SWOT & STEEPLE Analysis: AirBnB (DP IB Business Management)

The term ethical factors refer to the moral principles that govern decisions and actions within a business [1], including environmental and social responsibility, transparency and respect for workers' rights [1].

• Define questions require you to provide a full definition that demonstrates good knowledge and understanding 
  

• Examples are a good way to do demonstrate good knowledge and understanding
  

• The model answer is awarded 2 marks because provides a clear definition of ethical factors with examples.

• Advantages of SWOT analysis include

  • Logical structure which is easy to understand

  • Encourages focus on strategic issues 

• Disadvantages of SWOT analysis include

  • Can quickly become out of date

  • Requires expertise to conduct

• In this type of explain question you can be awarded one mark for each correct advantage or disadvantage identified
  

• A further two marks can be awarded if you apply both the advantage and disadvantage to the business. 

An advantage of conducting a SWOT analysis is that it will help the business to understand its current position and provide information to allow a business to plan for positive or negative changes that might happen in the future [1 mark]. However SWOT analysis is only as good as the information that goes into it which could be affected by bias or poor research methods [1 mark]

• In this example, the candidate has been awarded 2 marks
  

• Whilst one valid advantage and one valid disadvantage have been provided, the response has not been applied to the business

An advantage of conducting a SWOT analysis is that it will help Airbnb to understand its current position and provide information to allow Airbnb and its network of hosts to plan for positive or negative changes that might affect demand for short-term accommodation in the future [1 mark + 1 mark]. However SWOT analysis is only as good as the information that goes into it which could be affected by biased online customer or host reviews or poor research methods that fail to capture the realities of Airbnb's position as a global business [1 mark + 1 mark]

• In this improved response the candidate is awarded 4 marks
  

• One valid advantage and one valid disadvantage have been provided, and the response has been applied to the business

• Threats to Airbnb include

  • Conflict in Ukraine

  • Regulations related to housing, taxation and tourism

  • New competition entering key markets

  • Worsening global economic conditions

• In this type of explain question you can be awarded one mark for each correct threat identified
  

• A further two marks can be awarded if you apply both threats to the business. 

The ongoing conflict in Ukraine presents a significant threat to Airbnb as demand for short-term rentals in a part of the world affected by war is likely to be very low, reducing Airbnb's fees from hosts in the zone.
As well as this, Airbnb may face threats from changing housing and taxation regulations which will require it to update its host terms and conditions on a regular basis.

• This response has been awarded 4 marks
  

• The candidate has identified two valid threats that have both been applied to the business

• Social factors include

  • Increased interest in 'off the beaten track' tourism

  • Like-minded customers attracted to Airbnb's social responsibility model

• Technological factors include

  • Widely-used app and automation used to meet customer and host needs

• Economic factors include

  • Global economic contraction affecting disposal income available for travel and tourism

• Environmental factors include

  • Lower carbon footprint compared to hotels

  • Efforts to reduce waste and save energy

  • Guests are more likely to use public transport

• Political factors include

  • Russia-Ukraine conflict has affected bookings in the region

  • States' restrictive housing, tourism and taxation policies

• Legal factors include

  • Fines and court proceedings in several cities relating to housing, tourism and taxation breaches

• Ethical factors include

  • Social impact experience supports non-profit organisations

• This is a 'Level of response' answer where the examiner judges how well you have displayed the key skills of knowledge, application, analysis and judgement
  

• Your answer will need to show the following elements in order to gain top marks:

  • Appropriate business terms are used throughout 

  • STEEPLE analysis is explained clearly and applied purposefully 

  • The case study material is used in a way that significantly strengthens the response 

  • Chains of balanced analysis are evident throughout the response 

  • Judgments are relevant and well substantiated

In terms of legal factors, Airbnb has faced fines and court proceedings in several cities around the world for breaches of regulations related to housing, tourism and taxation, attracting lots of negative attention and therefore affecting the Airbnb brand. However, in response Airbnb now requires its hosts to commit to a set of terms and conditions that help to prevent further legal problems, negative media coverage and public backlash. This will help Airbnb to protect its reputation and support its social responsibility aims, allowing its hosts to continue to attract like-minded guests.

• In this extract, the candidate has correctly used the STEEPLE analysis model
  

• They have used the case study material effectively to support both 'sides' of their analysis
  

• The chains of analysis are balanced, considering both positive and negative elements