Groupon Case

In: Business and Management

Submitted By pratuchl
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Executive Brief for Groupon

To: Board of Directors From: Lindsay P
Re: Strategic Development Plan Date: August 7, 2013

Executive Summary

Groupon is an online daily deals company that originated in Chicago and quickly expanded internationally through acquisitions. As growth was enormous, Groupon became the market leader in the daily deal industry and decided to go public. However, since its IPO, Groupon has struggled to demonstrate profitability for its shareholders and stabilize its rapid growth. Two recommendations that will help Groupon create long-term value and profitability for its company are to strengthen its core business by operating only in the daily deals industry, and to develop a customer loyalty program in order to differentiate itself against competitors and gain loyal subscribers.

Current Strategic Position

Initially, Groupon started as a daily deals company that offered discounts on local services in large cities. Recently, however, Groupon has attempted to expand its strategic focus into the mobile payment and e-commerce industries in order to become the “operating system” for local commerce. In order to reduce competition and quickly build revenue, another one of Groupon’s strategies is to acquire copycat companies operating in large cities. Currently, Groupon is operating in 35 countries worldwide. Last year, Groupon was valued at $15.8 billion and is currently valued at $5.7 billion. If Groupon continues to focus on expansion in multiple industries instead of focusing on differentiating its sole daily deals business, this current profit performance is indicative of future financial failures as well.

Recommendations

Based on Groupon’s current strategic position, I chose to make the following recommendations in order for the company to capitalize on its core competencies and continue to operate as the…...

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