Groupon

Key External Factors

Weight Rating Weighted

Opportunities

1. Online sales expected to rise annually 19%.1 3 .3

2. Digital products are leading the industry's growth.07 3 .21

3. One stop shopping centers are growing in popularity .08 4 .32

4. Potential success of 'customer centricity' .08 3 .24

5. Percentage of households with at least one computer.06 3 .18

6. Industry-wide increase on ROE.04 3 .12

7. Companies reputation.07 4 .28

Threats

1. Leading competitors have lower cost structures.09 2 .18

2. Variety of competition nationally, regionally and locally.09 2 .18

3. Dollar value down 15% compared to GBP over the year.03 1 .03

4. Price wars.1 2 .2

5. Decrease in disposable U.S dollars.07 2 .14

6. Attorney general's price fixing enquiry.06 1 .06

Total 1.00 2.56

Introduction

To recap, the macro-environment is the most general environmental stratum that included Industry, itself made up of markets and competitors identified by the organization on which we focus. Groupon customized their products according to the needs of their corporate customers instead of standardizing which type of discount to issue. Groupon's long term strategy is to provide large savings to their customers. Groupon captured customer's hearts by giving large discounts and flexibility in customization (www.techcrunch.com).

There were few limitations on internet such as dependence on external service, awareness and little incentive for repeated visits. (Henry, Gallagner and Gilmore, 2007) Groupon reduce dependence on external service by creating its own cashiering system. To rectify the problem of little incentive for repeated visits, Groupon gives $10 credit to customers who introduced their friends to purchase. To create more awareness, Groupon used social media such as Facebook generate responsiveness. After all Groupon used simple and innovative methods to solutions to overcome limitations of internet (Underwood, 116-118).

Discussion

E-price strategy is about setting the right price in the internet. To be successful in e-price strategy, a company needs to have a lower price than shops and stabilise customer satisfaction while keeping costs low. Groupon's prices on e-coupons for services were at least 50% lower than prices for services at shop level. To maintain customer's satisfaction, feedbacks from customers are crucial (Sherr, 4). Groupon set up a review website for customer feedbacks to reduce costs from traditional feedbacks gathering method. After all, Groupon successfully used e-price strategy by issuing large discounts and setting up a website for feedbacks to improve customer service and reduce maintenance costs (Surowiecki, 46-49).

E-place strategy is the availability of the product to the consumers in the internet. In order to be successful in e-price strategy, a company needs to reduce re-stocking costs, appraise right distribution activities and replace traditional posting services (www.The Atlantic.com). Groupon reduced restocking costs to zero by creating their coupons in digital format. Groupon used the right distribution method by enabling their products to purchase on their website. Also, Groupon replaced traditional postal services by emailing their products. After all, Groupon is successful in e-place strategy by having a zero restocking costs, right distribution channel and replaced traditional posting services.

E-promotion strategy is informing and persuading customers to purchase a firm's products in the digital world. In order to achieve ...