Groupon provides a local e-commerce marketplace that connects merchants with consumers by offering goods and services at a discount. Each day, the company emails its subscribers discounted offers for goods and services that are targeted by location and personal preferences. The “deal” goes into effect when a requisite number of subscribers purchase the coupon, since the company has negotiated a “group discount” with the merchant. Each interested subscriber purchases this “group coupon,” or Groupon, and individually obtains the goods/services from the merchant. Customers also access deals directly through Groupon's websites and mobile applications. In sum, Groupon acts essentially as an agent for its merchant partners in facilitating sales.
Groupon's opportunities for growth stem from the scale to which it has expanded this business model. The size of its customer base allows it to attract new merchants seeking to attract new customers for their products and services. As the number and...
