Andrew Mason, the chief executive officer of Groupon Inc. was fired on Feb 28, 2013 because of the company’s poor operational and financial performance. And this leads us to consider why has Groupon started off from fastest-growing startup in history into the continuous downfall situation.
One reason I think why Groupon is at a downfall position is that Groupon is growing too fast and it does not properly consider the costly international expansion, especially when the economy in Europe is in recession. Besides, the poor relationships with other businesses especially the small startups also lead to the company’s downfall. From my research, Groupon takes almost 50% money from every successful deals that customers purchase. This causes those small businesses who are offering discounts to end up losing money because they not only have to offer ‘huge’ and exclusive discounts but also have to pay high commission cost to Groupon, just for listing the deal. As more businesses are loosing money, they will have no incentive to post deals on Groupon. On the other hand, from a customers’ perspective, if a great deal temporarily swamp a small business with too many customers, the quality of the service may go down so that some quality sensitive customers may not purchase the deals in the future although they are cheap.
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