(8 pages of text)
The collective buying industry has grown by leaps and bounds over the past several years, and Groupon stands out as a major player that has revolutionized this market. The case describes the beginnings of Groupon, as well as the firm’s rise to power, the rise of its numerous competitors, its decisions and expansion strategies, and the collective buying industry as a whole. Key demographic data about Groupon’s customers (consumers and small businesses) are also described, along with recent developments at Groupon and within the industry. While Groupon has undoubtedly discovered a unique model that takes advantage of a “white space” in sales and marketing to local businesses, it is unclear what the future holds for the company. Will it be able to sustain its incredible growth rate, or is its business going to peak quickly and then fade?
Students will learn and understand how the different components of a strategy combine to create a competitive advantage. The case demonstrates that although competitors may be able to copy one or more parts of a strategy, it is the holistic manner in which those parts combine that makes a strategy inimitable and therefore difficult for competitors to copy. Students will also learn how to sift through different options, going forward. This case is best suited to a discussion format.
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