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e-Business Model and Strategy Business
Group 11 BEN MOHAMED Salim HUMBLET Michael OLIVEIRA Pedro OTERO TORRES Pablo PEREZ CARPIO Borja RADZKI Przemyslaw Pavel RIFAYI Melaz VERSTRAETEN Eloy VULFS Raphael
Academic year 2010/2011
concerning its communication. Inc. c) Cultural functionalities On the website of Groupon. all buyers who have emerged get the product. no one gets the product. the costumers can find and buy all kind of tickets which give them access to different cinemas. the buyers also can get acquainted with the method of payment. or used with express permission of the copyright and/or trademark owner. the price after the discount. To buy something on the website a certain number of people has to sign up for the offer which is presented on the website. Personally Identifiable Information on the customers resides on a secure server that only selected 2 . The offer states: a detailed description of the product which is offered. its regular price. The costumers can also follow the group on the various websites of social networks such as Twitter and Facebook. operas. In North America. the discount offered by the supplier. deep linking. font and logo. The offer shows a product with a discount from 50 to 90%. linking.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 1. Consequently. Any violation of this policy may lead to a copyright. if the minimum is not reached. b) Commercial functionalities Groupon displays an offer of products a day in each market it serves. In order to get the product they want to purchase. d) Copyright functionalities Everything located on the website is the exclusive property of Groupon. there are 200 sites similar to Groupon some copying the look of its site. festivals and music concerts. That’s why the company doesn’t want to promote others websites. theatres. any coping. trademark or other intellectual property right infringement that would expose the User to civil and/or criminal penalties. we will not find any links to other similar companies. is directly associated with its business. saving realised on the product and the minimum number of products which has to be purchased so that that deal could be concluded. The offer is posted on the website of Groupon and is send by e-mail to all the members who have registered on this site. If the minimum number of purchases is reached. They can pay with their credit cards and security is guaranteed. Key Functionalities a) Communication functionalities On the website of Groupon. The customers can access their Personally Identifiable Information on the Website through a password and their email address. The information about theses events are naturally available on the website. transmitting. the costumers send the offer to their friends. Inc. is strictly prohibited. distributing. e) Security functionalities Groupon takes security seriously and take numerous precautions to protect the security of Personally Identifiable Information. or otherwise modifying of the site without the express written permission of Groupon. On the website. This password is encrypted. That way the costumers promote indirectly the website of Groupon. posting. The success of Groupon. A major drawback of the website is the fact that it is easy to imitate. In addition.
Facebook Deals. 2. consequently. adresse URL: http://www. Cheaptoday. Number of subscribers Number of active users Competitors LivingSocial. Woot!.com. GiltCity. Estimated 60% of Local Deals Market. Yelp. Groupon offers considerable savings to consumers (up to 70%) who can then discover services/product they didn’t know. Number of unique visitors per month Nearly 11. it guarantees revenue and large number of new customers for local businesses. They encrypt certain sensitive information (such as credit card information) using Secure Socket Layer (SSL) technology to ensure that Personally Identifiable Information is safe. Groupon enters new markets by looking for the local market and identifying successful local businesses. Market shares Support team More than 3100 employees. estimated $920M in revenue in 2011. NEXTUP. Estimated 11.2M in 2010. Groupon’s business key success has been its strong partnership that it creates with local businesses. ideeli. Coupons. The key business characteristics Revenue Over $ 600M in 2010. Nextup Research Report. Over 50M total subscribers across over 300 cities in more than 40 countries. Kupikupon.2M unique visitors a month in the US in 2010.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 personnel and contractors have access to. Groupon sales personnel then approach local businesses and try to establish partnership with the local business. in Sharepost. 3.com/doc/48117058/Sharespost-Groupon-Research-Report (page viewed the 20th of March 2011) 1 3 .scribd. The target group1 Groupon offers a « Deal of the Day » in each of the 300 local markets. Google offers.
barriers to entry for the local deal market and switching costs for consumers and local businesses are low. Consumers then redeem coupons with local businesses and receive discounts. The deal is generally available for a few days and the deal becomes inactive if the critical subscription is not reached. When a minimum number of users subscribe to the deal. Groupon is also best suited for businesses thriving on repeat customers such as spas and restaurants. Consumers pay Groupon by purchasing the deal. Groupon performs research of the local market and identifies the successful local businesses. the deal becomes active. Source: Company Reports & Primitus 4 . Groupon sales personnel approach local businesses with outstanding reviews. There are about 500 firms worldwide (200 firms in US alone) which have started to emulate Groupon’s success. Consumers subscribe with Groupon and receive deals through emails.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 Groupon is best suited for high fixed cost businesses and business where the customer acquisition cost is very high. Groupon features deals involving products/services offered by local businesses in some selected locales based on the target consumer base. 4. Consumers can also see deals in the Groupon website. Groupon pays the local businesses after taking a 40%-50% share of the revenue generated by the deal. and establish partnership with the local business. Business model Groupon’s business model is easy to copy.
