THE TUCK SCHOOL AT DARTMOUTH
Entrepreneurship and Innovation Strategy Final
Project
Gustavo Ferreira
Caroline Hollis
Geoff Mattei
Ben Tilton
11/11/2011
Executive Summary
Groupon was founded November 2008 in Chicago to use “daily deals” to offer bargains to consumers and
drive sales with local merchants. Three years after their first sale, they continue to grow at 50% per
month, with a revenue run rate of over $2B per year in January 2011. In the process, they have become a
darling of the internet companies and are touted as one of the fastest growing companies in the world.
In Groupon’s words, their value proposition is to “use collective buying power to offer unbeatable prices
and provide a win-win for business and consumers, delivering more than 650 daily deals globally”. 1 In this
paper, we examine the dynamics of Groupon’s business model; the context of their innovation, how they
executed their vision, how their strategy has changed, and what they need to do in the future.
There are three important conclusions from Groupon’s short history:
1) They have been very successful at developing a simple, effective product leveraging social media
and online advertising that created genuine value for an underserved market segment (smallmedium businesses);
2) They grew at an impressive pace by developing a repeatable model for market entry, and
leveraging a strong sales force and very directed leadership;
3) There are almost no barriers to entry (despite Groupon’s claim that ‘scale’ and ‘best product’ will
keep competition at bay) and they will face extreme competitive threats in the near future.
While the company has done well against smaller players by relying on its scale, this strategy will not
work against players such as Amazon and Google. Although Groupon could continue to develop their
value proposition, the lack of repeat merchants makes building customer stickiness based barrier to entry
nearly impossible. For now, the company should focus on gaining as much market share as possible, and
look for potential partnerships or exit opportunities, as the future erosion of this market share and an
erosion of profitability for the company is a near certainty.
1
http://apps2.shareholder.com/tearsheet/generate.aspx?id=251847&CompanyID=AMDAE2NTR&s=1494945303
Contents
Context of the Innovation .............................................................................................................................. 3
The relevant markets and industries that it affects .................................... Error! Bookmark not defined.
Local advertisement Industry: ................................................................................................................... 4
The technological and organizational issues that it raises ........................................................................ 5
Groupon’s Strategy ....................................................................................................................................... 5
Market Entry .............................................................................................................................................. 6
Company strategy ..................................................................................................................................... 6
Construction of the business model .......................................................................................................... 8
Value Intended to be Created by Groupon................................................................................................ 9
Risk .......................................................................................................................................................... 10
Competition ............................................................................................................................................. 13
Approaches to market definition and segmentation; ............................................................................... 11
Expectations for market growth ............................................................................................................... 12
Exit Strategies ......................................................................................................................................... 13
LOOKING FORWARD ................................................................................................................................ 15
Strategic Vision ........................................................................................................................................ 17
Conclusion ............................................................................................................................................... 20
Context of the Innovation
Introduction
Groupon was founded in November of 2008 in Chicago with the goal of using “daily deals” to
offer bargains to consumers and drive sales with local merchants. Three years after its first sale,
they continue to grow at 50% per month, with a revenue run rate of over $2B per year in
January 2011. In the process, they have become an internet company darling and are touted as
one of the fastest growing companies in the world.
In Groupon’s words, their value proposition is to “use collective buying power to offer
unbeatable prices and provide a win-win for business and consumers, delivering more than 650
daily deals globally”.2 An examination of the dynamics of Groupon’s business model; the context
of their innovation, the way they executed their vision, and the changes made to their strategy
over time, will provide insights into what they need to do in the future.
The relevant markets and industries that it affects
Groupon’s target market is small and medium-sized businesses (SMBs) in urban centers. Their
industry is online advertising.
Initially, Groupon had no direct competition in their small niche market. Businesses used
Groupon’s services to drive immediate sales, and increase awareness through social marketing
and ‘hype’. Substitutes (and complements) for these services – i.e. competition for share of
advertising wallet of small and medium businesses - included paper coupons, local advertising
(TV, radio, billboards, etc), and online advertising media (e.g. Google adwords, email, etc). In
its early days, Groupon was targeted at local businesses in Chicago, and did not directly
threaten any existing markets or industries. Instead, Groupon provided a unique value
proposition to businesses that wanted to increase sales and awareness with a low risk
2
http://apps2.shareholder.com/tearsheet/generate.aspx?id=251847&CompanyID=AMDAE2NTR&s=1494945303
promotion, whose success could easily be tracked To this end, Groupon competes directly or
indirectly with online advertising sites and service providers (e.g. Google). Groupon also
continues to exacerbate the threat to the traditional advertising services of the 90s such as the
Yellow Pages.
