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    Groupon Case Study - 2020

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    Ryan
    Groupon's business model involves partnering with local merchants to offer group discounts on products and services. By requiring a minimum number of customers to sign up for a deal, Groupon is able to negotiate greater discounts from merchants based on increased sales. This model merges traditional coupon-based marketing with online social networks and groups to attract large numbers of customers. However, competition from copycats has challenged Groupon's financial performance. Its ability to adapt its model and create sustainable advantages will determine whether it can maintain relevance in the digital marketplace.

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    Groupon Case Study - 2020

    Uploaded by

    Ryan
    177 views1 page
    Groupon's business model involves partnering with local merchants to offer group discounts on products and services. By requiring a minimum number of customers to sign up for a deal, Groupon is able to negotiate greater discounts from merchants based on increased sales. This model merges traditional coupon-based marketing with online social networks and groups to attract large numbers of customers. However, competition from copycats has challenged Groupon's financial performance. Its ability to adapt its model and create sustainable advantages will determine whether it can maintain relevance in the digital marketplace.

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    Groupon Case Study_2020

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    Groupon's business model involves partnering with local merchants to offer group discounts on products and services. By requiring a minimum number of customers to sign up for a deal, Groupon is able to negotiate greater discounts from merchants based on increased sales. This model merges traditional coupon-based marketing with online social networks and groups to attract large numbers of customers. However, competition from copycats has challenged Groupon's financial performance. Its ability to adapt its model and create sustainable advantages will determine whether it can maintain relevance in the digital marketplace.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    177 views1 page

    Groupon Case Study - 2020

    Uploaded by

    Ryan
    Groupon's business model involves partnering with local merchants to offer group discounts on products and services. By requiring a minimum number of customers to sign up for a deal, Groupon is able to negotiate greater discounts from merchants based on increased sales. This model merges traditional coupon-based marketing with online social networks and groups to attract large numbers of customers. However, competition from copycats has challenged Groupon's financial performance. Its ability to adapt its model and create sustainable advantages will determine whether it can maintain relevance in the digital marketplace.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Managing in the Digital World:

    The Business of Merging "Groups" and "Coupons"

    It comes as no surprise that the Internet has not only


    helped advance traditional business models, but also
    enabled entirely new kinds of business models. The
    Web is more flexible than real-life society in many ways ,
    changing how we communicate with friends and family,
    changing how we work, and clearly changing the way we
    shop for products and services. This flexibility is a cata-
    lyst for the creation of a seemingly endless array of new
    types of businesses or the reinvention of tried-and-true
    business models of the past.
    One example is the highly popular Web site Groupon,
    which prompts consumers to get together with their
    friends and family, to shop in groups, and buy in volume,
    in order to benefit from higher discounts from national and FIGURE 2.1·
    local businesses. Groupon's business model is to partner -The network effect is central to many innovative business models.
    with established merchants looking to clear out seasonal
    stocks or excessive supply, or to work with newer busi- Unfortunately, Groupon's inability to distinguish itself from
    nesses looking to build a customer base. As the merchants others has so far resulted in lackluster financial performance.
    sell higher volume, the cost per unit decreases (a! least While it is certain that high-volume group couponing will
    continue to exist on the Internet, it is clear that the current
    up to some point). This is where the "group" in G~oup~n
    comes in· A deal only goes through when a certain, P - instantiation of Groupon's business model does not provide
    · number of Groupon subscribers sign · up for a sustainable competitive advantage. Time will tell whether
    determined
    . reache d , everyone who signed up Groupon will be able to fine-tune its business model in order
    It; once this number 1s
    . Grou pon took the old- to have a lasting presence on the Web, or be another infa-
    for the deal enjoys the lower pnce.
    mous Internet failure like Pets.com, Webvan.com, MVP.com,
    fashioned business model of using . cou pons to attract. cus-f
    Kozmo.com, eToys.com, and countless others.
    ff t and economies o
    tomers, marrying the network e ec s w and highly After reading this chapter, you will be able to answer the
    scale capabilities of the Internet to create a ne following:
    successful business model (Figure 2 ·1). . ket and
    . h oup-buying mar ' 1. How have information systems enabled new, interesting
    Being an early player in t e gr . yed a first- business models like that of Groupon?
    . h Groupon enJo
    rapidly gaining market s are, G oupon has
    ·ts success, r 2. What are the key components of Groupon's current
    mover advantage, but due t O I tors" around business model?
    h "'mpersona
    I
    been cloned by numerous ot er ecided to buy up its
    the globe. In 2010, the comp~ny d d most important, 3. How might Groupon leverage technology to
    "clones" to reclaim its identity ~n ' kets in Europe strategically create a competitive advantage?

    fast-track its expansion Into fo~eig~a:~;ated by buying Based on:


    and Asia. Thanks to the expansion has over 45 million Anonymous.(n.d.). Benefits-Groupon.Groupon,Retrieved May15 ,from
    1 2014
    Its "wannabe" clones, Groupon now ·ii·on subscribers https://www.grouponworks.com/beneflts-of-advertlslng-with-groupon.
    200 ml I Groupon. (201 4, April 29). In W!kiped/a, The Free Encyc/ope<Jia. Retriev
    active customers and over rchants have been
    May 16, 2014, from http://en.w1k1pedla.org/w/index.php?title::Groupon:~
    Worldwide Over 650,000 different me dld=606284237.
    . . s
    featured with Groupon promotion ·

    79

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