Business Development Case Study: Strategic Audit of Groupon Inc.

This case study provides a comprehensive analysis of Groupon Inc., an online marketplace operating in multiple countries. It examines Groupon's current situation, strategic managers, internal and external environments, and key strategic factors such as globalization, innovation, and sustainable business practices. The analysis includes a SWOT analysis, a review of Groupon's mission and objectives, and recommendations for improvement, focusing on relationship marketing to enhance customer retention. The study highlights Groupon's strengths, weaknesses, opportunities, and threats, offering insights into its marketing strategies, organizational culture, and competitive landscape. The case study concludes with a call for Groupon to focus on building customer relationships through social media marketing and customer participation to foster loyalty. References from various business and management publications support the analysis.

Running head: CASE STUDY ANALYSIS 1
Case Study Analysis
Student Name
Institution

CASE STUDY ANALYSIS 2
Introduction
Groupon Inc is American online marketplace that offers business activities such as goods
or services and travel in over 28 countries. Groupon Inc was started in 2008 and is based in
Chicago United States of America. It started in Chicago spread Boston, New York and Toronto,
reaching more than 150 cities in North America. The Internet has become the market place with
several businesses shifting their operation from in-house base to online business base. Groupon
Inc is a typical business that has highly invested in online marketplace owing to its good e-
commerce software. There are some key factors that play role in strategic management of
Groupon Inc and these are globalization, innovation and sustainable business practices.
Globalization is a business policy that focuses on the international business operation a common
phenomenon facilitated with the current advance technology. Innovation also refers to the
process of developing new business ideas. Sustainable business practices are the business
practice that minimizes the business negative impact on environment, society, community, and
economy (Steiner, 2010). The following paper provides strategic audit and suggestion based on a
typical organization the Groupon Inc.
Appendix 12.B and 12.C: Suggested Case Analysis Methodology Using the Strategic
Audit and Example of Student-Written Strategic Audit
Strategic analysis involves analyzing various aspects of the business that include current
situation, strategic managers, internal, external environment and analysis of strategic factors.
I. Current situation

CASE STUDY ANALYSIS 3
The current situation within Groupon Inc can be described as the market place with the
role of connecting merchant and other local businesses. The Groupon Inc uses advance
technology and to target the relevant deals based on individual customer needs. Groupon Inc is
currently working on a sustainable business policy that requires environmental, social and ethical
responsibility (Hill & Gareth, 2012). Sustainable business policy and management strategy as per
the Groupon Inc involve offering healthy business operation that plays role ecosystem as an
important local economic development aspect. As part of a sustainable business policy, Groupon
Inc has play role in awareness and visiting the local independently owned business to support
and offer services to those businesses. Another role that Groupon Inc plays in the community is
offering or funding local projects that include a donation to the policy and security officer such
as stab-proof vest for police dogs. In addition, Groupon Inc connects many people with local
business pointing to the social responsibility of the business. This is particularly due to the vast
local wealth and job creation that the Groupon Inc has done since inception back in 2008
(Alistair & Baldwin, 2011).
II. Strategic Managers
Board of directors
Groupon Inc composes of eight directors that form the board of directors led by Eric
Lefkofsky the co-founder and the Executive Chairman of Groupon. Peter Barris joined New
Enterprise Associates (NEA) and is the Managing General Partner. Mellody Hobson is serving as
institutional clients and individual investors. Brad Keywell is a founder of MediaBank LLC,
Echo Global Logistics, Inc., Groupon Inc., Starbelly. He has served on the Board since
Groupon’s inception. Ted Leonsis is Vice Chairman Emeritus of AOL LLC also is the Vice
Chairman and President of several business units. Andrew Mason is a founder of Groupon and is