Local advertisement Industry
Until the 90’s, the Yellow Pages, direct mail, flyers, paper coupons and local media were
the main advertisement medium used by local businesses. The internet revolutionized the
advertising industry for SMBs by providing low cost advertising means that helped them directly
target their core customers. In 1994, the first Pay-per-click advertisement was introduced,
beginning the transformation of the advertising industry. The first ads were sold on a cost per
thousand impressions basis (CPM). In the late 90’s, Google evolved to target advertisements on
its search engine based on user queries. After the internet bubble in the spring of 2000, Google
started to sell advertisements on a pay per click basis (PPC – customer paid only if users enter
in their web page clicking in the ad). Different from its competitors that use an auction that puts
the highest bid on the top of the user search, Google introduced the concept of relevance, which
ultimately differentiates its search engine from its competitors. The click through rate determined
the ad relevance and it could give the preference over the bid value on the position of the ad on
the search results. Finally the industry has evolved with Pay per Performance tools that enable
businesses to track the revenue directly generated from an ad in terms of completed sales.
The online advertisement industry’s attempt to become increasingly targeted, relevant,
measurable, and effective has paid off. In 2010, paid search already counted for more than 50%
of online spending among Small Businesses. The PPC model was more attractive to merchants
than the CPM since it demanded payment one step further on the marketing funnel. From
awareness only (CPM) to engagement (PPC). In 2008, Groupon capitalizes on the Pay per
Performance models and launches a model that gives merchants direct visibility to how many
direct sales a promotion has generated. With Groupon the client incurs costs only when a
consumer acquires a coupon (CPA model – cost per acquisition).
Printed
Online
CPM
Yellow
Pages
PPC
CPA
Groupon
The technological and organizational issues that it raises
There were several key innovations and developments that were critical in enabling Groupon’s
success. Groupon capitalized on the internet’s culture of hype, social media, and the trends in
online advertising to launch its business. Internet users were already comfortable with social
networks and internet sites as a forum for sharing their opinions about purchases; Facebook
had already commercialized a culture of social networking; Google proved the value in online
advertising; Amazon proved users were comfortable with making purchases large and small on
the internet. All of these phenomena contributed to an environment that was primed for
Groupon’s entry. Additionally, small and medium businesses were underserved by the major
players in online advertising, and lacked access to the capital and revenues needed to use
many of the existing products. Groupon’s local, targeted, low risk proposition came at a perfect
time to capitalize on an under-served market.
Groupon’s Strategy
Market Entry
The evolution of Groupon began in 2006 when entrepreneur, Andrew Mason set out to
utilize people’s fixation with social media and combine it with the idea of creating a collective
action that is centered on a tipping point. Mason’s inspiration was a problem he was
encountering with a cell phone contract. Mason dubbed the web-based platform he created,
The Point. The site’s goal was to allow anyone to campaign for people to do something or
donate to a cause. The Point received funding from entrepreneur, Eric Lefkofsky but what
quickly became apparent was The Point didn’t have a true profit model. Mason was forced to
examine his business and figure out where revenues could be generated and honed in on
collective buying as his path to business success “Definitely, collective buying seemed the most
interesting,” he says, “because it was the most unknown.”3 Mason researched past online
collective buying businesses and realized if he focused on selling service offers, as opposed to
physical goods, he would remove most of the competition from the picture. He started Groupon
in Chicago in 2008, as t that is where the founders’ were based and their networks were the
strongest.
Company strategy
Groupon’s original strategy was very clear; they sought to leverage small and mediumsized business’s desire to increase awareness of their businesses and expand their customer
bases. When Groupon first began, it was the first company of its kind to utilize a digital media
strategy that relied on SMBs to generate revenue. Groupon’s daily deal email strategy relied
upon consumers’ desire to save money, their use of email and the internet for shopping, and
their adventurousness in trying new restaurants and stores in their neighborhood. Business to
Consumer (B2C) acquisition occurred through both direct advertising and basic social media.
From a business to business (B2B) perspective, Groupon had to find reputable businesses
3
(Coburn, 2010)
willing to advertise via a coupon, structure an appealing deal, and then rely on the business to
hold up its side of the deal. In return, Groupon provided an outlet that gave enormous exposure
to new customers, a new potential for price discrimination with the new customer base, and a
publicity factor that grew as consumers shared their deal acquisitions through social media
outlets like Facebook, Twitter, and Yelp.
