Premium Essay

Groupon's Business Model and Its Sustainability

In:

Submitted By kajer12
Words 293
Pages 2
Groupon : In its simplest form Groupon (derived from "group coupon") is a deal-of-the-day website that

features discounted gift certificates usable at local or national companies

Business Model: The company offers one "Groupon" per day in each of the markets it serves. The

Groupon works as an assurance contract using ThePoint's

platform: if a certain number of people sign up for the offer,

then the deal becomes available to all; if the predetermined

minimum is not met, no one gets the deal that day. Groupon

makes money by keeping approximately half the money the customer pays for the coupon. Its business

model essentially consists of economies of scale and economies of networking.

Sustainibility : According to an article published in Forbes titled “Is Groupon's Business Model

Sustainable?” (http://www.forbes.com/sites/panosmourdoukoutas/2011/10/22/is-groupons-business-model-sustainable/)

Groupon’s business model is not sustainable for two reasons : 1) it is selling other company’s offering

who have the upper hand in deal negotiation and 2) they have considerable direct competition from

companies with a broad user base like Google, Yahoo, Expedia and so on. The findings of an academic

study of Rice University from 2010, from 150 Groupon businesses in 19 cities:

(http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1696327)

• 66% profitable; 32% unprofitable.

• Restaurants were the most unprofitable category, describing Groupon customers as "entitled," poor tippers, and definitely not repeat customers. • 42% said they would not use Groupon again
It is interesting to note that Groupon declined the $5.3 billion offer made by Google to acquire them.

Obviously they have enough faith in themselves to able to walk out from such lucrative offer. Only time

will tell if they can emerge as a

Similar Documents

Premium Essay

Hbr Case Summary

...Enterprise Risk Management at Hydro One (A) An early adopter of Enterprise Risk Management, energy giant Hydro One anticipated new threats and opportunities in an industry that faced climate change and carbon legislation, the deregulation of electricity markets, and the greater adoption of renewable technologies. CEO Laura Formusa felt Hydro One's risk profile had shifted, to the extent that she had to ask herself -- was the strategy tenable? The case provides a rich description of Enterprise Risk Management in action, and shows how Hydro One executives arrive at a shared understanding of the risk profile of the company. In the narrative a diverse group of managers (the chief executive, the chief financial officer, the head of the public relations and the chief regulatory officer) voice their views on the risks, collectively bringing a multiple stakeholder perspective to the risk profile. The case challenges students to define the problems and risks that the company faces, given its strategic objectives, its evolving risk profile, and the changing environment. The case also offers a discussion ground for defining the role of the chief risk officer, and the relationship between risk management, strategic planning and capital budgeting. Procomp Informatic: Stepping on Ethical Landmines in Asia The collapse of Procomp Informatics Ltd, a major Taiwanese chipmaker, has been regarded by Taiwan's market watchdogs as similar to the scandal of the U.S. energy giant Enron in 2001....

Words: 2159 - Pages: 9

Premium Essay

Management

...ELEVENTH EDITION Management LEADING & COLLABORATING IN A COMPETITIVE WORLD Thomas S. Bateman McIntire School of Commerce University of Virginia Scott A. Snell Darden Graduate School of Business University of Virginia MANAGEMENT: LEADING & COLLABORATING IN A COMPETITIVE WORLD, ELEVENTH EDITION Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2015 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2013, 2011, and 2009. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 ISBN 978-0-07-786254-1 MHID 0-07-786254-6 Senior Vice President, Products & Markets: Kurt L. Strand Vice President, Content Production & Technology Services: Kimberly Meriwether David Managing Director: Paul Ducham Executive Brand Manager: Michael Ablassmeir Executive Director of Development: Ann Torbert Senior Development Editor: Laura Griffin Digital Product Analyst: Kerry Shanahan Marketing Manager: Elizabeth Trepkowski ...