CASE STUDY ANALYSIS 4
the Chief Executive Officer since its inception. Robert Bass is the Vice Chairman of Deloitte
LLP from 2006 through June 2012. Mr. Bass specializes in e-commerce, mergers and
acquisitions, and SEC filings. At Deloitte, Mr. Bass was responsible for all services provided to
Forstmann Little and its portfolio companies and is the advisory partner for Blackstone,
DIRECTV, McKesson, IMG, and CSC (Parekh, 2011).
Top Management
Top management also include Andrew Mason a co-founder of Groupon Inc, Jason Child
who is the Chief Financial Officer, Joseph Del Preto II who is the Chief Accounting Officer,
Jason Harinstein who is the Senior Vice President-Corporate Development, Jeffrey Holden, who
is the Senior Vice President-Product Management, David Schellhasen who is the General
Counsel, Brian Schipper who is the Senior Vice President–Human Resources and Brian K. Totty
who is the Senior Vice President—Engineering and Operations (Sarah & Shayndi, 2011).
III. Internal environment
As an internal environment, Groupon Inc has aspects such as an organizational culture
that is characterized by good communication strategy. The internet has enabled consumer
selection and appointments within the Groupon Inc marketplace. The Groupon Inc sales are also
promoted by the Groupon Promise that encourages customers towards satisfaction. The
marketing strategy of Groupon Inc in cooperates marketing mix such as product promotion,
product, price, and place. As part of products promotion the Groupon Inc invest in online
campaigns based on television and social media. Products and services are so much diversified
that allow the purchase of products throughout the world. With the use of local business in
offering services to end consumers Groupon Inc has been able to reach more consumers in many

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regions especially northern, central and South America. Place marketing strategy is basically
based on its readily available services that are coupled with purchase timing. Purchase timing
focus on the mode of purchase either internet or mobile platform hence determining the home
delivery of these services (Buchanan & Gibb, 2007).
IV. External environment
Globalization is a business policy that concentrates on an international business scale.
Groupon Inc is an organization that has strategic management and business policy that is mainly
based on global growth and internet connectivity throughout the world. With the technology
revolution and use of social media has been the point in the global growth of Groupon Inc.
despite the investment in the online market place, Groupon Inc has local merchants that operate
an independently-owned small business that has a vast impact on local economies. As exhibited
with Groupon Inc globalization is seen in much strategic management and business policies such
as marketing strategy (Burnett, et al., 2004). Another external environment is the strong pool of
competitors that gives the Groupon competition.
Analysis of Strategic Factors
SWOT Analysis
SWOT Analysis take into consideration various factors affecting business such as
strength, weaknesses, opportunities, and threats. Strengths include brands are internationally
recognized, a large number of active customers with large revenue, focuses on local and small
scale business and a large number of employees. Weaknesses are high competition lessening
margin and one time customers causing lack of customer loyalty. Opportunities include a high
use of mobile application leading to market penetration, Better targeting of deals and relationship

CASE STUDY ANALYSIS 6
building for better long term customer partnership. Threats, on the other hand, are copycats have
emerged threatening market, non-personalization of deals threatens the ecosystem (Evelyn &
Wortham, 2010).
Review of the current mission and objectives
Groupon Inc has a mission statement that indicates “Groupon is a marketing tool that
connects consumers and merchants”. The main objective of the company is to be a critical part of
a daily local marketplace for consumers and merchants Groupon Inc is an organization that
heavily invests in the innovation especially in technology. The strategies that guide the Groupon
include growing users and consumer base, increasing number of merchant stakeholders, position
Groupon to reap benefit from technological advancement that may influence consumer behavior,
multiplying the number and variety of services through innovation and expansion with
acquisitions and development based on partnerships (Goldman & Shontell, 2011).
The Groupon Inc uses e-commerce that is attached to social innovation as the company
terms it. The business policy especially social innovation focuses or invests to a community that
entails measurable impact of local economies on Groupon Inc business. The most important
innovative aspect of Groupon Inc has been discovering the unique aspect of the local community
as the recipe for offering services to the society across areas that Groupon Inc has a business.
Social innovation is also used by Groupon Inc to market its products and services in social media
within Facebook and Twitter in the strategy called reference groups. Reference group social
media serves three main purposes and these are information, need recognition and alternatives
evaluation. Firstly, social innovation facilitates information search when one wants to get
information mostly from social media friends about a product sold at Groupon Inc. this

