Cupon Wars

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  • Topic: True Blood, San Diego Comic-Con International, Shel Dorf
  • Pages : 6 (1983 words )
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  • Published : May 17, 2013
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Economic & Administrative Sciences School
Company Case
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Groupon vs LivingSocial
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Present by: Alejandra Bernal, Vanessa Carreño, Víctor Baquero, Juan Manuel Erazo, Juan Andrés Rodriguez

Background

This case is about Groupon and LivingSocial, two organizations involved into the sell coupons business. Groupon is the largest and leader in the market; Living social is trying to catch up customers from Groupon. Groupon has more the 50 million subscribers and valuable in more than 6 billion dollars (turned down this offer from Google) instead Living social has 17 million members and the business is valuated in 1 billion dollars. One cause of this advantage is the success that Groupon had in 2010, when obtained a significant growth, in fact Groupon was in Q4 in 2009 and in Q1 in 2010.The rise was reflected in nearly all major sales per metric, from average buyers per deal (111%), average deal price (from 27,2 dollars to 38,36 dollars), average gross per sale (102 percent) and unique visitors (from 900 000 in September of 2009 to 3 000 000 in march 2010). In 2010 LivingSocial was the second group coupon site visited with a percent of 0,033 to 0,036 respects the first. The case talks about some issues and business moves but particularly about one between LivingSocial and amazon in which it gives 20 dollars gifts cards just by 10 dollars; this was shocking because Amazon is a big organization and not a small local business. Nevertheless they had an added twist and LivingSocial purchased the gift cards and sell them directly and living social purchase the gift cards at face value and absorbed the losses. The reliability of this business consist in the 1,3 million coupons LivingSocial managed to sell because it generates 11 million in sales (Beating Groupon in a similar deal with Gap); Later Amazon invested 175 million dollars in LivingSocial (in December 2010). The model of websites used for this kind of business is straightforward and is used as marketing tools for local business generating publicity and facilitating transactions. For Groupon the way they act is offering coupon geographically and deal with local retailers (different business); the discounts can be significant (50% to 90% off) and Groupon takes 30 percent of sales after the discount. In 1848 was clear that this kind of business were not about creating profitability but generating increase in name exposure, driving sales volume and pulling in new members. It is clear that between more members, these companies will bring better deals for customers, generating revenues too; The head start of Groupon obviously give it an important advantages and today is well positioned and difficult to reach; other companies try to catch its market and still finding deals to call the attention. Regardless, the barriers to entry are low and the technological advantage is minimal, there is a little preventing for local vendors and buyer from using multiple platforms. For the moment the organizations present a non-subscriber fatigue from the advertisements and the model is viable; the issue is to grab more subscribers.

Updating:
True blood has in total five seasons from 2008 to 2012. The second season was present in 14/04/2009. The third season was the 3/12/2009. A series based on The Southern Vampire Mysteries, this series has a genre as horror, drama and fictitious. In 2010 some people believe that how the series True Blood has so many successes the producers have the idea of launch the series to the big screen. For this idea the director in mind was Alan Ball. The same year appears a parody/porn version of the series, and Sesame Street also launches his own parody called “True Mud”. In 2010 HBO launches the first comic of the series, in association with IDW Publishing and Diamond Comic Distributors. Some stars want to participate in the series, like Lindsay...
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