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Today's News Bulletin is a mix of positive and negative, just like life! We discuss the new vaccines that everyone is waiting for as well as the latest banking tragedy that's the story of Tamil Nadu based (almost 90 years old), Laxmi Vilas Bank. But the story we focus on today is AirBnB coming out of an existential crisis and bouncing back despite the pandemic! What was AirBnB's successful pivot strategy? Read on to find out!
After sporting losses worth 900 Mn USD since the COVID-induced lockdowns over the world began, AirBnB was in a precarious position. Having laid off 25% of its workforce, and being forced to raise 2 Bn. USD if debt financing while cutting down on other operational expenses only added fuel to the fire! But come September, AirBnB reported a net profit of 200 Mn USD for the previous 3 months! Wondering how the company came out of an existential crisis when the entire travel industry is suffering as a whole? Read the article! Or read our synopsis!
Well, no matter what domain you're planning to specialize in, or have already specialised in, AirBnB's return to profitability is a business case reflecting not just the times but some age-old strategy lessons taught at b-schools. Whether you're a marketing student or a strategy enthusiast, there's something in AirBnB's story for you!
So let's talk strategy. Basically, like every other business, AirBnB and other travel businesses too were looking for a successful pivot option. How could they make their offerings more relevant in the times of COVID? But for sometime there, people had just stopped traveling and companies could not do much. Slowly though, the various stakeholders in the travel industry started to take stock of options. Still looking for a pivot, AirBnB's team started studying the "new normal" version of customer behavior. They discovered an interesting insight.
AirBnB found that while traveling per se was not undertaken, consumers were getting out of their homes for staycations in nearby locations. Whether for finding a better location to work from, or just to get a break from staying at home and get a change of scenery and air, people were choosing to go to nearby properties and bunking out there. This insight was taken into due consideration and AirBnB's website was updated to reflect this trend. Ergo, there was an upsurge in bookings and people started actively using the service once again. The company reported a 77% upsurge in their domestic business, where the renters did not have to cross country borders, as compared to 52% in January. They also found that people tended to travel short distances and stayed for longer periods of time. This remarkable bounce back is one for the strategy case study lessons.
What do you think? Will the travel industry bounce back with news of a COVID vaccine doing the rounds? Or will companies like AirBnB still face losses? Share your thoughts and opinions in the comments section below!
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Right now, if you are a customer of LVB your options are pretty limited. You can’t withdraw more than Rs 25,000 until December 16, 2020. But in the event of an emergency, or payment towards higher education or marriage, then you can withdraw up to 5 lakhs. And if you are wondering why this moratorium was imposed in the first place, you have to consider the nature of the merger between Laxmi Vilas Bank and DBS. Find the full details in this simple, yet poignant read.
A global search for an effective coronavirus vaccine is still underway as over 57 million people have contracted the disease so far and more than 1.3 million have lost their lives due to it. Pharmaceutical firms Pfizer and Moderna declared recently that their vaccine candidates have shown success in late-stage trials. Moderna claimed that its vaccine is 94.5% effective, Pfizer has said its candidate has shown effectiveness of 95%. Then there's India's own Covaxine. The third phase of the trial of India-made Covaxin will start from today in Haryana. Find out more details here!