Synopsis The collective buying industry has grown by leaps and bounds over the p
ID: 449053 • Letter: S
Question
Synopsis
The collective buying industry has grown by leaps and bounds over the past several years, and Groupon stands out as a major player that has revolutionized this market. This case study describes the beginnings of Groupon, as well as the firms rise to power, the rise of its numerous competitors, its decisions and expansion strategies, and the collective buying industry as a whole. Key demographic data about Groupons customers (consumers and small businesses) are also described, along with recent developments at Groupon and within the industry in general. While Groupon has undoubtedly discovered a unique model that takes advantage of a white space in sales and marketing to local businesses, it is unclear what the future holds for Groupon. Will it be able to sustain its incredible growth rate, or is its business going to peak quickly and then fade?
Questions
1. What is the viability of Groupon? Will this business survive in the long run, or will it fade away?
a. Is Groupon a pioneer? Does it have a first-mover advantage?
b. What barriers to entry is Groupon trying to create? Are they working?
c. What competitive advantages exist for Groupons potentially biggest threat (i.e., Google, which tried to buy out Groupon)?
Explanation / Answer
Groupon's business is very viable and this business will survive in the longer run. Some of the steps that the company has taken will take the company to various places. A few of them are listed below.
Groupon definitely has the first mover advantage in this industry. The way the company progresses in this field is the example for this.
Some of the barriers to entry of the new competitor that groupon is trying to create is are as follow:
Buyout could be a possible threat, to groupon business, but it all depends on the top management on how they want to do business. If they want to go for a buyout with profit, they could also do that. But they always have the option of growing as a single entity in the market.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.