read SCENARIO and answer the question Groupon After graduating with a degree in
ID: 420654 • Letter: R
Question
read SCENARIO and answer the question
Groupon
After graduating with a degree in music from Northwestern University, Andrew Mason spent a couple of years as a web designer. In 2008, the then 27-year-old founded Groupon, a daily-deal website that connects local retailers and other merchants to consumers by offering goods and services at a discount. Groupon creates marketplaces by bringing the brick-and-mortar world of local commerce onto the Internet. The company basically offers a “group-coupon.” If more than a predetermined number of Groupon users sign up for the offer, the deal is extended to all Groupon users. For example, a local spa may offer a massage for $40 instead of the regular $80. If more than say 10 people sign up, the deal becomes reality. The users prepay $40 for the coupon, which Groupon splits 50-50 with the local merchant. Inspired by how Amazon.com has become the global leader in ecommerce, Mason’s strategic vision for Groupon was to be the global leader in local commerce. To target and fine-tune its local deals, Groupon relies heavily on human labor to do the selling.
Measured by its explosive growth, Groupon became one of the most successful recent Internet startups, with over 260 million subscribers and serving over 500,000 merchants in the United States and some 50 countries. Indeed, Groupon’s success attracted a $6 billion buyout offer by Google in early 2011, which Mason declined. The spurned Google later created its own daily-deal version with Google Offers, and later Amazon (via its acquisition of LivingSocial) and Facebook with its Marketplace also moved in. In November 2011, Groupon held a successful initial public offering (IPO), valued at more than $16 billion with a share price of over $26. But a year later, Groupon’s share price had fallen 90 percent to just $2.63, resulting in a market cap of less than $1.8 billion. In early 2013, Mason posted a letter for Groupon employees on the web, arguing that it would leak anyway, stating, “After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today.”
Groupon’s ability to drum up more business for local retailers by offering lower prices for its users is an example of which of the VRIN criteria?
Rare
Inimitable
Non-substitutable
Valuable
1 points
QUESTION 12
Groupon’s first mover advantage in the “group coupon” market is an example of which of the VRIN criteria?
Valuable
Rare
Non-substitutable
Inimitable
1 points
QUESTION 13
The entry into the “group coupon” space by companies such as Google, LivingSocial, and Facebook demonstrates a breakdown in which of the VRIN criteria?
Rare
Non-substitutable
Inimitable
Valuable
1 points
QUESTION 14
The ability for other firms to imitate a rare and valuable resource in the “group coupon” space is directly linked to which of Porter’s Five Forces?
Power of Buyers
Power of Suppliers
Threat of New Entrants
Threat of Substitutes
1 points
QUESTION 15
Assuming Groupon’s core competence was initially valuable and rare, what type of competitive advantage could it expect?
Competitive parity
Sustainable competitive advantage
Temporary competitive advantage
Competitive disadvantage
Rare
Inimitable
Non-substitutable
Valuable
Explanation / Answer
11. Valuable
In this case group on generally makes organizations or firms more effective and efficient by implementing various strategies used.
12. Rare
This is rare idea and is generally not easily available to the organizations who are competitors on this field.
13. Inimitable
As it has been adopted by various other organizations hence they are easily implementing the same which was not at all easy initially.
14. Threat of new entrants
This two factors are related based on the concept, idea and approach of the idea.
15. Sustainable Competitive Advantage
Based on the success and uniqueness of the idea the organization considered the same because it was unique and new.
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