Groupon Background

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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 that offers special deal on a product or service in one category on a daily basis. Deals are segmented by location, so users do not get information on items that are not relevant to them. The concept is relatively simple and is based on collective buying power. This means that a deal will only go through when a certain number of individuals have purchased that particular deal. The merchant is responsible for determining what number is required for the deal to become valid. This is commonly referred to as the tipping point. Only once this tipping point has been achieved will the payment be processed and the user will receive access to the coupon.

The Group on website allows users to see how many people have already purchased the deal as well as how many remain for the deal to become complete. Users can share details of a particular deal with their own network via social media out lets such as Twitter and Facebook. Users can choose to go directly to the Group on website to search for deals, or they can opt to receive a daily email letting them know the relevant deals of the day. Groupon is currently located throughout most major cities in the US and Canada and is present in over 44 countries around the world. * The History of Groupon

Groupon , a word combining both Group and Coupon, is the brain child of Andrew Mason. Mason is your average 30-year-old guy, a music major and self-taught programmer from Pittsburgh.

Although he has always been entrepreneurial. Mason receive dagrant for his first idea for a website called ThePoint.com ,an online platform for petitioners to gather support for their causes. Although it initially received positive feedback, the site was not headed in the direction that Mason wanted and revenue was not sufficient (revenue was brought in through advertising).

Mason then started a blog called get your groupon.com that offered readers a different deal from various vendors on a daily basis. He was encouraged by his investors to continue pursuing this avenue and with the help of seven employees this idea eventually morphed into Groupon. In the beginning, Mason and his crew would call up to 100 businesses a day to get them to list a deal with them. The deals needed to be something new and different than any other previous offer the company may have provided as well as lower in price. A minimum number of buyers were agreed upon by the company and if Group on was able to achieve this minimum (the tipping point) then Groupon itself would make money. If they did not achieve the minimum, the deal would not go through and no money would be generated for Groupon. * Groupon’s business model

Groupon’s business model is based on a combination of “economies of networking” and “economies of scale.” Typically, economies of networking are the benefits...
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