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Groupon Inc Core Competencies - Case Study Example

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got its name from a combination of “group” and “coupon” and it was launched in October 2008. Forbes Magazine declared it in August 2010. It serves in 150 markets in North America and 100 markets in Europe, Asia and South America (Nick Falcone). The company…
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Groupon Inc Core Competencies
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Insert Groupon Inc. Case study Synopsis Groupon Inc. got its from a combination of “group” and “coupon” and it was launched in October 2008. Forbes Magazine declared it in August 2010. It serves in 150 markets in North America and 100 markets in Europe, Asia and South America (Nick Falcone). The company has close to 35 million registered users. According to the U.S internet company known as since the initiation of Google, the company became the largest in IPO. At the end of 2010, the Google offered the company a takeover worth $6 billion but it rejected the offer. Financial results of the company were conducted through the two economic revisions that took place in the year 2012 April by SEC examinations to all public companies before the November IPO (Nick Falcone). Resources Groupon Inc. is a “local commerce marketplace that connects merchants to consumers by offering goods and services at a discount” (Croupon Inc 1). To achieve its goals, Groupon Inc. pursued specific laid down processes in dealing with its customers. The company to target deals with its customers used the technology put in place. Groupon Inc. mailing list-assisted the company to disseminate deals from customers. Customers interested subscribed to the mailing list and information on deals was sent to them directly by the company. Other resources important at Groupon Inc. is the creation of a mobile application created in 2010 and a website; this were created to disseminate deals between customers and merchant partners. Customers were supposed to buy the coupons online, and the coupon became active only when the required number of purchases were received but expired after given time. Merchants who were interested in a partnership with Groupon Inc. were scrutinized, and only one applicant out of eight was chosen and was to access sites like Yelp, CitySearch, and TripAdvisor. Their deals received considerable discounts (Nick Falcone). Groupon Inc. revenue grew exponentially due to the rapid expansion of the international segment in Europe and Asia, which saw 36% total revenue to the company in 2010 while in 2011 revenue, was 60.6%. Between these years, costs and expenses reached the highest peak and still in 2011 significant losses still reported. In the period, that credit increased processing fees and refunds that were not recoverable from the merchants, Groupon Inc. admitted the increased loss of revenue. The company experienced a fast development increasing the rate of revenue from US$14.5 million in 2009, US$12.9 million in 2010; in 2011 revenue was US$1.6 billion. The growth was achieved after venturing in domestic and international markets (Nick Falcone). Capabilities The company has invested greatly in technology “we employ technology to improve the experience we offer subscribers and merchant partners, (…) a component of our strategy is to continue developing and refining our technology” (Nick Falcone). Communication to company’s customers and merchant partners is electronic due to its efficiency. Information technology was also employed by management and merchant partners to track deal performances and analyze demographic data and ability. Technology systems like business operations tools used in tracking internal workflow were introduced in the company, application tools and communication tools were put in place to serve content at scale (Nick Falcone). Tools to display operating and financial metric like dashboards and reporting tools were put in place. Printing and procurement systems for consumers were established. Plans to merge the company’s information technology system with international information technology platform are underway to enable efficiency and consistency globally. For the protection of the information technology systems, Groupon Inc. The company used antivirus, firewall, and patch management technologies. Security of the website was a major concern and the company invested in pattern and intrusion detection tools and a secure socket layer (SSL) for encryption of data before transfer (Nick Falcone). Groupon Inc. held a market share of 53% in North America in 2012 and owned a great number of market shares approximately 37 out of 48 countries. Most markets were acquired through online marketing program using search engine marketing, referral programs, affiliate marketing and display advertisement. A strong sales force was used by Groupon Inc. to build partners relationship and provide expertise in marketing. Groupon Inc. spending on marketing earned them revenue growth (Nick Falcone). Core competencies A company performs these activities well as compared to its competitors. The company offers customers personalized products and service that is adapted to the customers need. Individualization of customer’s growing need that were focused on the Groupon Inc. Company to mailing services and products matching customer needs and narrowing to individual customers are major competencies. Groupon Inc. The company unveiled daily subscriber’s deals through a personalized contract in the year 2010 that tailored personal preferences and buying history. Buying patterns of customers capture the shared information and forms allowing sales to becoming more useful (Nick Falcone). Information technology system anticipated deals that corresponded to the unique interest on the needs of the customers especially the youth who use the internet to search for products. Availability of products, description and prices online saves the customer time from searching the right services and products for themselves, its distribution via e-mails, websites, and mobile applications encouraged more sales since delivery was perfect for customer’s convenience. Customers demanded the services of the company, which is regarded as the only success for this company (Nick Falcone). In order to Groupon Inc. to meet the needs of the merchandise and customers at a time, long-term success, it relies on flexibility to adjust and adapt its business model and security of the information system. Products offered by Groupon Inc. were unique and included featured daily deals, which were distributed through mass e-mails, national deals from national merchants and Groupon Inc. now that were offered on demand. Groupon Inc. goods, Groupon Inc. gateways, which are travel deals and Groupon Inc., live, were also offered. Groupon Inc. rewards were a free service offered to merchant partners, and customers could earn a reward, which could unlock special deals (Nick Falcone). Findings and recommendations 1. Management Being under the leadership of the co-founder, Andrew D. Mason (Groupon Inc.) who has vast knowledge in information technology he has made sure that technology is perfected in the company leaving out other areas