We identified the core elements describing a business model in this post: we now apply the methodology to Groupon, so far analyzed only from the merchants’ point of view. Groupon business model is not “pure” anymore: Groupon has begun to diversify its fundamental business logic, extending the original model and offering new propositions. For the sake of simplicity, here we consider mainly the original ”daily deals“: coupons sent by mail to all Groupon database contacts,offering hyper discounted products and services delivered by merchants of a specific city.
According to the Business Model Canvas methodolody, Groupon core elements are:
01 Customer Segments. Groupon is a two-sided-market, i.e an aggregator (or economic platform) that allowstransactions between two user groups, who benefit by the platform network effects. On one side we find the localconsumers purchasing coupons /gray box): these are mostly women, students, singles and “professionals” withhigh income (incl. high literacy and internet usage). On the other side, we have local merchants such as restaurants, spas, or small enterpreneurs offering services (blue box). Merchants are real customer segments for Groupon and not just partners: they don’t offer complementary products to build Groupon offer, but they are key players without which the whole exchange would not exist at all. Hence, Groupon needs to target them, offer them a specific value prop and develop a direct relationship. Groupon has now started to extend the targeted B2B: it widened the scope from local shops to bigbrands (e.g. fashion, travel,etc.) supporting nation wide promotion sales leveraging the list built by joining the local city databases. Groupon has also started to target big event organizers delivering larg online ticket sales (GrouponLive!) .
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