Groupon: A Comprehensive Strategy

Words: 5468
Pages: 22

Groupon: A comprehensive Strategy
TM583 – Course Project

By Jesse Marcano
Cory Shenault
Clifton Leonard

Table of Contents

Introduction 2 Section 1 - Strategy 3 Section 2 – Core Competencies 6 Section 3 – Industry Dynamics 10 Section 4 – Technology Sourcing and Internal Innovation 13 Section 5 – Product Development Strategy 16 Section 6 – Strategy to Protect Innovations 17 Conclusion 20 Bibliography 20

Groupon did not invent the daily deal website; however, they introduced the concept of using the group buying power of online shoppers to receive substantial discounts from local merchants. Their model has been easy to replicate, which has lead to many clones operating in the same market as
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Goods and services are offered by Groupon for local businesses once a day in each city that Groupon has a presence. In 2010, Mason announced that Groupon would offer multiple deals per day in many markets in an effort to acquire more small business clients. Offers will be based upon geographic location and customer’s past purchases and an algorithm will be used to mete out the offers based on that criteria. For instance, a jazz fan in Bronzeville would not receive a deal for half-price bar hopping tour buses in Wrigleyville.
Consolidation is another of Andrew Mason’s strategies. In May of 2010, Mason purchased Citydeal, a Berlin based organization. CityDeal is another group-buying site that employs six hundred people and serves eighty cities in Europe. Mason wants to purchase more organizations abroad but explains that it is not so easy to be an outsider and figure out the local habits of consumers in those nations. Groupon has the ability to expand in many markets and turn a profit. Mason says that a yield of 20 deals per day in a metropolitan area like Chicago implies about 5,000 retailers per year, per city. One Hundred deals per day are now posted by Groupon in the U.S. and Mason thinks that that number can be increased by about fifty percent each month increasing to four hundred by the time January of 2011 comes.
Section 2 – Core Competencies

In their 1990 article