like sales representatives. The management team of Groupon Inc. has tried to exercise the management practices adequately yet they fall short somewhere. It evidently needs to carry proper planning of its activities. In the planning phase, it decided in advance the services and products to offer coupons on and when they are offered. With these strategies in place, it will be able to properly budget for its activities. Proper budgeting of activities in the firm will enable the firm to properly maximize its recourses and minimize expenditure at the same time (Nick Falcone). Recommendation The top management being the key factor in any production industry, the management of Groupon Inc. as well as the shareholders need to ensure that they hire competent managers in the field to carry effectively out their duties and responsibilities. In addition, the management also needs to come up with systematic management styles that will enable the firm to take good care of its employees, as well as the resources of the company. Moreover, the firm should also ensure that it decentralizes its duties and responsibilities as much as possible. With proper decentralization, the management of the company will have enough time to plan and strategies in the next move of the company. Proper management also calls for adequate training and development of the employees in the organization. With skillful employees, Groupon Inc. will be able to carry out effectively its duties and responsibilities without difficulties. However, effective management needs the proper motivation of employees. Therefore, the management of the company needs to ensure that it properly motivates its employees in order to enable them put in more efforts to meet their organizational set goals and objectives. Since Groupon Inc. is large, it needs to ensure that it frequently carries out performance appraisals as well as taking its employees to refresher courses. Moreover, because of decentralization of responsibilities to various branches, the firm will enhance their equipment on the internet with their computerized management system that will be in one central place. Having a computerized system will enable top management of the firm to monitor every activity that various departments will be doing. Therefore, the top management in Groupon Inc. will have better information that will enable them to make informed decision. 2. Finances In 2011, Groupon Inc. operating income was negative. Expenses increased which was attributed to investment in marketing, but this was necessary so that the company may receive more subscribers. Selling expenses were also reported which included commission for sales representatives and cost incurred in traveling, telecommunication and sales technology. Finances in an organization are the most sensitive things that must be handled diligently in order to effectively and efficiently meet its set goals and objectives. Therefore, in my findings finance comes the central point of operation in the company. In this company the individuals responsible for receiving and making payments is not clearly defined. In addition, the company management as well as the shareholders have not opened up for both external and internal auditing of the companies accounts. In order to have transparency in the industry, the Groupon Inc. management need to ensure that there is frequent auditing of company accounts. Employee compensation in the company is also another unclear issue in the company (Nick Falcone). The current operation that the company is using is compensating or paying the employee in relation to the responsibility bestowed on them. Recommendations To ensure operating cost is reduced, more sales and marketing must be done since more buyers and subscribers mean more revenue. In addition, finances are very sensitive issues in an organization, the management should have a clear specification of whom to receive and make payment in the organization in relation to petty cash payments. Moreover, the management should also ensure that it gives each department or branch to remunerate its employees because they are the ones who understand the contribution of an employee in relation to company production or performance. To have a better share and trust in the market, they need to develop their financial reports early and within the given margins. Correct posting of the results will put them on the map and enable positive revenue collection. I, therefore, recommend that, the management of Groupon Inc. should define a mechanism that enables all of its payments and receipts to be at the same point. In addition, it should also ensure that it keeps proper records of its received and payments to avoid confusion and enhance posting of result that depict the real issues on the performance. They should always ensure that the financial records of the organization should be computerized for efficiency and effectiveness. 3. Employee relations in the organization I also find that there is no strong employee-to-employee relation being an online-based firm as well as employer-employee relations. It is because the management of the company is not considering teamwork in its operations. Moreover, I also find that there is no open channel of communication between one department and the other as well as for upwards and downwards communication. They have a good customer care response, which enables them to meet and attract customers (Nick Falcone). The failure to predict the number of people who would return new high priced deals and demand refunds, the company admitted. Rather than the formation of predictive models to take into account the effects of the deals offered on those purchasing hem, the company relied on historical patterns of traditional sales. The company must provide ROI for future continued success. The transformation of the customers into repeat customers and launching Groupon Inc. awards will allow clients to unlock special Groupon Inc. deals with their preferred business (Nick Falcone). Recommendation Groupon Inc. should ensure that it assigns tasks to employees at group levels. Having employees, work together will enable them to share ideas therefore improving the efficiency and effectiveness of the operation of the organization. Moreover, there should be a good platform for the interaction of employees and receiving feedback from all available customers. Open forums that will enable the employees to air out their grievances to the management and as well listen what the management expects from the employees. In order for an organization to be effective in its daily operation, there should be proper employee corporation as well as coordination. Therefore, I recommend that the company should engage its employees at all levels of decision-making. Moreover, the management should ensure that it has adequate notice boards as well as suggestion boxes to enable proper communication between employers and employees in the organization. Most operations in Groupon Inc. should be concerned with delivering quality goods and products for their customers. s Works Cited Nick Falcone, Eric Halbruner and Ellie A Fogarty. "Deals or Lasting Success?" General issues in strategic management 11.1 (2014): 1-20. Read More
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