Words: 87010 - Pages: 349

Premium Essay

Fundamentals of Human Resources Preview

...es acculpa dolecae. Re nes eum nescimos inci dolum venihilitem ius, aut earchic ideriss equam, omnim nonet voles est quaere reptas am fugiatiis et rempelibus alibus. Ommost od et ulpa quid et mo blaut odi testios et, officia sitaqua sperum ipid qui blandaecus aperum dit vidis vollenda nimporr ovitatem nonet accusdaeris et aut earchilique porent. Itat odis nulpa se proreni sinciae. Ent eatur, coria voluptation ex et estionet remporporum quid ma culpa quate mincil moloria ndaestrunt. Minctas mi, tesciis delesti stiorrorest modipic iusdaniata nobit et lamet eum fuga. At rerspid itempor as quunt ationet omniendipis vendios con nulluptur, si deles pos magnam incid quos delique essequam nes dendis sae poremqui dit occabora in est, nimuscitiore di omnimodit quatum voluptas acerupit invenim inienimet volorecabo. Nam, ni omnis min res experio. Et omnimil lestruptate in est, ium volupis delest lique lab illoritatus. Henihit atiorestia dolor sit perspel endignis quo mod mincit quist fugit inci qui rehenis repero mo voles management in practice Riassi dentiumquam, officiis aligenihita nossimint. For Certificate IV BSB41013 and Diploma BSB50613 ly volorrum rehent officabo. Corio maiore ni ullore quis et quaecepremo et on Lisimaxi magnihicit esciendit que eratem. Non eos ipsam quo to maximagnam human resource management in practice e ese ped eveliquis il mi, ommolup tatinis etur sequiscienis autaque earibus. pl alitior estrund emquodiatur...

Words: 40577 - Pages: 163

Premium Essay

Lauder Global Insights

...The Lauder GLobaL business insiGhT reporT 2014 rebalancing the Global economy Lauder-Report-2014.indd 1 12/18/13 12:07 PM Introduction The Lauder GLobaL business insiGhT reporT 2014 rebalancing the Global economy In this special report, students from the Joseph H. Lauder Institute of Management & International Studies examine current trends and recent developments shaping today’s global marketplace. The articles cover a wide variety of topics ranging from technology, innovation and brand building to infrastructure, entrepreneurship and social impact. A section on consumer markets looks at the popularity of e-cigarettes in France and elsewhere, efforts by Japanese firms to expand their businesses into Asia, new trends in French gastronomy, changes in Japan’s traditional food-consumption habits, and how a sector of the Chinese population is spreading, and spending, its newfound wealth. The report offers an analysis linking market-driven strategies with social impact in Peru and Colombia, as well as an article describing South Carolina’s embrace of innovative research. Other articles look at the Russian government’s attempt to reboot the city of Skolkovo as an innovation hub, the mixed success of innovation efforts in China, and the growing threat of cybercrime to businesses across the world. The challenges of infrastructure and planning are addressed in analyses of transportation in areas of Latin America, deficiencies in Brazil’s infrastructure, and real estate’s...

Words: 56733 - Pages: 227

Premium Essay

Financial Accounting

...ACCOUNT CLASSIFICATION AND PRESENTATION Account Title Accounts Payable Accounts Receivable Accumulated Depreciation—Buildings Accumulated Depreciation—Equipment Advertising Expense Allowance for Doubtful Accounts Amortization Expense Bad Debt Expense Bonds Payable Buildings Cash Common Stock Copyrights Cost of Goods Sold Debt Investments Depreciation Expense Discount on Bonds Payable Dividend Revenue Dividends Dividends Payable Equipment Freight-Out Gain on Disposal of Plant Assets Goodwill Income Summary Income Tax Expense Income Taxes Payable Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Inventory Classification A Current Liability Current Asset Plant Asset—Contra Plant Asset—Contra Operating Expense Current Asset—Contra Operating Expense Financial Statement Balance Sheet Balance Sheet Balance Sheet Balance Sheet Income Statement Balance Sheet Income Statement Income Statement Balance Sheet Balance Sheet Normal Balance Credit Debit Credit Credit Debit Credit Debit Debit Credit Debit Debit Credit Debit Debit Debit Debit Debit Credit Debit Credit Debit Debit Credit Debit (1) Debit Credit Debit Debit Credit Debit Credit Debit B Operating Expense Long-Term Liability Plant Asset C Current Asset Stockholders' Equity Intangible Asset Cost of Goods Sold Balance Sheet Balance Sheet Balance Sheet Income Statement Balance Sheet Income Statement Balance Sheet Income Statement Retained Earnings Statement Balance Sheet Balance...

Words: 56249 - Pages: 225