The strategy utilized a combination of group interest and coupon-centered advertising.
For any single deal to work, Groupon had to find a partner in the city of the deal willing to offer
an enticing discount to its business, and then generate commitments from consumers that
reached a certain volume threshold to make the deal valid. If the deal became valid, Groupon
received a percentage, usually 50%, of the cost of the Groupon. Andrew Mason, founder and
CEO, wanted to change the way people bought and interacted with local businesses.
Groupon’s success was aided by the telesales expertise and capital of co-founders, Eric
Lefkovsky and Brad Keywell. Both had extensive experience running big companies and they
intensely studied how to bring a sales-dependent business to the internet. The business model
was tailored for growth and Groupon has expanded from serving one market in Chicago in
November 2008, to serving 150 markets in North America and 100 markets in Europe, Asia, and
South America in October 2010. “Lee Brown, SVP National Sales for Groupon, commented that
by early 2011, achieving the requisite tipping point was nearly a “forgone conclusion;” Groupon
reported that less than 5% of all deals purchased in North America failed to reach the required
quantity threshold.”4 While sales were at the core of Groupon’s strategy, the business
benefitted from its payment model as well. Since Groupon received payment from its users
right away upon their purchase of a deal and paid the businesses back later, they were able to
cover their upfront distribution and advertising costs.
4
(Johnson & Marshall, 2011)
Construction of the business model
User acquisition
Entice offer
Direct advertisement
Web social
Client acquisition
Sales force
(Call centers)
Coupon
$
$/2
Groupon’s business model was constructed with an emphasis on the internet, email,
and sales. As the above figure shows, by using the internet for its business platform, Groupon
removes many risks from its business model. No product actually has to be physically sent at
any point. Groupon is able to source the deals through its expert sales force, an email detailing
the offer is generated and sent daily, consumers commit to the deal, and upon the breach of the
tipping point a second email is generated notifying the consumers and the consumer is charged
for the deal. Groupon’s expert sales force was critical in generating scale among businesses,
although the sales force is also one of their largest expenses. On the B2B side, Groupon
receives the money only upon completion of the deal and then pays the businesses their cut.
Value Intended to be Created by Groupon
Stakeholder Local Business

Value
creation
Reach (acquire new
Big retail chain
User


customers)

discounts (group
buying)

Clear up inventory
for new price

Generate off-peak
Pay only for sales (no

Access to big
before service
Price discrimination
sensitive customers

Generate cash flow

Get to know new
demand
products or services
Low touch and effort
in their community
upfront costs)

Flash sale
Groupon claims that they ‘help the world’ because they “get people to try new things and
get small businesses cash flow”. While merchants agree that Groupon provides awareness for
their business as the above table indicates, A Rice University study surveying 150 local
businesses in 19 American cities, and 13 product categories that utilized Groupon deals in 2009
and 2010 indicated that 42% of businesses would never use Groupon again. These results
differ dramatically from the 97% reuse rate that Groupon touts. Many merchants found that
consumers were so price sensitive that they wouldn’t spend much more than the value of the
deal. The study also showed that of those Groupon deals that turned a profit less than 31%
returned to use it again and of the unprofitable deals, less than 13% returned to use the product
or service. The survey results call into question the perceived value creation versus the actual
value captured by businesses partnering with Groupon.
Monetary Value Captured per Deal
100%
90%
80%
50%
70%
60%
50%
40%
25%
30%
20%
25%
10%
0%
Monetary Value Captured
Groupon
SMB's
Customer
The chart (above right) displays the monetary value gained at the time of a Groupon sale
by Groupon (25%), the SMB (25%), and the customer (50%). However, over the long term,
businesses are becoming increasingly concerned over how valuable Groupon’s coupon
purchasers actually are. Studies have found that many Groupon consumers are either existing
customers, or extremely price sensitive consumers with no intention of revisiting a merchant. In
some cases, merchants have complained that Groupon deals have actually destroyed brand
equity as the Groupon name becomes associated with cheap advertising for failing businesses.
It is Groupon that is benefitting the most from its business model as its aggressive sales force
seeks out new SMBs to partner with, and its customer continues to save money on the deals.
Risk
Groupon’s business model enabled them to transfer some perception of risk away from
business customers. Instead of requiring businesses to pay an up-front fee for advertisements
or coupons that may never be seen or used, Groupon only charges the customer when the
consumer makes the purchase. This business model was critical in helping Groupon win new
customers since they did not have to bear significant risk by committing their sales and
advertising budget to a service without knowing how many customers they would receive.
