Airbnb is an on-line, homestay network that provides short term lodging. It is a very successful start-up that makes money by charging its users. Guest fee range from 6-12% depending on the size of the reservation subtotal. The higher the subtotal, the smaller the reservation fee percentage - which is non-refundable. Airbnb also charges hosts a 3% host service fee which is applied to the subtotal.

1. What sources of cost advantage apply to Airbnb's business model?
2. What sources of differentiation apply to Airbnb's business model?

Wal-Mart is the most obvious example of a company benefiting from economies of scale. As a dominant player in retailing, the company's size provides it with enormous efficiencies that it uses to keep costs low. Size provides enormous efficiencies across it's over 5000 stores worldwide. Wal-Mart has a ton of important information concerning consumer likes and dislikes and it spreads best practices across all its stores. (news.morningstar.com/classroom 2016)

1. Beyond the obvious economies of scale, which other sources of Cost Advantage does Wal-Mart leverage?
2. What approaches do you think Wal-Mart uses in "finding sources of differentiation"?

Dollar Shave Club's retail disruption. As noted in theweek.com (August 2016), "in a deal that has shaken the stodgy consumer products industry, Unilever announced (2016) it will pay $1 billion to acquire Dollar Shave Club - a five year old firm that delivers no-frills disposable blades to subscribers for as little as $3 a month. Since launching in 2011, the Venice CA-based startup has grown to 3.2 million subscribers - earning $152 million in 2015 and becoming a case study in how a disruptive innovator can "break into a highly profitable and overserved industry". DSC contracts with a South Korean razor manufacturer and then sells the blades directly to consumers over the web. The global razor business has long been built on convincing people they need more and more blinged-out blades at higher and higher prices (Terlep, Wall Street Journal). Doller Shave Club now claims 5% of the US men's shaving market long dominated by Gillette (Proctor & Gamble). Since 2010, Gillette's market share has fallen from 71 to 59 percent."

1. Which type of Cost Advantage applies to Dollar Shave Club?
2. What sources of Differentiation Advantage does Dollar Shave Club leverage?