Economics Discussion for online class - Essay Example

Economics Discussion Affiliation: The number of years that Groupon has been operational shows that the company has realized tremendous growth and development in all aspects of its business. The company engages in deals that exhibit broad coverage in terms of customer base, an aspect that can be attributed to its fast growth, development, and expansion. Due to the fact that competition in the market is inevitable, Groupon has had to design operational strategies that outperform rival firms. The market environment in which Groupon operates is perfectly competitive, making the company’s business model consistent with normative economic principles.

There are numerous players in the deals business line, and all players are required to engage in ethical, healthy, and fair competition. When Groupon started its operations in the year 2008, many of its rival firms were already operational and had undertaken ad business for several years. Search engine ad companies like Google and Facebook were already running operational and successful business lines. Groupon has integrated creative and innovative business strategies to rise above many competitors in ad business.

Its rapid growth can be seen to harm, fight, or gobble rivals in the industry, but its competition parameters are economically provided for. The company engages other firms in intense competition, an aspect that normative provides for. For this reason, the outstanding performance of Groupon is based on its operational strategies, as opposed to exploiting its rivals. Although business sustainability is a critical factor in Groupon’s business, copycats of its business model are readily present (Marin, 2011).

Therefore, Groupon’s business model is consistent with normative principles of economics.ReferenceMarin, S. (2011). “Groupon mania ignites fight for ad dollars with deals”. USA Today. Retrieved from http://www.usatoday.com/money/industries/retail/2011-06-14-groupon-ipo- anticipation_n.htm