Approaches to market definition and segmentation;
As the concept of daily deals has evolved and gained a significant following. Groupon has
been forced to evolve its strategy. Since the daily deals space has little to no barriers to entry,
Groupon has had to turn to other strategies to segment its market and grow its business.
Throughout 2011 Groupon has focused on growing its business through geographic expansion
of the current product, international expansion via acquisition, increasing user sign-ups, and
innovative marketing. The original Groupon model based on a standalone email generated the
most marketing exposure for businesses, but required higher costs in the form of commission
fees. Groupon introduced “Groupon Stores” to incorporate a degree of self-service to the
business. Through this format consumers can tailor their Groupon experience and choose the
merchants, brands, and services they were most interested in. Businesses are able to use the
platform to design their own deals and push the offer to consumers in a more targeted manner.
This new strategy removed the requirement of having a “tipping point” to validate the offer and
also allowed consumers to set whatever discount level they felt was appropriate, and finally a
change was made to the payment model so that merchants were only paid when the coupon
was actually redeemed.
Groupon has also introduced a Merchant Services platform, an e-commerce solution for
merchants. The service moves past focusing solely just on marketing and also offers a variety
of services including capacity planning, deal optimization, and editorial services. Businesses
are able to use the service to figure out what kind of deal would work best for them and what
kind of customer support they will need for the deal day.
Finally, Groupon recently introduced Groupon Now, a mobile application created to help
businesses manage their inventory more effectively. The application addresses the growing
number of smart phone users and provides greater connectivity between businesses and
consumers. The application is centered on providing consumers with deals immediately based
on their location and preferences. Businesses can choose when and where they want their
deals to be available.
Groupon is in a unique position where it has to think about market definition in increasingly
creative ways. Its original business model focused on SMBs has had to evolve to deal with the
entrance of competitors like Living Social. Groupon has not only expanded its geographic
presence, but has also explored linking deals in cities to other suburban zip codes to expand the
customer base and target other interested consumers. Groupon has also moved away from
solely targeting SMBs. In August of 2010, Groupon launched a nationwide deal with Gap that
resulted in 441,000 deals sold and $11 million in revenues.
Expectations for market growth
Groupon announced its initial public offering on November 3, 2011, and began trading on
Friday, November 4, 2011. The offering consisted of 35 million shares of Class A common
stock at a price of $20. Groupon is trading on The NASDAQ Global Select Market under the
ticker symbol "GRPN." Groupon finished up 30.55% on its first day of trading to close at $26.11
despite the fact that the company has never turned a profit and actually lost $389.6 million in
2010. The offering does give Groupon the flexibility to support and expand its business
channels. The sales heavy business model requires a lot of staff at a hefty price and Groupon
has already begun to cut marketing spending in an effort to reach profitability. As a public
company, Groupon will now face greater scrutiny from the press on its operations and success
rates in generating recurring business for merchants and also intense pressure from investors to
turn a profit with its operations.
Competition
Groupon almost immediately faced copycat sites. While they have been able to leverage
their scale, brand and effective sales force (and the occasional buy-out) to keep competition at
bay, Groupon will face a much harsher competitive environment as the advertising market
continues to mature.
Groupon is used to competing with niche group discount sites such as TravelZoo and
SavvyCircle that have more targeted industries, products and customer bases. While these sites
cannot compete directly with Groupon’s scale, they will contribute to slowly chipping away at
Groupon’s customer base.
Groupon’s most significant competition comes from the behemoths whose own scale makes
Groupon’s customer base look trivial. Amazon, Google and Facebook have all made plays to
challenge Groupon’s business model. Most significantly, Amazon has contributed millions of
funding to Groupon’s most significant competitor LivingSocial. (Gilbert, 2011) If Google can
monetize GoogleOffers and integrate it into their existing suite of advertising products, Groupon
will find it difficult to compete with Google’s more comprehensive suite of advertising products.
Perhaps most significantly, all of these companies can leverage economies of scale to lower
prices to local merchants, and possibly even offer superior products.
Exit Strategies
Groupon’s ecommerce business model does provide a flexible platform if it needs to exit a
market. The longer Groupon operates and the more deals that it sells, the more data points the
company has to analyze on what is working well and what isn’t succeeding. If the business
model isn’t successful in certain city or one of its business platforms fails, Groupon has the
ability to pull out of a city or cut a component of its business easily and move in another
direction. However, Groupon can expect to continue to receive increased competition from
Living Social, Amazon, Google, and Facebook. With the daily deal market reaching a saturation
point in terms of offerings, Groupon will have to continue to focus on finding and creating new
points of differentiation from their competitors to remain successful. Even more concerning
though is the fact that Groupon’s core business, local daily deals, actually shrank in the US in
the third quarter.
