Groupon Company

Groupon Company

For the first time, the Groupon Company never seemed like it could do anything wrong, is that it was the fastest-growing company ever and soared from zero to billions in evaluation seemingly overnight. And now in the past ten years, its stock is hurling back to earth, that has left many clients, users and investor wondering what went wrong.  According to Hughes et al., (2012), the Groupon business model failed due to pure greed, the business would naturally ask the merchant to offer a discount of fifty per cent on food deals, and would still take a fifty per cent commission on whatever was left. The Groupon International extension was at times uninspiring, and the difficulty was that the daily deals model it commercialized was unstable to start with (Hughes et al., 2012). Groupon was touching into international markets with the model that was meant to have short existed as the deals it was peddling.

Groupon has failed, it has had bumpy roads in countries like China and South Africa, and this has been as a result of an overly confident business model. Groupon met a problematic battle from the initial stages owing to its arrogance, and it had embraced a policy of using higher salaries to steal competitors’ top workers and expected that similar procedure would somehow work in other countries like China.  The Groupon Company was sometimes seen as the creditor of last resort when every other avenue of cash flow had been drained, unfortunately from the Marketing perspective, Groupon has not been a bearable business model (Beukes et al., 2012). Groupon can legitimately blame its international expansion on its present woes and failure, and it was much focused on the unsustainable growth without giving much care for the merchants.

Will the Groupon make the changes it needs to survive and can it save itself before it is late? Here are some of the ideas that can save the business. Groupon should have focused on the growth without ignoring the profitability or the merchants’ needs. With a strategic team and the right CEO, it could have rightfully pivoted their business model, discounting for most of the merchants was only a temporary early solution to launching a viable smallest product to get customers in the door (Dutta et al., 2014). The Groupon actions in the distant parts of countries like China were not supposed to be run by foreigners that were having a partial understanding about the native nuances of the Chinese market, and these foreign managers were handling Chinese workers in a Western-style and in some cases witnessing very small effectiveness, this made Groupon experience terrific employee turnover in China.

The Groupon should have stopped ignoring the critical element of their consumer retention, and they need to place much emphasis on helping the business maintain their new customers as they do in inviting the new ones. Groupon is one of the most excellent customer acquisition tools ever created, it is awful at helping those businesses to get the clients back. Therefore, what the Groupon’s consumers critically want are the knowledge, training and tools to maintain the customers that approached in because of the Groupon offer (Beiles et al., 2012). The merchants often discover themselves fighting against each other for a part of the market; on the additional side, the customers should be allowed to choose a new ‘favourite’. The Groupon should also show their clients how to grow and improve their conditions.

References

Hughes, S., & Beukes, C. (2012). Growth and implications of social e-commerce and group buying daily deal sites: The case of Groupon and LivingSocial. International Business & Economics Research Journal (IBER), 11(8), 921-934.

Beukes, C., & Hughes, S. (2012). An investigation of mergers and acquisitions as the growth and globalization strategy for Groupon. World Review of Business Research, 2(5), 108-127.

Dutta, S. K., Caplan, D. H., & Marcinko, D. J. (2014). Growing pains at Groupon. Issues in Accounting Education Teaching Notes, 29(1), 55-77.

Beiles, K., Humphrey, T., Solarz, E., & Harrison, J. S. (2012). Groupon, Inc.