Transnational Management: Applied to the Case of
Groupon
Maastricht University
School of Business and Economics
Maastricht, Dec. 4th, 2012
Course: Global Business
Table of contents
Page
1. Introduction
2
2. Business model
3
3. Organizational Structure
4
4. Groupon’s corporate strategy
5
5. Groupons global strategy
6
6. Groupon’s entry to China
7
7. An Evolving Role
10
8. Conclusion
11
9. References
12
10. Appendix
13
1. Introduction
Groupon is a deal-of-the day Internet start-up company that was launched in 2008 in Chicago.
The website offers discounted deals for local as well as national companies. Now operating in more than 150 markets as diverse as the
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1969).
4. Groupon’s corporate strategy
As Groupon is established in many countries of the world, a global strategy has to be pursued on the one hand. This leads to a gain in brand equity, brand awareness and global efficiency.
On the other hand Groupon offers national as well as local deals, which caused the business to act locally responsive as well. Groupon, for this reason, can be considered transnational, as the company acts “more responsive to local needs while capturing the benefits of global efficiency” (Bartlett and Beamish, 2008, p13). Today’s MNEs compete in highly complex, diverse and constantly changing business environments. This is due to globalization of markets as well as acceleration of product and technology life cycles. Most importantly however is the intensification of global competition for Groupon. Most online services are easy to imitate. Therefore it has been of utmost importance that Groupon’s managers take the right actions and develop appropriate strategies. Groupon has access to highly educated international managers that sense and interpret complex and dynamic environmental changes.
These managers have developed and integrated multiple strategic capabilities in order to cope with today’s business world. As it was very hard for Groupon to enter foreign markets,
Groupon identified several companies that were interested in forming joint ventures. An important part of their global expansion strategy that
Groupon is a deal based business that brings customers discounted deals from the businesses. As a result of massive success and the growing competition, the business is faced with the option of either selling to Google or developing an effective marketing strategy for continuing its own. In the due context, the underlying report proposes a marketing plan for successfully dealing with the market challenges (Chatterjee, O”Keeffe, and Streiff, 2012).
Throughout this question, ignore all of Groupon’s costs other than the $150 paid to the merchant. The offer is announced on August 1st and it requires 100 customers to purchase the deal so that the deal goes through. For all of the questions below, if no transaction should be recorded, please explain why.
Groupon is an internet website company focused on generating revenue by utilizing relationships with merchants to provide consumers with discounts on select items. The goal of the discounted vouchers is to drive additional consumer store traffic and generate revenue for merchants which are shared with Groupon via a predetermined contractual percentage. Groupon generates visibility and exposure with email and social networking to increase consumer spending at specific merchants. Groupon has many features from personalization of product offerings to specific demographics and target segments. In addition, a more defined value proposition allowing merchants an opportunity to showcase their own product offerings on
Your local businesses may not have membership rewards programs (yet), but by placing their ads in a coupon book, they can deliver discounts to their new, as well as their regular customers. Offering discounts leads to loyal customers.
