Abstract
The following research is a literature and case review focused on the characteristics of the Millennial Generation and their importance as consumers, through a case study of the company Airbnb as an example of a disruptive business model that has been able to capitalize on this generation. The structure of the work is the following: Firstly, the authors contextualize the research by defining the key topics, such as collaborative economy, strategic advantages, the millennial generation. Then they discuss the history and strategies of the company Airbnb, as a disruptive and successful business model, explaining their general strategy and challenges they have faced, as well as their strategy specifically geared towards the Millennial niche. Finally, they conclude on the importance of disruptive business models and the challenges that companies like Airbnb are facing and will have to face in the future in order to continue in the market. The main contribution of this research is the analysis of Airbnb's strategies as they grow as a company and focus their efforts on the Millennial Generation in order to ensure their survival in an important and long-established market.
TopMethodology
We use an analytical and descriptive methodology for this literature review, given that the main objective is to present a theoretical framework for the company, its origin, processes, business model, market strategies and how this all relates to the Millennial Generation.
We also present information from the peer reviewed literature on the theoretical concepts, such as collaborative economy, disruptive business strategies, the characteristics of the Millennial Generation as consumers and the challenges faced by companies in order to satisfy them.
For the case study, we searched for official information on Airbnb’s website, as well as official reports, magazine articles and peer reviewed literature.
We also discuss the development of customer service on housing issues and the philosophy that has taken the company further, that, in the words of one of its co-founders, Brian Chesky, Airbnb is more than just renting an accommodation space (Chafkin, 2016).
Once we comment on the benefits of this business model, we pretend to analyze the problems the company has faced, such as strong opposition from the traditional hotel industry, that perhaps initially did not see this phenomenon coming. Eventually it became clear that they needed to take action on the matter. Also, it is important to mention issues that hosts have faced and, together with the company, have had to solve, such as user confidence in the aforementioned community economy, regulations on matters of law on tax payments on the host, given that it is an informal economy, destruction of property, etc.
Key Terms in this Chapter
Millennials: Each member of the Millennium Generation or Generation Y, a group that integrates people born between the beginning of the 1980s and the beginning of the 2000s, is called millennial. Other properties attributed to them Millennials are discontent and distrust.
Business model: It is a tool prior to the business plan that will allows companies to clearly define what business they are going to offer the market, how they are going to do it, who the business is going to sell it to, how it is going to sell it and how it is going to generate income. It is an analysis tool that will let the business know who it is, what it does, how it does it, at what cost, with what means and what sources of income it will have.
Disruptive: It is a term used to name what produces a sudden break. Usually the term is used in a symbolic sense, in reference to something that generates a very important or decisive change (regardless of whether that change has a physical correlation).
Strategy: It is the orientation or alignment given to resources based on the dominant forces in their environment to obtain advantages.
Collaborative: Collaborative work is one in which a group of people intervene contributing their ideas and knowledge in order to achieve a common goal. In this sense, it is a more flexible way of working that allows the achievement of different results (not necessarily better) than teamwork.
Airbnb: Airbnb is a community market that serves to publish, advertise and reserve accommodation economically in more than 190 countries through the internet or from your smartphone. It is based on the “Bed and Breakfast” mode (where the “bnb” comes from).
Economy: Science that studies resources, the creation of wealth and the production, distribution and consumption of goods and services, to meet human needs.