1. What are the key decisions that Andrew Mason has made during Groupon’s brief
ID: 445332 • Letter: 1
Question
1. What are the key decisions that Andrew Mason has made during Groupon’s brief history? How have these decisions influenced Groupon’s evolution as an Internet-based business?
2. How would you describe the decisions identified in your response to question 1 in terms of programmed and nonprogrammed decision making
3. How would you describe these decisions in terms of the rational, bounded rationality, and garbage can models of decision making?
4. How, if at all, has creativity and intuition played a role in the decisions to found and rapidly expand Groupon?
5. Suppose that you think the market for group-based online coupons has great potential, and that you desire to enter the competitive fray. What factors would you consider in making a decision on whether or not to become a Groupon competitor?
Explanation / Answer
1.
1. Andrew Mason took some of the major decision's during his reign as the CEO of Groupon. Some of them were :
a. Opting not to sell to Google. In late 2010 Google made a $6 billion buyout offer to Groupon Mason, however, rejected the buyout offer.
b. Groupon gave offers that expired just after few hours and cancelled them if they did'nt get minimum buyers for the same.
c. In early June 2011, Groupon filed paperwork with the United states’ Securities Exchange Commission (SEC) for an initial Public Offering (IPO) of stock
d. He decided to author a lengthy, profanity-laden memo that was promptly leaked to the press in the middle of the company’s pre-IPO quiet period. In the memo, Mason touted Groupon’s prospects and trashed the financial press for critical coverage of the company.
e. The company collects, not just profits but also half of actual sales in introducing a new customer.
f. Mason made the decision to bring in a customer relationship manager. This help the company keep merchants past one deal,which played a big role in the evolution of Groupon
2. I think, b, c and e were programmed decisions. Because, they could be guided by business rules and company policies. The rest of the decisions were non programmed and based on Mason's intuition and judgement.
3. I think the decision to hire a customer relationship manager, and to collect, not just profits but also half of actual sales in introducing a new customer was based on the principle of bounded rationality. All his decisions were well thought. However, the decision in part d could be considered as a garbage can decision and was more situational.
4. The decisions were intutive and certainly increased groupon's subscriber base and global outreach. In spring 2011, Groupon Inc. was said to be worth as much as $25 billion - an amazing valuation for a company that still isn't four years old. At one point in 2012, Groupon was growing 45 % year on year basis.
5. Factors such as existing customer base and market share of groupon, success of its business model, global outreach, market saturation level should be considered before becoming a Groupon competitor
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