Andrew Mason, Founder & CEO of Groupon, had a big idea, but was not aware how massive it could grow. Before Groupon, Mason begun a website called ThePoint.org as a site for collective action, to get groups of people together to solve public and social issues. It wasn’t as effective as he projected, and so started to think of how he could take the group approach of ThePoint.org and turn it into a business channel. Mason believed the Internet had potential to change how people discover and buy from local businesses. That’s when Andrew Mason came up with the excellent concept for Groupon. “Part of Groupon’s success is the simplicity of its business model…” (Kerin & Hartley, p. 110) Groupon offers “Deal of the Day” coupons from local and nationwide
Groupon, Inc. (“Groupon”) is a company that specializes in local commerce. It has relationships with companies on a global scale and alerts consumers on the hottest deals with respect to shopping for various products, travel destinations, and popular spots, goods and services that a city has to offer. The stock ticker for the company on the NASDAQ exchange is “GRPN.” The company is listed under the sector ‘Technology’ and industry ‘Internet Information Providers.’ It started off as ‘ThePoint.com, Inc.’ but in October 2008 it changed its name to ‘Groupon, Inc.” Groupon was founded in 2008 by the now ousted CEO Andrew Mason. The current CEO is Eric Lefkofsky who initially invested $1,000,000 toward the development of the company. The Chief
In 2011, the director of staffing for coupons.com Ken Perluss, saw the need for a manageable system to find the right employees to keep up with the growing size of coupons.com. Purluss looked to Jobvite Hire and found the perfect match with them. With Jobvite Hire, coupons.com was able to fulfill their plan to double the size in employees in as little as six months (http://www.jobvite.com/portfolio/couponsdotcom/). It was interesting to find that in 2014, Retailer iQ was launched. Retailer iQ personalizes coupons sent to customers found in the companies database, sending customers items that interest and suit their needs (coupons.com ,2015). With the introduction of Retailer iQ, digital coupon transactions increased nearly 70% going from the second half of 2014 into the first half of 2015 (“coupons.com Incorporated”, 2015). Additionally, it was impressive to see that when coupons.com first filed for an IPO they opened the stock price at $16 and were able to trade for $31.22 (McGarth, 2014).
After discovering errors in its accounting and the failure to set aside enough reseveres for customer refunds, Groupon. Inc announced revision of its first financial results posted as a public company in April 2012, which resulted in a cut to its 2011 fourth-quarter revenue of $14.3 million. In addition, this revision has reduced its fourth quarter operating income by $30 million, net income by $22.6 million, and earnings per share by $0.04, due to an increase of operating expenses after compliance with GAAP.
What helped Groupon grow from the 400 subscribers in 2008 to the 60 million it has today has been largely due to the company’s ways of understanding their customer’s behavior. One of the main reasons they were able to grow in the way they did, was due to Andrew Masons understanding of the current social trends. By doing so Groupon was able to utilize the rapid growth of the Internet and technology such as mobile applications, reaching out to their customers in a quick and simple way, solving the problem of connecting with local consumers.
The three problematic areas that Groupon will face in its future are use and repeat purchases, managing its growth, and high levels of competition. For some of us we by our coupons months in advance and forget to use them which often leaves us dissatisfied about the purchase. Still with its lack of customer loyalty new subscribers are flocking to the website, which has created a demand for continuous expansion of the company’s infrastructure as well as goods and services that it offers. Moreover, the inundation of mobile devices has created some competition. Now anyone with a smartphone can save money on the spot. This has leveraged the competition against Groupon. For example will shopping at Kohls I used a 20% off coupon I found on my phone
The premise is simple -- companies get free coupon advertising without paying any upfront costs. Merchants sign up and agree to certain promotional limits, and Groupon does the rest.
Before Groupon was invested, there was company named The Point that was founded by Andrew Mason and it showed poorly which led failure. The purpose for The Point was to improve the online fundraising experience for businesses’ website but people were hesitant to contribute money to causes if they didn’t think the money would make a difference for the company but it failed due to not enough traffic into their website.
Groupon is a deal-of-the-day website that is localized to major geographic markets worldwide. Launched in November 2008, the first market for Groupon was Chicago, followed soon thereafter by Boston, New York City, and Toronto. Groupon has over 50 million subscribers across 300 cities in more than 40 countries. The idea for Groupon was created by Andrew Mason who is currently the company’s CEO. [update]Groupon serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 60 million registered users. The growth in the future is likely to be at a slower pace, primarily because the company is already one of the largest in the local deals space.
In my opinion Groupon is not a ready-to-go solution to the problem of low marketing budgets of many local merchants. If Groupon is good
With the internet technology, everyone can stay at home for online shopping. What’s more, if you can enjoy daily discounts with all the information, home delivery and 24-hours daily operation, that’s all can be found by buying Groupon. Groupon, the company has successfully captured millions of online consumers throughout the world. The marketing strategy of Groupon captures the consumer behavior. Consumer buying behavior, defined as... “The buying behavior of final consumers, individual and households who buy goods and services for personal”.Groupon consumers mainly responses to: