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2007: Andrew Mason, a Northwestern University
graduate living in Chicago, launches ThePoint.com, "an online platform for petitioners to muster support for all sorts of causes.“
November 2008: After ThePoint.com fails to attract
enough ad revenue to stay afloat, Mason tries his luck with daily-deals site Groupon.
2009-2010: Groupon rapidly expands into new cities in
the U.S. and around the world.
150 markets domastically 100 more worldwide
Meanwhile, a multitude of Groupon’s competitors and
copycats appear. Some, like Living Social, BuyWithMe, or Facebook's new "Deals“ November 30, 2010: Google reportedly offers $6 billion to acquire Groupon. June 2, 2011: Groupon filed for a $750 million IPO November 4, 2011: Daily deals site Groupon priced its initial public offering at $20 a share. April 4, 2012: Groupon is forced to restate there earnings claiming that a “material- weakness” in its internal systems was to blame for the inflation of its fourth quarter revenue by $ 14.3 million.
They emphasis a combination between a cost and
Leader in Saving consumers $$$$.
GroupOn operates globally. New expanding markets will
furhter its reach across the globe. Groupon’s mission statement: “to become the operating system for local commerce.” Groupon is setting out to reinvent the multi-trillion-dollar local commerce ecosystem.
Mason is reinforcing Groupon’s long time claim of being
able to connect with local retailers and boost their sales.
Situation: (Gilbert, 2011) Groupon’s main problem is that their business model is unsustainable. They face increasing competition from other direct offering companies. Secondly, Groupon is based on selling other company’s products and as a result, their selling power is only as strong as the item that they are selling. Groupon is in a very dire and serious position with competition nipping at the heels.
Living Social backed by Amazon. (Biggest
Andrew Mason, CEO, Founder (Northwestern
University) Man with great vision. Strengths- Fully understands web Technology and meeting customer needs (Software Developer) Started “The Point” (Campaign to raise money or participation in communities) Referred to by co-workers as arrogant: Not great with sales people
Jason Child, Chief Financial Officer
Brought from Amazon ( CFO and VP of Finance)
Over 7 years as a C.P.A and consulting manager
for Arthur Andersen. Lived in Munich, Tokyo, and Seattle (helped with presence in global markets)
Jason Harinstein, Senior VP and Corporate
Development Worked in Corporate Development with Google
Rob Kilgariff, Vice President of North American
Sales and Marketing Came over from Global Scholar Over 30 years of sales and marketing experience.
Started off as “The Point”
Ground breaking approach to online collective
action. Formed Groupon Makes available a wide variety of products and services for affordable prices in your neighborhood.
Started in Chicago
Has a reported 15 million subscribers in 48
countries. Low barriers to entry/ton of competitors. Bought “CityDeal” in Europe gaining 80 new markets in 16 countries. Latin America, bought competitors in Chile, and launched services in Brazil. Bought competitors in Russia and Japan
Featured a non-profit campaign “ A great deal on
a good deed” (International Medical Corps) Raise money for children medication in Haiti and Pakistan GrassRoots (non-profit) Raises awareness and funding for projects in local communities.
Quirky Modern Simple First in business Customer database
Link up with up and
Great prices to get out
and explore Save $$$
Value Chain Primary Activities
-Inbound Logistics-Deals come from local businesses.
-Operations- Deals are only executed once enough people buy them. -Outbound Logistics-Groupon reaches many consumers through e-mail. -Marketing-Large marketing budget has constantly brought in new subscribers.
-Service-Groupon offers refunds to unsatisfied customers.
Value Chain Secondary
activities -General administration and human resources both appear to be critical weak spots in the value chain as the CEO hasn’t been able to soothe investors fears, and employee complaints about compensation and work hours have been numerous
-Technology DevelopmentGroupon has been acquiring firms to help meet consumer needs like Adku, which helps users shop online.
-Procurement- Groupon uses
-Value-Groupon’s massive size and reach help give the company value
-Rarity-Groupon lacks rarity as there are plenty of other rivals in multiple forms. -Imitability- Low barriers to entry make Groupon rather easily imitable. -Organization-Groupon’s worker disputes and lack of profits suggest it is currently not optimally organized.