Key Partners: The Point platform (even though now Groupon acts independently) Key Activities: Offers discounts on various products and services from other companies Key Resources: Physical: Internet. 5 . In addition. Feel & Serve: Groupon run its activities and offers its services only through its website. The word Groupon is now a familiar name associated to “cuts” or “good deals”. Groupon is a platform offering promotional geo located products and services. All types of products and services are thus sold by Groupon. Here. advertising outside of the site is also aggressive. we just offer some key information. Business model canvas The features of Groupon’s ebusiness canvas will be dealt with extensively in the following sections. hence the offer more focused on health and beauty. Indeed. Groupon committed to providing a "good deal" by city and by day. servers . Target customer: Originally Groupon had young women as main target. Trust & Loyalty: Given the deals offered by the site. and the economic concept surrounding its creation. Intellectual: brand name Value Propositions (Offer): Promotes products or services with significantly discounted prices Customer Relationships: Self-Service : customers has the liberty to choose the product or service that suits his needs Channels: Website. ordinary people but also companies for example. Thus its business model intends to reach as much people as possible. b) Customer relationship Information strategy: The platform provides no information unless you gave your e-mail address: it's an aggressive recruiting strategy. the frequency of of the offers makes the site very attractive.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 5. Indeed. However. Value proposition: The big advantage is that Groupon only makes promotional offers for which the price decreases from 50 to 90% overall. mails to customers Customer Segments: Mass Market Cost Structure: Point-of-sale structure through the internet Revenues Streams: If enough customers enter into a deal 6. The four pillars of the business model a) Product innovation Groupon doesn’t distinguish itself from competitors by its products but rather by the manner with which it sells its products and services. In addition to that. Capabilities: The Groupon system has no limits: it does not need space to store goods and deals may be concluded with suppliers of all types of products and services. making unrealistic promises (false advertising). Groupon has expanded its offer. Groupon’s reputation has grown rapidly.
ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 c) Infrastructure Management Activity configuration: Groupon firstly sends employees to research the local market and find a business with outstanding reviews. In 2009. Besides. but also promotes through applications on iPhone and Android-based mobiles to promote the idea. a commission of 30% (on deals promoted by Groupon) or 10% (on deals promoted by the merchants themselves) is charged by Groupon. Cost structure: The costs consist mainly in the exploration of business with outstanding reviews and the promotional costs. Partner network: The number of subscribers has continuously increased since the creation of the website. The commissions depend on the discounted deal prices and the deal categories of the offers. Ownership of the resources Relationship Data Transaction • • • • • Groupon The businesses Groupon The businesses Groupon 6 . when a deal is reached. the company has developed partnerships with several companies in order to provide a range of services to the merchants who choose to advertise Groupon Deals such as “TransNational” (payment processing) and “Speakeasy” (voice and data communications). the site has more than 50M total subscribers in more the 40 countries worldwide. Their promotional texts contribute to the popularity of the site. Financials Revenue Model: Groupon earnings come by keeping approximately half the money the person pays for the coupon. Groupon can reach this objective by increasing the number of subscribers and the numbers of partnerships with small businesses by exploring new markets such as China. Nevertheless. Nowadays. Then. A new offer can be started for free. The revenues in 2010 were $600M and the estimated revenue in 2010 will achieve $920M. the company uses social marketing sites such as Facebook and Twitter. Groupon has developed an e-commerce platform: Groupon Store. the company’s growth depends essentially on the number of deals. Profit Model: Since the system of commission represents the major part of the incomes of Groupon. Resources: The main resources of Groupon are its 3100 employees and the computers and the locals and its reputation. 7.
services and prices Customers Businesses products and services Customers vouchers’ Businesses 9. Together. the supplier and Groupon agree on a win-win deal where the price will be lowered according to a minimum quantity sold. special discounts Customers money.”2 Secondly. The company Groupon takes 50% of the final price and the customer is delivered through the supplier if necessary.com 7 . money The businesses data about products.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 8. the companies contracting with Groupon are the first complementors and the ones being in contact with the clients. Diagram of the information. products and value streams Goupon Groupon vouchers. Groupon couldn’t live without other partners and allies that are the merchants contracting with them and the subscribers being the customers. the groupon and the deal goes through if the minimum has been sold at the end time. 2 Website: www. but only once a "tipping point" of people agree to participate. In this way. The partners and the allies The first Partner Groupon needed was the platform The Point from where it expanded. Daily subscribers will buy. “It’s a website that lets you start a campaign asking people to do something as a group. or not.groupon. personal data’s Groupon data about the customers. The supplementors are the competitors that are copying on Groupon’s business model and developing the same business.