LOOKING FORWARD
…it is critical to understand exactly what Groupon’s key innovations and strategies were, what
their primary weaknesses are, and how they can improve their business strategy.
To date, Groupon has done a great job of building the market for online local group
discounts, but unfortunately (for Groupon), their meteoric success has not come from an
inimitable strategy, but from their ability to quickly capitalize on an innovative business model
and their status of ‘first entrant’. As the market matures, they will find that scale and
performance will no longer serve as effective barriers to entry. Their highly price sensitive
customer base will quickly switch providers when they can buy the same service more cheaply,
or a more sophisticated bundled product for the same price. Groupon’s impressive margins will
be quickly eroded as they lower their price to compete. Unless they can find a significantly
leaner operating model, their revenues could decline as quickly as they have grown.
The Emergence-Extension S-Curve helps us visualize the problem Groupon is about to face.
The company has extracted significant value from the emerging market of online coupons; the
market is maturing into the ‘extension’ phase, meaning they will either need to change their
business model to be able to compete on price, or they need to continue innovating products
and building the market so they can extend the ‘emergence’ phase. Practically, this means
innovating services for small to medium sized businesses that help them
Groupon has relied on scale to protect their competitive advantage so far. The CEO
describes the motivation behind their quick expansion:
"We realized the main barrier to entry is going to be scale. So we wanted to get
to as many cities as we can because we saw direct, outright, verbatim copies of
what we were doing, popping up all over the place pretty quickly. We said we can
either go chase them and beat them back and fight them legally, or race ahead
and do what we do, as best we can. So the choice was to not look back, and try
to be better and bigger." (Carlson, 2011)
Being ‘better and bigger’ has protected Groupon’s position so far, but they now face competition
from online behemoths that are bigger, and have the experience with online advertising and
marketing products to be even better. Google, Facebook and Amazon are three very strong
competitors who have already threatening Groupon’s model. Groupon has failed to develop long
term relationships with their customers, and consumers face very low switching costs.
Alternatively, Groupon can consider leveraging their scale and extensive customer base into a
more developed, defensible value proposition. Groupon will find it nearly impossible to continue
competing with their existing value proposition. They have successfully scaled their operations
and built a strong customer base and brand name, although their value proposition can be
considered limited compared with their biggest competitors (e.g. Google, Amazon). As a last
consideration, it is worth considering Ron Adner’s 3 principles of ecosystem carryover:
1) Minimum viable footprint
2) Staged Expansion
3) Ecosystem carryover
Groupon has developed their minimum viable footprint and successfully expanded to 250
markets and 50 million registered users. While Groupon continues to innovate only within their
core competency of online group discounts, they should consider whether there are more
sophisticated value propositions they can offer their customer base.
Strategic Vision
Much like Facebook and Google, Groupon will struggle to keep – or find - their identity as they
grow from a visionary local start-up to a public multi-national corporation. The directed – and at
times restricted – vision of the founder and CEO has kept Groupon on a clear and focused path
to scale. While Groupon has had issues in their short history with straying from their core
competency (they have dabbled with large national retailers (e.g. FTC (whose Groupon price
was higher than the price actually available on the website), or the Gap), on the whole Groupon
has been extremely directed.
As they grow, Groupon will struggle to find their feet as a ‘local’ company that is now spread
across 150 markets in North America and 100 markets in other countries.
A SWOT analysis of Groupon follows that will afford the opportunity to understand some of the
dynamics the company currently faces.
Strengths
Weaknesses
Scale: Groupon has 56% of the market, over
twice its next competitor
Company faces extremely high levels of
competition
Strong management team
Customer acquisition cost is rising steadily
Diverse geographic revenue base
Well capitalized
Company’s repeat business is declining and it
needs to find a way to increase customer and
merchant satisfaction
Opportunities
Threats
Productivity from the European sales force is
lower than here in the US which signals an
opportunity to increase revenue
The company currently faces possible
regulatory risk due to it being viewed as a gift
card in some jurisdictions
Huge $1.3 Trillion estimated market
opportunity
Traditional print media competitors are
entering the space as well as companies such
as Google and Amazon
Multiple product expansion possibilities
Changing payment terms from merchants
could restrict the company’s cash flow
Competition could drive down fees
Groupon currently operates in a highly competitive industry with barriers to entry that are
essentially non-existent. The company has gained an advantage by being an early mover in the
space which has allowed it to gain scale quickly. Although the company currently holds the
dominant market position, this position is under threat from companies such as Living Social,
Google, Amazon, and now even traditional print publications such as magazines and
newspapers. This competition has the possibility to drive down fees as the business becomes
more commoditized. Groupon now has the ability to charge fees higher than its competitors, but
this as well could become a thing of the past as competition increases.
