Groupon Swot Analysis
Groupon
Groupon, the fastest growing and biggest daily deal social buying site, was launched in November 2008 (Hughes and Beukes, 2012). It is an internet-based company that sells coupons for events, products and services. Competitors have entered the industry, essentially created by Groupon, which include LivingSocial.com and restaurants.com. Groupon includes customizable deal campaigns, credit card payment processing capabilities, discounted gift certificates usable at local or national companies, and point-of-sale solutions that help businesses grow and operate more effectively (Halliwell, 2014). According to Halliwell (2014), Groupon is redefining how traditional small businesses attract, retain and interact with customers by providing …show more content…
Nowadays, information technology is very important, and it is even more relevant for internet-based companies. I.T. helps companies to achieve the competitive advantage on the global market (Jakovic, 2012). I.T. not only includes the investment in computer equipment, it also includes applications to improve a diversity of business activities. Therefore it could be said, I.T. is the core of Groupon; it is used to improve internal operations, and also to communicate with customers, suppliers, and to manage information. Today, Groupon serves a wide range of industries, including automotive, beauty and fitness, consumer goods, electronics, entertainment, fashion, financial services, food and beverage, health, and travel (Groupon, inc., …show more content…
These issues are going to prove of great importance to the sustainability of Groupon. The threat of new entrants being low is realized as over 450 competitors have entered the market, through this massive increase Groupon has remained the largest and most well-known in the industry. Competitors such as LivingSocial whose clientele are considered “a little higher-end,” while Groupon’s clientele are considered to be “bargain hunters”; this negative stigma has steered merchants towards the competition. Also, according to Slater (44), competition such as “LivingSocial pays based on deals sold rather than those redeemed,” this is a better offer than Groupon for the merchant. Some businesses are losing money due to the fifty/fifty split of each coupon deal and the over sale of coupons. In fact, a study of 150 retailers showed that only 66% found their deals profitable (Noe, Hollenbeck, Gerhart, and Wright, 2013). A case study also indicated one vendor lost $8,000 by advertising a deal on Groupon.com; however, according to Arroyo (2011), “many businesses believe the exposure garnered by daily deal promotions is well worth the risk. On average, close to 80 percent of deal users are new customers”. Sustainability is also an issue due to few merchants realizing that, “Groupon does not produce anything of value, and they are not adding
Groupon, the fastest growing and biggest daily deal social buying site, was launched in November 2008 (Hughes and Beukes, 2012). It is an internet-based company that sells coupons for events, products and services. Competitors have entered the industry, essentially created by Groupon, which include LivingSocial.com and restaurants.com. Groupon includes customizable deal campaigns, credit card payment processing capabilities, discounted gift certificates usable at local or national companies, and point-of-sale solutions that help businesses grow and operate more effectively (Halliwell, 2014). According to Halliwell (2014), Groupon is redefining how traditional small businesses attract, retain and interact with customers by providing …show more content…
Nowadays, information technology is very important, and it is even more relevant for internet-based companies. I.T. helps companies to achieve the competitive advantage on the global market (Jakovic, 2012). I.T. not only includes the investment in computer equipment, it also includes applications to improve a diversity of business activities. Therefore it could be said, I.T. is the core of Groupon; it is used to improve internal operations, and also to communicate with customers, suppliers, and to manage information. Today, Groupon serves a wide range of industries, including automotive, beauty and fitness, consumer goods, electronics, entertainment, fashion, financial services, food and beverage, health, and travel (Groupon, inc., …show more content…
These issues are going to prove of great importance to the sustainability of Groupon. The threat of new entrants being low is realized as over 450 competitors have entered the market, through this massive increase Groupon has remained the largest and most well-known in the industry. Competitors such as LivingSocial whose clientele are considered “a little higher-end,” while Groupon’s clientele are considered to be “bargain hunters”; this negative stigma has steered merchants towards the competition. Also, according to Slater (44), competition such as “LivingSocial pays based on deals sold rather than those redeemed,” this is a better offer than Groupon for the merchant. Some businesses are losing money due to the fifty/fifty split of each coupon deal and the over sale of coupons. In fact, a study of 150 retailers showed that only 66% found their deals profitable (Noe, Hollenbeck, Gerhart, and Wright, 2013). A case study also indicated one vendor lost $8,000 by advertising a deal on Groupon.com; however, according to Arroyo (2011), “many businesses believe the exposure garnered by daily deal promotions is well worth the risk. On average, close to 80 percent of deal users are new customers”. Sustainability is also an issue due to few merchants realizing that, “Groupon does not produce anything of value, and they are not adding