Daily Deal or Lasting Success? Essay Example

Groupon faces a challenging dilemma in its current state due to intense competition and other factors that have impacted its ability to grow and thrive within a dynamic and ever-changing business climate. This represents a need to better understand the dynamics of the organization, its business model, and what should be considered as its future goals and objectives. The company faces a difficult set of challenges that have created new forms of tension and stress for the organization as its business model, once innovative and unique, is now commonly replicated in the industry without difficulty.

Groupon’s current framework must be able to gain flexibility as an innovator in order to remain one of the most prolific and remarkable businesses in the field. As a marketing opportunity, Groupon has thrived and has achieved great success with its business model and has been largely effective in achieving its goals at a higher level through its relationships with merchant partnerships (Falcone et.al). This has demonstrated the company’s ability to be effective in aiming towards a framework and system that catapulted the company to great success. However, this has been tested in recent years as the company has been duplicated in many different ways that have impacted its bottom line and its overall strategic growth; therefore, the company’s ability to expand has been affected (Falcone et.al).

Groupon has largely thrived on its ability to use information technology as one of its critical advantages, and as a result, the company has been generally effective in meeting the needs of its customers in many ways (Falcone et.al). Nonetheless, in an age where innovation is welcomed yet appreciation is not long lasting, it is likely that there will continue to be new issues that must be addressed that have an impact on the organization’s growth and longevity. It is the responsibility of Groupon at the juncture to determine how to maintain its unique approach to customer marketing and sales to ensure that it will continue as a formidable threat for the foreseeable future.

Resources

Groupon possesses a number of critical resources that have driven its overall success to date, such as its marketing capabilities, information technology, customer service, a variety of merchant partnerships across many different industries, and potential global expansion (Falcone et.al). This has reflected a need for the company to remain on the forefront of its industry and to remove as many competitors as possible from the equation in order to achieve effective results over the long term. In essence, the company has achieved great success with its business model to date, but continues to face stiff competition that must be addressed at a high level to achieve the intended results.

Groupon has made many investments throughout its tenure that have had a positive impact on the organization and its overall success; in addition, it has aimed to achieve greater marketing success with its ability to infiltrate many businesses with promotional tools to improve a business’ bottom line (Falcone et.al). This reflects the importance of understanding the dynamics of the organization and what is required to achieve success at a high level, while also considering other factors that impact its growth and development (Falcone et.al). Its ability to work with its affiliates has also made a difference in how the company addresses its competitors and what is required to achieve successful expansion to potential new customers in the virtual world on a continuous basis (Falcone et.al).

Groupon’s financial structure and capital have primarily focused on additional expenses on its marketing efforts in order to make a difference in its bottom line (Falcone et.al). This has reflected the importance of understanding where its marketing monies should be allocated in order to receive the greatest return on investment, and therefore, a greater ability to increase sales growth (Falcone et.al). It is important to recognize the value of this practice and what is required for the organization to achieve success at a high level, while also recognizing that within this type of business and with the competition that exists, change is constant (Falcone et.al).

The cost of doing business in 2011 was largely attributed to negative operating income, such as increased credit card fees and transactions with its merchant partners (Falcone et.al). These considerations are important because they convey the realities of a business with a high level of innovation and focus on marketing and sales to sustain the business for the foreseeable future (Falcone et.al). This reflects the importance of achieving a higher level of value and a focus on growth, while also recognizing the ever-changing customer presence (Falcone et.al).

Capabilities

The company’s primary capabilities have been largely focused on its ability to use information technology to its advantage and to recognize the importance of promoting greater value with its customer base (Falcone et.al). At the same time, the organization has thrived on its ability to use technology in new ways and with convenience in mind, as there are critical factors related to the development of programs to facilitate greater growth and mobility for its customers, such as smartphone applications (Falcone et.al). As a result, the company has been able to gain significant brand recognition in the minds of its customers because of continuous reminders of their presence on their smartphones. This is an important reminder of the company’s ability to be successful in its efforts to move forward in the future with increased technology at a customer’s fingertips.

The company has largely framed its capabilities on the success of its business model, given that they have aimed to be successful in identifying customer needs and preferences, including the types of products and services that customers are looking for (Falcone et.al). This reflects the importance of developing new ideas and approaches to facilitate growth and to enhance its competitive advantage on a larger scale. The company has created marketing efforts such as Groupon Goods to attract customers to specific products; Groupon Live, a joint effort with Ticketmaster to offer tickets at a reduced rate; Groupon Now!, which provides emerging deals that expire within hours to attract consumers’ attention on the fly; and National Deals, which have attracted partners such as Sony and The Body Shop (Falcone et.al). These issues reflect the importance of understanding the dynamics of marketing to a wider audience and in determining what is required of an organization to achieve full success in its efforts to grow and thrive under a given marketing strategy (Falcone et.al).

In essence, Groupon has largely impacted the way in which many consumers do business, purchase products and services, and even conduct their lives, as its many offerings may introduce new ideas and opportunities to its customers at a reduced rate that might not have ever been considered at full price. This has been a significant competitive advantage for the company, as many consumers often check for Groupon offerings before making decisions on different activities and products. This has been a significant issue and opportunity for the firm that has been successful in bringing the brand into the minds of its consumers on a regular basis and is embedded in their daily lives.

