Abstract Chapter One – Introduction Hastings 1.1 Background

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Chapter One – Introduction  



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1.1  Background
and purpose

1.2  Value
of research

1.3  Research


Chapter 2 – Literature Review   

  2.1 Sharing Economy –
collaborating and connecting journal good

2.2 Business model framework

2.3 sharing economy business model

2.4 Internationalisation




1.0 Introduction & Overview



1.1 Research Overview


Recent years have witnessed new forms of sharing, paving new
ways and opportunities to the provision goods and services. Various economic restrictions
have acted as catalysts in creating such acts of sharing, meandering what can
be identified as a ‘quest for affordability, coupled with housing scarcity’
(Jefferson-Jones, 2015). The remodelling of the economy to inhibit such change in
a time of increasing integration and interdependence of the world’s economy has
opened it up to the new concept of what is deemed as a “sharing economy”
(Kassan & Orsi, 2012). AirBnb has been at the forefront of such economic
changes, its global development reaching greater than 3,000,000 listings in 34,000
cities and 191 countries. The firm has established itself as a pioneer of the
sharing economy (Akbar & Tracogna, 2018), providing in excess of thirty
million guests accommodation without the ownership of a single room. The
emergence of Airbnb and its role in the sharing economy has highlighted the
quick growth and adaptation the hotel industry has been experiencing in recent
times, but has also had a greater impact in altering traditional views on
internationalising companies. The increased pace of globalisation activities
amongst changing business environments and technological advances paving open
the gateway to new business opportunities has led to the reconsideration to pre-established
views based on Born Global Firms, or International New Ventures (McKinsey &
Company, 1993; McDougall & Oviatt, 1994).

Originally coined by Mckinsey & Company (1993) but later
revisited by Knight & Cavusgil (2004), Born Global Firms were closely
associated as “entrepreneurial start-ups that, from or near their founding,
seek to derive a substantial proportion of their revenue from the sale of
products in international markets”. International New Ventures (INV) on the
other hand were defined by Oviatt & McDougall (1994) as “a firm that, from
its inception, seeks to derive significant competitive advantage from the
combination of resources and sale of outputs in multiple countries”.

From the materialisation of the Born Global concept, various
definitions have since emerged providing added complications when understanding
the theory. Thus, for the duration of this paper, acceptance that a born-global
firm entails a global focus, in which from inception maintains resources to implement
towards international ventures (Law, 2012). In addition, acknowledging that the
venture seeks to satisfy a global niche (Tanev, 2012) validates Oviatt &
McDougall’s definition and so will be used when addressing AirBnb as a Born
Global Firm.


1.2 Background of AirBnb


Airbnb identifies itself as a worldwide sharing platform,
consisting of ‘a trusted community marketplace for people to list, discover,
and book unique accommodations around the world’ (Airbnb, 2017). Founded in
2008, Airbnb started out advertising their apartment in the form of three air mattresses
as an ‘AirBed & Breakfast’ during the time of a local business conference;
offering an alternative to the highly demanded and priced hotel rooms. This
system developed into what is now an online peer-to-peer accommodation platform,
enabling individuals to list their property or room(s) for rent through the
company’s website. Fees are charged via the website at a 6-12% fee for guests whilst
hosts receive a 3% fee (find source), Airbnb’s revenue model thus being derived
from charging a transaction fee from guests and a flat commission fee for

The listing process involves both the host and potential
guest registering for an Airbnb profile on the Airbnb website, in which the
guest will send a reservation request or enquiry to the host. In response, the
host can accept the reservation request or provide questions to the guest in
order to acquire information about the party.

Airbnb centres its appeal around being ‘a platform that
empowers guests looking to travel in a different way’ (Airbnb UK Report, 2017).
Coupled with the continuous momentum gained by the sharing economy and the
shift of the tourism industry towards the concept of home sharing, it is
through this appeal that Airbnb has recognised itself as a leader in its
domain, currently offering over 3 million listings worldwide (Airbnb, 2017), 168,000
listings in the UK alone. The increased travel opportunities created through
this industry shift has meant Airbnb’s flexibility, affordability and local
connections when offering tourists travel opportunities has expanded
significantly, 64% more people using the platform compared to a year ago
(Airbnb UK report, 2017).

