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Airbnb wants to get into furniture space. Should they do it?
Category: Product Strategy Asked at: LinkedIn Difficulty:
Question Explanation
This question is evaluating your ability to think critically about business expansion into new markets, in this case, Airbnb's potential expansion into the furniture space. Your answer should clearly reflect upon the pros and cons of such a venture, taking a comprehensive look at potential challenges and opportunities. Ideally, you should touch on points like market demand, existing competition, Airbnb's resources and capabilities, potential synergies with their current operations and the strategic alignment of this move with Airbnb's mission and vision.
Answer Example 1
If Airbnb is considering entering the furniture space, it is imperative to conduct an analysis of the associated opportunities and challenges. Firstly, given its robust brand image as a home-sharing platform, Airbnb might actually find an appreciable audience for such a venture. Customers might be interested in purchasing the unique, homey, and comfortable furniture that they encountered while staying at Airbnb properties. However, it is equally important to consider challenges. The furniture industry is already quite congested with established players and the cost of entering this industry could be substantial. Airbnb would need to set up or partner with manufacturing and distribution networks to ensure a smooth operation. Additionally, they need to ensure that the products align with their brand image. They also need to understand that selling products is a very different game from providing services, the transition might not be seamless. On the whole, while the opportunity might sound promising, Airbnb will need to strategically evaluate their readiness to enter such an industry, considering the necessary investments, competition, and the shift in the business model.
Answer Example 2
The idea of branching out into the furniture industry could initially sound compelling to Airbnb. It's a way to leverage their existing customer base, and perhaps even appeal to the aspirational value associated with recreating a favorite Airbnb stay in one's own home. Airbnb could possibly style their furniture line inspired by some of their most popular rental homes around the world. On the other hand, it's worth noting that getting into the furniture industry would be a significant departure from Airbnb's core competency, which is providing a technology platform for home-renting. The skills, resources, and capabilities required to run a successful eCommerce platform for furniture are distinctly different. It would also spread Airbnb's resources thin and divert attention from their core business. A strategic alignment is another factor to consider. Airbnb's vision is 'to create a world where anyone can belong anywhere,' focusing on travel experiences. Moving into the furniture space may dilute this brand image by widening its scope too far from its original vision. 16Share In essence, although there might be some synergies and potential customer interest, Airbnb would need to weigh the potential gains against the considerable challenges associated with maintaining brand focus, managing resource allocation, and establishing new operations in an already competitive industry."
