Groupon Background

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[Type the document title] [Type the document subtitle] [Pick the date] [Type the company name] Vaio Summary Contents About Groupon……………………………………… 4 The History of Groupon………………………….. 4 Groupon’s business model…………………. 5 Type of business………………………………….. 7 Products/Services provided by Groupon…………………………………….. 7 Strategy formulation and planning………….. 8 Groupon Plans………………………………………… 9 Financial Status…………………………………….. 9 SWOT Analysis……………………………………. 10 Competitors Analysis………………………………. 13 Business and economic climate…………….. 14 Management structure………………………. 16 Groupon Infrastructure………………………… 16 Future of Groupon……………………………… 17 Recommendations……………………………….. 17 Background * About Groupon Groupon is a website…show more content…
Economies of network in Groupon’s model arise, as soon as threshold is reached, in the form of discounts (coupons or voucher) to consumers who participate in the network—the larger the threshold, the larger the discount. This means that economies of networking arise on the demand side of the market, as a result of the strengthening of the consumer bargaining power with product sellers. Local businesses participating in Groupon’s offerings have a dual benefit. On one side, they can get a guarantee demand for their products, getting rid of excess capacity and attaining economies of scale. Second, and perhaps more important, Groupon’s offerings create Word-of-Mouth and buzz for new products and services, helping them reach the “tipping point.” How does it work? The core of Groupon is 50% off deals from retailers of all kinds, sold via email directly to consumers in a "one day only" sale offer. For example, a $40 hair styling is for $20. The consumer pays $20 to Groupon and gets a certificate to redeem at the hair salon. The certificate may expire in one year or less. Groupon keeps 50% of the revenue, $10 in this case, and remits --$10 to the hair salon. Therefore, the customer gets a $40 hair styling for $20. Groupon keeps $10 and the hair salon gets $10.The way the Groupon model works the retailer is effectively discounting their product or service by 75%, the
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