BUSINESS STRATEGY AND POLICY

Business Strategy and Policy Assignment #3

Business Strategy and Policy Assignment #3

Introduction

Groupon has a unique place as the leader of the daily deal market. Repeatedly called “the fastest growing company ever,” just three years after launch Groupon hosts more than 900 deals every day, has 70 million subscribers in 46 countries, and employs over 7,000 people (Securities & Exchange Commission 2011). Although it has established a strong international brand and created an estimated 10 billion dollar market out of nothing, the low barriers to entry have allowed for the quick creation of numerous competitors (Marketwatch 2010). Groupon is now struggling to identify how it can differentiate its offering beyond just having a large volume of subscribers and global reach. In this paper, I perform an internal factor evaluation on Groupon, exploring its strengths and weaknesses.

Groupon's Strengths

Leading the Change

It is also essential for key leaders to be actively involved change management when any new strategy is rolled out. Management must build consensus and enthusiasm for any new initiative with its employees so that a smooth and successful transition occurs. Another crucial aspect of plan alignment is proper training. At Groupon, there are about 150-200 new hires a month in Chicago alone, which presents challenges to time and resources. Groupon is extremely caring about its people and believes in the concept of human capital adding value to their firm and thus puts the necessary time into educating everyone on the corporate culture, mission and values. Groupon 2.0 plans to leverage those strengths in a way that improves the deals subscribers see to make them more relevant to them based on location and preference. The corporate culture in Groupon is unique as it exemplifies their mission and values (Marketwatch 2010). Groupon's value chain management (VCM) is an extensive process that begins with the negotiations with buyers to delivery of purchased vouchers to customers. Inbound logistics for the firm are quite simplistic. Leads are generated by the marketing department and passed to the sales representative for the respective city in which the potential vendor is located (Parekh 2011). The sales reps often work in teams of two to five people depending on the size of the market the city is located in. When a deal is made with a vendor, the sales rep works directly with the business to finalize the terms of the offering and places the deal in the pipeline (Business Insider 2011).

Business & Corporate Level Planning

Groupon was the first major daily deal provider, which has given it a great advantage over emerging competition. It has been able to leverage its first-mover advantage and cost leader strategic management. Groupon uses its cost advantage in the market to act as the central voice for people, driving bargains using economies of scale in local markets that would otherwise be unavailable to the average person. Also, Groupon is well positioned to benefit from the proliferation of technology and mobile communications, and so far has expanded its technology presence in a ...