Retail Industry Focus: Groupon

 One who sells goods or commodities directly to consumers. ◦ r.htm r.htm  Examples ◦ Wide Range  WalMart  Target  Department Store  Kiosks  Small, family-owned boutique

 Launched in November 2008  Retail Oriented Website ◦ Leader  The players ◦ Retailers featured on Groupon, Consumers, and Groupon itself  Use ◦ Easy-to-use and simple website

 Porter’s Model ◦ 5 Competitive Forces  Bargaining Power of Customer  Strong Force  Threat of Substitution  Strong Force  Bargaining Power of Suppliers  Medium/Weak Force  Threat of New Entrants  Growing/Strong Force  Rivalry  Medium/Weak Force

 So how does Groupon make a profit when it is selling coupons at discounted rates from 50-90%? $$$ ◦ Good retailer  sell more coupons  make more $$$ ◦ Maintain good relation with retailer  Set a maximum and minimum # of customers  Time limit on coupon  Expiration on coupon

 Simple website ◦ , Facebook, Twitter ◦ Groupon Website Groupon Website  Mobile applications ◦ Redeem coupon via smartphone

 Aforementioned threat of substitution or new entrants  Problem with transparency of accepting retailers  Using $$$ from new deals to pay off loss of old deals

 Uncertain ◦ Oversaturated daily deal market ◦ Problem with consistent growth ◦ Just started to trade publicly  Stock price continuously decreasing