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Is Groupon's Business Model? Is It Sustainable?

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Is Groupon's Business Model? Is It Sustainable?
Assignment 1

Assignment 1 is worth 10% of your final grade, and should be completed after Lesson 3. It has two parts.

Part A: seven short-answer questions worth a total of 35 marks
Part B: two case analyses worth a total of 65 marks

Part A: Short-Answer Questions (35 marks total)

1. What are the major similarities and differences between the Google and Yahoo business models?
Similarities between the business models of Google and Yahoo are that they are both Internet and computer software companies, they both have maps capabilities, searching abilities, instant messaging, finance portals, they are both free, they provide email services for consumers, they both are creative companies, and they give their consumers the ability to create
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Is it sustainable? (10 marks)
Groupon’s business model is one that focused its main goal on growing as fast as they could. They knew that customer acquisition was necessary to achieve to make their company grow into a publicly traded corporation, but their business model was based on planning and preparing for short-term initiatives. Their business model also lacked a strategic plan that took long-term goals into consideration. Groupon is a business that is based on offering daily deals to subscribers from local companies. A group of approximately twenty-five people have to buy into the Groupon deal to receive the purchased coupon (Turban, 2012). The company’s business model encourages their subscriber’s invite their friends or family to participate in the deal so that they can get the
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Groupon is strong in their value proposition that asks consumers why they should buy from Groupon. Groupon is strong in this aspect because they offer their subscribers some personalization and customization options for certain deals, they offer a discounted price which is appealing to consumers, and Groupon facilitates transactions and manages the delivery of the coupon. With regards to Groupons revenue model, the company is lacking. The company knows that to generate profits they must have an advertising revenue model, a transaction fee revenue model, and a sales revenue model, but the company is focused on short-term gains and lacks the ability to plan for and produce a long-term return on investment capital. Groupon is strong when it comes to considering their market opportunity. The company divides their market opportunity into smaller niches such as different categories for deals, and different locations so that consumers can find a deal in their area (Turban, 2012). Groupon is strong with regards to their market strategy, competitive advantage and is involved in a competitive environment depending on geographical location. Although there are other deal sites like Groupon it is still a preference and a leader, they know how to enter

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