Industry Life Cycle
-Groupon is currently in the maturity stage. *Increase in competitors. *Slowdown in growth. -Becoming a cost leader is one possible strategy to remain ahead.
Porters Five Forces
-Threat of Suppliers-Low, due to numerous small businesses to choose from. -Threat of Substitutes-High, due to many other ways to save cash. -Threat of Entry- High, due to barriers of entry being low. -Threat of Rivalry-High, due to large amounts of competitors, such as LivingSocial backed by Amazon. -Threat of Buyers- High, because in order for deals to even go live a certain number of people must
-Economic Conditions- The current recession would be favorable for Groupon -Technological Environment-Wide spread internet access is necessary for the company to enter a market -Political Environment- Different states and countries have different laws on what can be discounted.
-Population Demographics-Groupon’s customer base is mostly made up of single, working women.
-Sociocultural Environment-Groupon has favorable conditions in countries where women in the workforce are on
Competitive Dynamics of
Resource Imitation -Groupon has decided to change its’ tactics in response to increasing competition. -Recently the company has been purchasing tech companies who improve end user experience. -Groupon hopes these purchases will help improve the number of coupons sold per customer.
Internal; inherent to brand/company STRENGTH
Inherent source of competitive advantage within the Brand (of genuine relevance to the consumer)
Inherent cause of competitive disadvantage within the Brand (of genuine importance to consumer)
Unsatisfied or poorly satisfied need in the marketplace which our company can perform profitability
Potential problem from external source which could undermine our Brand’s competitive position if not addressed.
External; outside of brand/company control
- Groupon is a well known brand name within it’s field. -Groupon currently has the largest subscriber base compared to it’s competitors. -Set Up in 48 Countries -Large supplier base -Large advertising budget brings in subscribers. -Lack of subscriptions enables easy user access. -First mover advantage.
-Groupon’s business model leaves little profits to it’s partners. -Deals don’t guarantee repeat customers. -Groupon has constantly struggled to maintain profits each quarter. -Deals must follow through before any income is earned. -Electronic model misses out on older subscriber base. -Disgruntled workers. -Growth slowdown.
-Plenty of untapped markets left worldwide for Groupon to enter. -Groupon could expand into different business areas. -Different distribution avenues available. -Plenty of companies to align with to spread word of deals over. -Potential suppliers aplenty.
-Eventual rise of the economy could lead to lower sales. -Competition for Groupon has been continuously increasing. -Substitutes, such as penny auctions, are numerous
Daily online deals could GroupOn was a new-
easily have been an idea that local newspaper publishers pioneered, as they once upon a time owned local classified markets. Groupon sales more than quadrupled in 2011, when it said it sold to more than 33 million customers for 250,000 merchants
line advertising company. It has managed to take its payment not from advertisers of products and services but, instead, a fee from every successful consumer transaction.
Success conti… Marketing to the Masses
Groupon’s pitch to small businesses was as follows: ”Radio, print, TV, billboards—nothing delivers customers with the speed, reach, and power of a Groupon campaign. There’s no upfront cost and we guarantee results. Try asking for that from any of your other advertising channels.”
being a company for the local and small businesses
that are looking for a source of advertising.
Small businesses saw an actual increase in profits with
help of GroupOn Was very successful in exploiting group discounts to successfully getting people good deals on things they wanted.
First site to offer group discounts for just about anything.
Great job promoting their site, merchant deals,
and services using social media sites like Facebook, Twitter, others.
Along with a new source of marketing for small
businesses, they offered businesses a way of tracking their deals & consumers. Small businesses were now able to:
Learn more about their customers Where they live How they spend their $$$ What they buy
Our group trusts if GroupOn allowed consumers
the ability and/or option to structure, “their own deals”, it would give GroupOn a new strategy and upper hand that many industry insiders and economist say it so urgently needs
Groupon should give customers the option to
personalize the sales and special discounts the way they want, and then have the merchants bid on who gets to fulfill those deals.
Utilize the true meaning of the word “Social”, This
would once again make them innovators and leaders in their industry.