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information is available in social media platform through comments made by friends in the social
media. Secondly, as management strategy, social innovation offers Groupon Inc avenue where
customers evaluate different products and services available from Groupon Inc through their
friends within the social media platforms. Thirdly, Groupon Inc choice of social innovation is
critical especially need recognition that facilitates the finding of needs of customers and the
ability of customers to get where their need can be satisfied (Bryson, 2006).
Recommendation
Groupon needs to concentrate on relationship marketing that will encourage customers to
come back to the company. Relationship marketing or social marketing is currently one of the
best service or product marketing. Analysis indicates that Groupon Inc has mostly one time
customers that buy products and services once and there is low customer retain (IBM, 2010).
On the implementation of the above strategy, Groupon needs to establish and make good
use of its social media marketing. Social media provide a good avenue to get, establish the
relationship and retain clients. In addition, Groupon needs to develop a strategy that allows
customers to participate in the marketing such as customers giving their own suggestion so as to
make them feel part of the system and this will enable them to be retained by the company.
Conclusion
In conclusion, Groupon has proved to grow thus has attracted the attention of many
different customers within northern, central and south America. This has been coupled with its
strategic management and business policy. Groupon is presented as one technological
organization that has a huge command of employee and relationship with local small business
organizations. In partnership with local business, Groupon is sponsoring different business

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projects as part of a strategy to involve customers in its business. The only part that is
recommended for improvement is relationship marketing that will enable obtaining, engaging
and retaining customers.

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Reference
Alistair, B. & Baldwin, C. (2011), Groupon’s IPO Biggest by U.S. Web Company since Google.
Reuters. Groupon, Inc. 10-K (March 30, 2012), p. 3.
Buchanan, S. & Gibb, F., (2007), The information audit: role and scope. International Journal of
Information Management, 27(3), pp. 159–172.
Burnett, S. et al., (2004), Knowledge Auditing and Mapping: a Pragmatic Approach. Knowledge
and Process Management, 11(0), pp. 1–13.
Bryson, J., (2006), Managing Information Services : A Transformational Approach. Hampshire:
Ashgate Publishing Ltd.
Evelyn, M. R. & Wortham, J. (2010), Groupon Said to Reject Google’s Offer. The New York
Times, DealBook. December 3, 2010.
Goldman, L. & Shontell, A. (2011), Groupon: From the Ashes of a Dead Startup to a Billion-
Dollar Company In 2 Years. Business Insider. June 4, 2011.
Hill, W.L., & Gareth, R. J. (2012), Strategic Management Theory: An Integrated Approach,
Cengage Learning, 10th edition 2012
IBM, (2010), Capitalizing on Complexity: Insights from the Global Chief Executive Office Study,
July 2010 Mckeown, Max. The Strategy Book, FT Prentice Hall, 2012
Mulcaster, W.R. (2009), Three Strategic Frameworks, Business Strategy Series, Vol 10, No 1, pp
68–75, 2009.

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Nag, R.; Hambrick, D. C.; & Chen, M.-J (2007), What is strategic management, really?
Inductive derivation of a consensus definition of the field (PDF). Strategic Management
Journal. 28 (9): 935–955
Parekh, R. (2011), Groupon CEO: We Placed Too Much Trust in Agency for Super Bowl Ads.
Advertising Age. March 21, 2011. http://adage.com/article/news/groupon-ceo-relied-
agencybowl-ads/149498/. Groupon, Inc. 10-K (March 30, 2012), p. 8.
Sarah, E. N. & Shayndi, R. (2011), Groupon Holds Cash Tight. The Wall Street Journal.
November 10, 2011.
Steiner, C. (2010), Meet the Fastest Growing Company Ever. Forbes. August 30, 2010.