The rate of Airbnb’s rapid internationalisation has seen
company growth in annual guest arrivals increase from 0.021million upon
inception in 2009 to 40 million in 2015 (Chestnut, 2016). The beginning of the company’s
global expansion in 2011 with the acquisition of a German competitor, Accoleo,
followed closely by Airbnb’s London office being established in October 2011 (Financial
Times, 2011) leading to the firm now operating in 34,000 cities and 191
countries demonstrates the incredible growth it has seen in international
users. The hotel industry is regularly identified via its highly competitive
nature, Mace (1995) perceiving the industry to be one of the most ‘global’ in
the service sector. Airbnb’s $31bn valuation as of mid-2017 (Thomas, 2017) compared
to the market capitalisation of Hilton and Marriott being $20bn and $34bn
respectively illustrates just how quick Airbnb’s internationalisation pace has
been, with possible plans for IPO potentially valuing the company at $50bn
(Johnson, 2017).


The emergence of Airbnb and the recent materialisation of
the sharing economy phenomenon has meant current academic literature is
comprised of highly limited knowledge with regards to the internationalisation
process of such firms within sharing economy (Kosintceva, 2016). In addition,
the research scope within this area of academia is sufficiently narrow and
limited. The need for an acquisition of theoretical knowledge into this area is
therefore needed, and through the utilisation of literature surrounding BGF’s,
further research on influential factors shaping Airbnb’s internationalisation can
be discussed. With the defining characteristic of a BGF being its accelerated
internationalisation, the study of this concept is important, as a conceptual
framework within current research is largely absent (Rialp, Rialp & Knight,
2005). Therefore, looking at the sharing economy, and Airbnb in particular,
this paper will act to provide a conceptualisation of the accelerated internationalisation
process of Born Global Firms.



1.3 Research Objectives & Structure



This paper will provide qualitative research into the
internationalisation process of Airbnb, aiming to explore the factors behind
this as well as identifying any patterns existing within the global expansion
of BGFs. The formation of the research question has thus been derived to answer
the following: How Born Global Firms within the Sharing Economy internationalise
their operations?

The importance of a research question such as this is
validated through the fast pace and recent growth witnessed within the sharing
economy, the peer-to-peer rental market reaching $26 billion in 2013 (Botsman,
2013). In addition, the quick growth of these BGFs present a challenge to
previously established global expansion theories, and so offer insightful
academic review.

In order to successfully offer discussion on this research question
the following objectives were established:

Analyse the process of Airbnb’s internationalisation;

Identify the competitive advantage accessible to
Airbnb through which enabled them to expand into foreign markets;

Identify the motives present when Airbnb were
expanding internationally;

Analyse the business strategy adopted by Airbnb
alongside the choice of entry modes in implementing this plan.


The paper will build on international business,
internationalisation and sharing economy literature, providing insightful
discussion and advancements on prior internationalisation witnessed by Born
Globals. The thesis will thus adopt an exploratory nature featuring an
empirical study based upon the case study of Airbnb and its expansion. The
paper will be completed using the following structure. Firstly, discussion will
be opened by giving an introduction to the study and a background to the
company under analysis. Following this, the second chapter will provide a
literature review, integrating literature on “international business”,”
internationalisation”, “business model framework”, and “sharing economy” to
provide theoretical background of the main areas of the research. The
methodology will then be explained in chapter three, with analysis of Airbnb’s
internationalisation being given in chapter 4. To draw the dissertation to a
close, the results of the study will be discussed with a concluding remark presenting
limitations experienced throughout the paper as well as any comments to whether
further research could be useful.

2.0 Literature Review










Categories: Case Study


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