Class Principles Of Management
ASSIGNMENT# 2 GROUPON General rules:
1. Assignment due by beginning of class on October 10, 2014. Email with attached Word or PDF best though instructor will accept hard copies as well.
2. Responses must be typed on 2 to 3 pages. Please use reasonable font, line spacing and margins! 3. Use your learning from all Chapters covered so for from the textbook (MGMT7, Chuck Williams) 4. This assignment will count for 12 points. 5. Please address the following 3 questions. You are welcome to touch on additional issues if you wish.
A. [2 points] What are the main issues described in the case? B. [5 points] List and describe the main Principles of Management involved in the case. C. [5 points] If you were in charge at Groupon, what would you do?
From 400 subscribers and 30 daily deals in 30 cities in December 2008 to 35 million subscribers and 900 daily deals in 550 markets today, Groupon got to $1 billion in sales faster than any other company. Starbucks CEO Howard Schultz, who was an eBay board member and is now a Groupon investor and board member, said, Starbucks and eBay were standing still compared to what is happening with Groupon. I candidly havent witnessed anything quite like this. They have cracked the code on a very significant opportunity. Eric Lefkofsky, who chairs Groupons board said, The numbers got crazy a long time ago, and they keep getting crazier. So, what is propelling Groupons astronomical growth? How does it work? Groupon sends a daily email to its 35 million subscribers offering a discount to a restaurant, museum, store, or service provider in their city. This coupon becomes a groupon because the company offering the discount specifies how many people (i.e., a group) must buy before the deal tips. For example, a local restaurant may require 100 people to buy. If only 90 do, then no one gets the discount. Daily deals go viral as those who buy send the discount to others who might be interested. When the deal tips (and 95% do), the company and Groupon split the revenue. Why would companies sign up, especially since half of the money goes to Groupon? Nearly all of Groupons clients are local companies, which have few cost effective ways of advertising. Radio, newspapers, and online advertising all require upfront payment (whether they work or not). By contrast, local companies pay Groupon only after the daily deal attracts enough customers to be successful. Another problem with traditional ads is that they are broadcast to a wide group of people, many of whom have little interest in whats being advertised. The viral nature of Groupons
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Published June 18, 2021By Categorized as Assignment Questions
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