Now, is this great deal, too good to be true??….. So I decided to do some quick research to see what I could find out. So far, groupons is gaining strength; it is rumored that the company will be acquired by Google, which that in itself has turned out to be a heated debate, whether or not this is a smart move for Google. (Why Google Buying Groupon Is a Bad Idea). Regardless, groupons has expanded, “It is now in 300 cities internationally, 130 of them in the US, and 2,700 employees, just under 1,000 in the US. Its acquisitions have included similar sites in Berlin, Japan, Russia and Latin America.” (Groupon’s runaway success with coupons) and it seems to be getting stronger.
But the question is, is this really profitable for businesses??? I would have to say, it is. But, it has to be treated carefully, all businesses have to make sure they can, first of all, be able to meet the demand in order to keep clients satisfied. Specifically small business, for example, “Charnell Griffin expected “a couple hundred” customers when she offered a discount through Groupon.com for the services of her three-and-half year-old company, Clean Corp. Nearly 3,800 people pounced on the $35 deal for two-hours of house cleaning. Griffin was — and still is — overwhelmed as she tries to honor the vouchers before they expire in a year. In this case, it really was too much of a good thing.”
Therefore if handled correctly, it can be a very powerful tool for businesses, big or small, it helps them get ‘noticed’, specially small businesses. These smaller bisness ventures also have to be careful when they do their math, they have to be sure that the discount they are offering covers their costs and allows them to make profit, because, if this “Groupon” tool is mishandled it can have a negative effect rather than positive, it can create loses for any company. Like with any new thing, it has to be monitored carefully to see what possible problems can arise with it.
I agree that Group-on creates new obstacles that business need to handle. The creation of increase demand from using the promotional services of Group-on can be overwhelming for small businesses. Small companies need to crunch the numbers before committing itself to Group-on promotions.
ReplyDeleteAs you mention, while running a business it's important to consider every possible threat. Not taking proper consideration of the profit margin and of the cost may certainly turn into disaster for any corporation. I do believe that now that the company is growing fast given their international acquisitions and their transformation into a billion dollar valued corporation a cost situation may arise that could lead to the disappearance of Groupon if the corporation is rune carelessly without paying proper attention to the cost structure. Now the question remains what will the future bring?
ReplyDeleteIn my personal opinion, Groupon does bring new challenges to companies that utilize their services. Many of these obstacles I belief have to do with brand recognition and brand recalling, because customers that use Groupon to find these deals usually on average tend to remember the Groupon brand but not the specific brand of the product or service that they purchased through a service like Groupon. This are some of the disadvantages that each business that decides to use Groupon's services in order to increase sales and grow their business must take into consideration, however, it has been proven many times that the use of Groupon or other group discounting service companies can help a company tremendously if utilized properly.
ReplyDeleteIt is certainly true. Groupon is a great marketing tool if it is used appropriately. Its power depends of the ability of the businesses to use it. It has to be a smart decision, and companies most evaluate whether Groupon fits or not their businesses. The problem comes usually for small businesses that don't realize they can't afford the discount cuts that joining Groupon implies.
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