Core Competencies

As an organization with a strong brand reputation, Groupon has grown and thrived at a high level in many markets due to its core competencies and strengths. First and foremost, Groupon has been largely successful due to its name and its overall focus on customer offerings. This is a strong core competency because the name recognition is significant in bringing customers to the fold and to consider these offerings in the future. As the company has grown, it has recognized where its core strengths lie, thereby creating a means of understanding its core dynamic and overall ability to saturate the market in a positive manner with its brand name.

Organizational leaders have recognized where their potential lies and have been largely instrumental in working towards successful results in a number of key areas. The organization has aimed to provide a high degree of value to its customer base through its activities, thereby creating opportunities for sales growth and recognition (Week 1 Addendum). Value-added approaches are critical for the organization as it continues to expand its scope and presence in the national market and beyond, and remains perhaps the most recognizable name within this industry above even its closest competitors. In this context, its name provides significant value to its customers and supports its growth as its moves forward in a highly competitive marketplace. This is an important step for the company to take in order to achieve its desired growth and to meet expectations, while also considering other tools that may have a lasting impact on organizational and financial performance.

Groupon has established a sustainable competitive advantage with its historical capabilities, most notably, its brand image. This has been largely instrumental in supporting the continued growth and development of the firm, along with a means of securing its success in the future (Week 1 Addendum). The name Groupon in and of itself brings about a reaction in one form or another, and this reflects the importance of understanding how a brand signifies a company’s overall growth and opportunity in many ways. It is important to identify these tools in an effort to promote the company’s long-term success and achievement, while also considering other aspects that influence its ability to sustain its competitive advantage, even in a highly competitive and cutthroat industry.

Findings of Fact

Groupon has been largely successful in its efforts to produce successful results with its marketing and business model to date; however, the company has also struggled to achieve the desired level of growth in recent years as a result of intense completion within the industry. Other companies have emerged on the precipice of this marketing wave and have stolen much of Groupon’s thunder in different ways, thereby creating a difficult road ahead for the firm in many ways. Some of the most critical findings of the Falcone et.al are as follows:

• The organization has suffered as a result of the recession in recent years, as there became an ever-increasing want and need for coupons of various types (Falcone et.al). Therefore, many competitors began to emerge with similar ideals and competencies as Groupon to take over some of its prowess within the industry (Falcone et.al).
• Groupon has experienced a number of legal concerns in recent years with respect to jurisdictions, whereby there have been risks associated with copyright infringement, fee-splitting, kickbacks, and the use of Groupon vouchers in areas such as alcohol purchase/consumption and healthcare services (Falcone et.al).
• Some merchants are hesitant to partner with Groupon and to offer deals through the website, which impacts the company’s ability to meet its expectations with respect to marketing and sales; therefore, the company has struggled in some areas to retain existing merchants or to attract new merchants to partner with the business (Falcone et.al).

These issues reflect the need to develop additional marketing techniques and innovative technological approaches to doing business that will have a lasting impact on the organization and its success for the foreseeable future.

Recommendations/Justification

In response to some of the challenges that Groupon has experienced in recent years in light of a strong level of competition, the organization must develop a perspective and approach to its marketing, advertising, and technology-based business areas that will have a unique and lasting impact on the company and its overall representation within the market. With the intense competition that exists within the industry, it is more important than ever for Groupon to address its issues directly and to expand its focus on marketing and growth that will have a lasting impact and make an impression on its current merchant partners, prospective partners, and its customers over the short and long term.

Groupon possesses a unique structure that must be addressed more closely with respect to its legal requirements, as regulatory bodies and other issues must be identified and addressed in a practical manner to achieve successful results. This process requires the organization to examine its business model and how it manages its relationships with merchants so as not to expand at a level where they lack control over regulatory procedures. This would serve as a detriment to the company and create a sense of chaos that could ultimately pose a threat to its many partnerships throughout the United States and beyond.

Groupon must also continue to focus on new areas where it might be able to attract merchants as potential partners. This is an ongoing process that requires the company’s most innovative minds to make a difference in advancing its value-added agenda and its overall focus on new products and services to entice consumers. When merchants realize that they are likely to gain ground within their own industries through a partnership with Groupon, this may become a more attractive idea that would support the company’s continued growth and development at a high level. Therefore, partnerships must be appropriate and must also demonstrate consumer needs, based on marketing research that the company must conduct in order to determine the types of partnerships under which the company will achieve greater success and opportunity over the long term.

Groupon possesses a number of challenges and opportunities in its current state due to intense competition within the industry, along with other factors. Therefore, these considerations must be made in order to accomplish the desired objectives and to recognize the value of its business model and its overall ability to be successful in partnering with merchants who will further support a value-added strategy on a long-term basis. These objectives will demonstrate the importance of recognizing the importance of Groupon as a viable business model with the ability to remain sustainable for the foreseeable future. This process requires the organization to examine its core strengths and weaknesses and to recognize how its advantages in technology and other areas will drive current and future success.

The process of global expansion requires Groupon to examine its largest markets and to determine what has made these markets successful to begin with. This is likely to have a lasting impact on the organization and its overall ability to achieve greater promotion and satisfaction within the marketplace, not only with its current customers, but with potential merchants who have not done business with the firm in the past. Therefore, expansion will require the integration of the company’s most critical elements in order to achieve the intended results and level of success.

Works Cited

Falcone, Nick, Eric Halbruner, Ellie A. Fogarty, & Joyce Vincelette. “Case 11: Groupon Inc.: daily deal or lasting success?” Pp. 1-16.

Week 1 Addendum. “Discovering core competencies.” Pp. 1-13.