All Case: Solutions
Case: 01 Airbnb Assignment Questions
Case: 02 Costco Assignment Questions
Case: 03 lululemon Assignment Questions
Case: 04 Yeti Assignment Questions
Case: 05 Beyond Meat Assignment Questions
Case: 06 Spotify Assignment Questions
Case: 07 Tesla Assignment Questions
Case: 08 Ulta Assignment Questions
Case: 09 PepsiCo Assignment Questions
Case: 10 Robin Hood Assignment Questions
Case: 11 Macys Assignment Questions
Case: 12 Meta Platforms Assignment Questions
Case
1 Airbnb in 2022
Assignment Questions
1. How would you illustrate and compare the business models for Airbnb, large hotel chains such as Marriott
and Hilton, and bed & breakfast operators?
2. What are the general strengths and weaknesses of large hotel chains such as Marriott and Hilton, bed &
breakfasts, and Airbnb? Explain how you would compare and contrast those businesses.
3. What was Airbnb‘s response to the COVID-19 pandemic? Does it appear that the company‘s business
model is more resilient than that of its hotel chain rivals?
4. In what ways has the lodging consumer changed and how does Airbnb‘s customer value-proposition meet
this change?
5. What is your assessment of Airbnb‘s financial performance since the company has gone public?
6. What recommendations would you make to Airbnb to improve its competitiveness in accommodation
market while mitigating any current and future risks?
,Case 1 Teaching Note
Airbnb in 2022
Overview
Airbnb was launched in 2007 when Brian Chesky and a friend decided to rent their apartment to
guests for a local convention. To accommodate the guests, they used air mattresses and referred to it
as the ―Air Bed & Breakfast.‖ It was that weekend when the idea—and the potential viability—of a
peer-to-peer room-sharing business model was born. During its 15-year existence, Airbnb had
experienced immense growth and had successfully launched an IPO in 2020. By 2021, Airbnb had
entered over 220 countries with more than 5 million locationsi. In 2022, Airbnb seemed positioned to
continue revolutionizing the hotel and tourism industry through its business model that allowed hosts
to offer spare rooms or entire homes to potential guests in a peer-reviewed digital marketplace.
Airbnb‘s business model had been successful by leveraging what is known as the sharing economy.
As it grew, however, Airbnb‘s business model was met with resistance. City officials and owners and
operators of hotels, motels, and bed and breakfasts complained that, unlike traditional brick-and-
mortar establishments that were subject to regulations and taxation, Airbnb hosts were able to
circumvent and avoid such liabilities due to participation in Airbnb‘s digital marketplace. In other
instances, Airbnb hosts had encountered legal issues due to city and state ordinances governing hotels
and apartment leases. Then, in 2020, the spread of COVID-19 and the global pandemic posed an
existential crisis for Airbnb and other business such as hotels operating in the travel and
accommodation market. Many Airbnb hosts were using their hosting revenue to subsidize their
mortgage payments while other hosts had purchased properties that depended solely on the revenue
driven through booked Airbnb accommodations. In the early part of the pandemic during 2020, travel
restrictions and shelter in-place orders to mitigate the spread of COVID-19 significantly impacted
travel.
As vaccines were distributed during 2021 and many countries had reopened their economies, Airbnb‘s
bookings and revenues grew to more than 300 million and nearly $6 billion—see Exhibit 1. However,
at the start of 2022, the company had yet to have a profitable year with some suggesting that the
company needed radical changes in elements of its business model to justify its lofty stock price. The
company‘s $114 billion market capitalization indicated that investors continued to believe in Airbnb‘s
potential, but excuses for continuing losses were becoming more difficult as the company had
achieved sufficient scale to become profitable.
_____
* This teaching note primarily reflects the thinking and analysis of Professor John D. Varlaro, Johnson
& Wales University. We are most grateful for his insight, analysis and contributions to how the case
can be taught successfully.
,Suggestions for Using the Case
Students should find Airbnb in 2022 an interesting case because of their own experiences renting an
Airbnb property and using other sharing economy services from Lyft and Uber. We recommend using
the case immediately following your coverage of Chapter 1. As this case specifically addresses the
unique business models employed for sharing economy companies. Specifically, you may allow
students to compare and contrast the customer value propositions and profit formulas of sharing
economy firms relative to their traditional business model rivals.
