The underlying fact is that firms operate in environments encompassed by high risks and uncertainties and as such need platforms to provide principal rationale for the application of strategic planning and forecasting. Launched in June 1998, Groupon’s capacity penetrate a market characterized by cut-throat competition is demonstrated by its capacity to serve more than 150 and 100 markets in North America and Europe respectively within a very short span of time. Furthermore, amassing 35 million registered users in Europe, North America, Asia, and South Africa is a demonstration of the capacity to anticipate and adapt appropriately to environmental changes and hold sustainable advantage over competitors.
The levels of profitability a firm in any industry is largely determined by the intensity of competition (Zeithaml, 2002). Despite operating in industry of more than 500 players worldwide and 100 in the United States such as LivingSocial, Deals365.com, Gilt Groupe, BranchBark, Plum District and Jasmere.com just to name a few top players, Groupon emerges at the top of the list with good chance of succeeding. This is because of effective business model, strategic adaptation, and brand management.
Groupon’s business model focuses of on an assurance contract using The Point’s platform. The competitive advantage this model has on other competitors is that it reduces risk for retailers. This underlines the main reason behind continued success of Groupon and its ability to smoke away competition from its rivals. The second competitive strategy for Groupon is its focus on brand management in a manner that competitors find hard to imitate. These customer relations approaches in brand management revolve around unique characteristics of customer service that for the basis for outperforming competitors because of the value the firm is able to present to the customers (Chermatony & McDonald, 2002).
Groupon also employs strategic adaptation to achieve organizational efficiency and maintain a sustainable competitive advantage over competitors. This is because strategic adaptation encompasses formal planning that provides benefits that produce economic value, ensures the capability for business planning and management and enhances strategic focus and risk management. It forms the driving force behind the strategic plan of Groupon. The purpose of strategic adaptation encompasses all factors that congregate to making forecasts, estimating uncertainty, and gaining acceptance (Yusof & Aziz, 2008).
In conclusion, the case of Groupon presents a real-life application of competitive market intelligence to smoke the competition and achieve a competitive edge. Groupon has strong market competitiveness due to the establishment of brand operations that are popular with its target group, strategic planning, and effective business model. Based on the assessment and market intelligence, it is highly recommended that VC injects its resources into Groupon because it has a slightly higher chance of succeeding than its competitors.
Bullet Point Presentation. Competitive advantage Groupon is demonstrated by:
- The business model that focuses on an assurance contract using The Point’s platform
- The competitive advantage this model has on other competitors is that it reduces the risk for retailers
- Brand management in a manner that competitors find hard to imitate
- Provision of unique characteristics of customer service that for the basis for outperforming competitors because of the value the firm is able to present to the customers
- Strategic adaptation to achieve organizational efficiency
- Encompasses formal planning that provides benefits that ultimately produce economic value
- It ensures the capability for business planning and management
- Enhances strategic focus and risk management.
References
Chermatony, L. & McDonald, M., 2002. Creating powerful brands: in consumer, service and industrial markets, 2nd ed. Oxford: Butterworth- Heinemann.
Yusof, F.M. and Aziz, R.A. (2008). Strategic adaptation and the value of forecasts: The development of a conceptual framework. Journal of Business Economics and Management. 9(2): 107–114.
Zeithaml, K., 2002. Brand loyalty programs: Are they shams? Marketing Science, 24(2), pp. 185-193.