Groupon is American based global e-commerce business or a marketplace, which connect its subscribers with all the local merchants who are offering goods, services, travel, activities and trading products across 28 countries. It has to face tremendous competition and various challenges in the market, but it is successful in making its own distinctive position and gain competitive advantage over its competitors (Goupon, 2018). Groupon’s plan of action depends on three financial ideas that enable the organization to appreciate leverage over its rivals; “economies of the systems-administration”, “economies-of-scale,” and “energy of Buzz and WOM.”( Mourdoukoutas, 2011).
Groupon is able to compete in the market and maintain its position because of its economies of system in its model emerge, when a specific limit is come to, as rebates (coupons) to customers who partake in the system—the bigger the edge, the bigger the markdown. As clarified in Groupon’s site; “each day, Groupon messages its regular customers, one incredible offer on something amazing to do in the city. It offer customers awesome esteems by ensuring organizations a base number of clients. In any event that a particular number of individuals join, at that point everyone gets the opportunity to avail the Groupon offer. In the event that a particular base isn’t achieved, at that point nobody gets it.”(Groupon, 2018).
Groupon’s offer has made word-of-mouth and alertness for new goods and administrations among the consumers, helping them come to the “tipping point—” a critical factor for showcasing new items and administrations. Basically, Groupon is transforming buyers into “item evangelists,” which is just the same old thing. Amway and Avon items have been abusing this thought for a long time—however in different context, transforming customers into business people and free entrepreneurs, instead of item evangelists. Groupon appreciates solid brand acknowledgment given the sheer number of endorsers, which went up in the final quarter of 2011 by 275% from the tantamount quarter a year ago to 33 million. Income has been on a lofty upward direction, which is higher than competitors (Ayodeji, Tunde, and Adebowale, 2015).
The organization offers bargains from countless spreading over an enhanced scope of items and administrations that take into account many gatherings of purchasers. Groupon is geologically enhanced. It works in the U.S., as well as in no less than 45 different nations over the globe. The organization does not have any obligation on its asset report. Groupon has the chance to go past its center business of offering day by day arrangements to end up noticeably an internet business website like Amazon or eBay. Groupon can be a potential procurement focus for bigger organizations, for example, Google, Facebook or Amazon.com, utilizing its endorser base and brand esteem. As it is a universally perceived brand with operations in more than 40+ nations. To begin with first mover’s advantage, it is the biggest organization in the day by day bargains advertise with 400,000+ dynamic arrangements internationally. It has approximately 50 million dynamic clients with solid incomes. Market entrance of portable applications has expanded, Groupon can use this market with its applications (Edelman, Jaffe, and Kominers, 2016).
References
Ayodeji, O., Tunde, N. and Adebowale, A.E., 2015. An Appraisal Of Groupon E-Business Model. International Journal of Scientific & Technology Research, 4(1), pp.291-297.
Edelman, B., Jaffe, S. and Kominers, S.D., 2016. To groupon or not to groupon: The profitability of deep discounts. Marketing Letters, 27(1), pp.39-53.
Groupon, 2018. About us. [Online], Available at: https://press.groupon.com/about-groupon/, [Accessed on: 18th January, 2018].
Mourdoukoutas, P. 2011. Groupon’s advantage. [Online], Available at: https://www.forbes.com/sites/panosmourdoukoutas/2011/11/04/groupons-advantage/#2a2ad09e4ef3, [Accessed on: 18th January, 2018].