We believe that Airbnb in 2022 is an excellent leadoff case for the course (other choices are Robin
Hood and Costco Wholesale). This case is ideal for exploring the concepts of sustainable competitive
advantage, competing differently, and business models. Instructors can drill students on such topics as
customer value proposition, profit formula and compare and contrast Airbnb‘s approaches with those
of traditional lodging operators. This case can also be used to explore factors within the general
environment and how external analysis is important for incumbents and new entrants alike.
The assignment questions and teaching outline presented below reflect our thinking and
suggestions about how to conduct the class discussion and what aspects to emphasize.
To provide students with guidance in what to think about and which analytical tools to utilize in
preparing the Airbnb in 2022 case for class discussion, we strongly recommend providing class
members with a set of study questions and insisting that they develop good notes/answers to these
questions in preparing for class discussion of the case.
To facilitate your use of assignment questions and making them available to students, we have
posted a file of the Assignment Questions contained in this teaching note in the instructor
resources section of the Connect library. You should be aware that there is a set of assignment
questions posted in the in the instructor resources section of the Connect library for each of the cases
included in the 8th edition. In all instances, these assignment questions correspond to the assignment
questions in the teaching note for the case.
The Connect-based Exercise for the Airbnb in 2022 case. We developed an exercise for the Airbnb
in 2022 case for inclusion in the publisher‘s Connect web-based assignment and assessment platform.
The exercise will lead students through all six assignment questions in this teaching note.
It should take class members roughly 30 minutes to complete the exercise, assuming they have done a
conscientious job of reading the case and absorbing the information it contains. All of the questions
are automatically graded, and the grades are automatically recorded in your Connect grade book,
which makes it easy for you to evaluate each class member‘s ability to apply many of the concepts
and analytical methods in Chapters 1 and 2.
You may also find it beneficial to have your class read the Guide to Case Analysis that is posted in the
Instructor Resources section of the Connect Library. Students will find the content of this Guide
particularly helpful if this is their first experience with cases and they are unsure about the mechanics
of how to prepare a case for class discussion, oral presentation, or written analysis.
The case is also well suited for use as a written case or oral presentation. Our recommended questions for written
assignments are as follows:
Marriott management has asked you to assess the threat of Airbnb. Please prepare a five- or
six-page report that includes a description of both Marriott‘s and Airbnb‘s business models,
with an emphasis on an evaluation and comparison of disparate customer demands and user
profiles. Marriott‘s management also asks that you make a recommendation as to how best to
, mitigate the growing appeal of Airbnb, and how to potentially reach millennials and other
potential users of Airbnb.
As a new member of Airbnb‘s management team, you have been asked to prepare an analysis
of its competitive position and potential threats. Your two- or three-page executive summary
should list strategic issues confronting Airbnb and make recommendations to address both
opportunities and challenges. The executive summary should be supported by your analysis of
the lodging industry.
Assignment Questions
1. How would you illustrate and compare the business models for Airbnb, large hotel chains such as
Marriott and Hilton, and bed & breakfast operators? Use the example chart in the textbook for
business models as a guide (Concepts & Connections 1.1)
2. What are the general strengths and weaknesses of large, hotel chains such as Marriott and Hilton,
bed & breakfasts, and Airbnb? Explain how you would compare and contrast those businesses.
3. What was Airbnb‘s response to the COVID-19 pandemic? Does it appear that the company‘s
business model is more resilient than that of its hotel chain rivals?
4. In what ways has the lodging consumer changed, and how does Airbnb‘s customer value-
proposition meet this change?
5. What is your assessment of Airbnb‘s financial performance since the company has gone public?
6. What recommendations would you make to Airbnb to improve its competitiveness in the
accommodation market while mitigating any current and future risks?
Teaching Outline and Analysis
1. How would you illustrate and compare the business models for large hotels chains such as
Marriott and Hilton, bed & breakfast operators, and Airbnb? Use the example chart in the
textbook for business models as a guide (Concepts & Connections 1.1)
Students should be able to identify the following:
Chain Bed & Breakfast Airbnb
Hotels/Motels (single proprietor)
Customer Familiar brands One location, Use of technology to
Value
International brands to offering unique, which users are familiar
Proposition
which customers are local Smartphone
accustomed and accommodation compatibility
potentially feel affinity Intimate Shorter, more intimate
and loyalty accommodation, stays
Global reach with with proprietor
Varying and different
loyalty programs sometimes
locales in which to stay,
serving multiple
both local and
roles, including
international reach
ambassador to
area Cheaper
accommodations
If in rural area,
may be only Unique
accommodation accommodations
Revenue opportunities