Essentially, Groupon faces the problem that it can’t keep competitors from entering and it needs
a strategy of differentiation that will allow it to build stickiness from both its end consumers and
the merchants it serves. Differentiation for Groupon can come from several different possible
solutions which we will cover.
Groupon currently has no form of customer segmentation. As a result of this, many customers
have expressed dissatisfaction with their Groupon purchase experience as merchants are not
incentivized to treat the customers well nor are there often times sufficient room in the
participating businesses to cover the additional demand that the Groupon causes. This could be
solved by segmenting customers and deals through a premium program. That is, Groupon
creates different tiered experiences depending on price level and restricts quantity
appropriately. The limited volume of the offerings would be offset by higher margins from a
premium price point.
Another way to solve the dissatisfaction problem would be to implement time constraints within
the deal itself. As the model currently works, a customer purchases a Groupon which expires at
some point in time in the future. By restricting the deal into month long windows or something
similar, the merchant would be able to manage flow of customers, improving satisfaction and
thereby hopefully building customer stickiness for Groupon.
As Groupon looks for additional ways to grow the topline it has several options. One would be
instituting a secondary market for the deals. A large majority of deals sold by Groupon go
unused. This presents a problem from a customer retention standpoint in that if you buy
something and don’t use it, you are less likely to repurchase in the future. A secondary market
would create an additional revenue source for Groupon, and also possibly attract new
customers who are not familiar with the site who could then be converted to regular buyers.
To further differentiate the business Groupon has an opportunity to leverage its existing
customer data and use it to create custom offers or partner with local businesses to target
specific customer types which the company has been attempting to do:
“However, Rob
Solomon (COO) believes that, with the right strategy, the company can create competitive
barriers to shore up its dominant position. One way it is doing so is to make better use of all the
data it collects, for instance to personalize deals and help local businesses design their
Groupon offers. Last year the firm hired as chief data officer an executive from Netflix, a filmrental business noted for its data-mining skills. In America Groupon already tailors some offers
depending on the sex, location and buying history of a subscriber.” (Groupon Anxiety, 2011)
Groupon has done an excellent job of diversifying its revenue base and moving to a more
international footprint. The company now has twice as many merchants internationally as it does
in North America. However, the company averages 25 merchants per sales person in North
America versus 14 internationally, suggesting that there is ramp up to be had in international
markets.
Conclusion
Groupon has done an excellent job in creating a simple, attractive product that is easy to use
and has genuine value. The company is excellent at capitalizing on social marketing, has a
good site design, a catchy theme and an aggressive large sales force which has been able to
drive merchant signups. The company grew quickly with a model that was easily leverage-able.
However, the company faces a very competitive market where barriers to entry are practically
non-existent. While the company has done well against smaller players by relying on its scale,
this strategy will not work against players such as Amazon and Google. Although we have
suggestions on how the business can be improved, the lack of repeat merchants makes building
a customer stickiness based barrier to entry nearly impossible. For now, the company should
focus on gaining as much market share as possible as we see a future erosion of this market
share and an erosion of profitability for the company a near certainty.
Deconstructing the Groupon Phenomenon. (2011, July). Harvard Business Review.
Groupon Anxiety. (2011, March 17). The Economist.
The Dismal Scoop on Groupon. (2011, October 11). The Economist.
Carlson, N. (2011, October). The Truth About The World's Most Controversial Company. Business
Insider.
Coburn, M. F. (2010, August). ” On Groupon and its founder, Andrew Mason”. Chicago Magazine.
Duryee, T. (2011, November 7). Groupon Rolls Out Loyalty Program To Try To Make Merchants Happier.
Entrepreneurship.
Gilbert, J. (2011, November). Facebook, Google, Living Social: Groupon Competitors That Could Take
Over. The Huffington Post.
Johnson, E., & Marshall, J. F. (2011). "Groupon". Vincent L. Lacorte Case Series.
https://www.capitaliq.com
www.wikipedia.org
Class notes (Entrepreneurship and Innovation Strategy with Ron Adner)