travel-giant-still-searching-for-magic-bullet-in-sharing-economy/