8 . Therefore.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 10. new businesses products that need to be known. the supplier is able to calculate a potential benefit out of the deal. discounts and packages. That way. b) The added value of the online business The added value that is brought by the company is mostly the security. c) Market segments The following graphs offer statistics regarding the subscribers: they are mostly young single women that are educated and work for good revenues. Overview of Groupon’s e-Business strategy a) Value proposition Groupon promises to lower market product prices from 50 to 90%. the products sold are not basis products where the margin is low. distributing the final price equally between the company Groupon and the product supplier. Indeed. but rather luxury products. the contracted deal is only executed if the minimum quantity is met.
f) Resources.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 On the other side. Groupon is looking for companies that are willing to be known and to expand or the ones willing to develop internationally. Indeed. technology. etc. but moreover. Simultaneously. Groupon started its business thanks to the platform The Point as launcher of websites that allow 9 . e) Activities to perform Groupon needs to reach its subscribers and attract new ones in order to raise a minimum amount of customers interested in the same product. the Groupon offers allow discounts and less travelling.. On the other hand. d) Channels On the first hand. it needs to perform well in order to have recognition and respect from contracting companies and attract new ones. buying through Internet is a new way to make his shopping. The delivery is executed by and in charge of the supplier. the businesses are contacting Groupon to work with the company and are helped to clinch a deal. the channels used to reach the clients are characterized by both a substitution effect and an extension effect.
3 10 .. S. h) Competitor The business model of the company Groupon is a weak point for the company since it can be easily copied. in Harvard Business School. Lots of other companies have also worked with Groupon and most of them are quite satisfied with the services of Groupon even though there are more and more studies that nuance this affirmation3. Interenter Retailer.edu/research/pdf/11-063.pdf (viewed the 3rd of April 2011) 4 Deatsch.com. Cost structure EDELMAN. However Groupon was a side project of The Point at the beginning.hbs. TownHog. K. Yelp. Coupons. Groop Swoop. Therefore. g) Partners The partners. many companies are using the Groupon model to launch a business. We note that there is a significant competition from LivingSocial that has raised funds and is likely to expand. j) Pricing strategy Groupon has as strategy. Ideeli. The company has more than 50 million subscribers spread in 300 cities worldwide. Moreover. to reduce the market price at least by half in order to attract the customers on the different groupons. Groupon has created the “Groupon Merchant Partner program that guarantees businesses a certain number of voucher slots per year if they agree not to work with Groupon competitors. in order to dismiss the rivals. 11. the heaviest competitor is LivingSocial followed by Coupons. S. Groupon is the largest player in the emerging local deals market with more than 60% of the shares. 2010. B. & JAFFE. Ideeli. it is now independent. Jasmere.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 gathering people searching for the same project or product. and eWinWin. To Groupon or Not to Groupon: The Profitability of Deep Discounts. Among them. The other players are LivingSocial. are very diversified going from the cloths brand GAP to the events NHL and NBA and the digital payment platform MASTERCARD. BuyWithMe. adresse URL: http://www.”4 k) Conclusion In order to conclude. being essentially the companies co-contracting. BuyWithMe and Yelp. half of it is returned to the company Groupon. & DUKE KOMINERS.. i) Revenue sources From the price charged to the subscribers for the voucher. February 2011. Groupon launches features to keep merchants happy and away from rivals.
$200M in SGA and perhaps another $50M in miscellaneous costs (real estate – exec salaries. The question is. The overhead is completely fixed and you are paying the workers to be there – so incremental margins are high. supermarkets. you also have to believe that Groupon will continue to take an increasing share of the local advertising market – particularly the promotional budgets and marketing budgets of the local advertisers. I am offering a 50% discount generally – and Groupon is taking 50% of the offer price – so in essence.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 Groupon has about $1B in revenue. Perhaps. As a store owner – if I choose to use Groupon. bars and grills. my net is 25% of the retail price. electronics chains. Companies looking to lose money in order to convert customers into regular paying customers. supermarkets etc… The margins for these businesses are too low – and they already spend a lot of marketing dollars branding themselves. who can afford to offer 75% off on a regular basis? The answer falls into two buckets: 1. Say you own a spa. chain restaurants. perishable inventory and incremental capacity. there is thus not a mass of cutting-edge technology required nor tremendous database necessities or server needs – one can assume that the cost structure is not going to get too far beyond the SGA line. etc… What you realize looking at the list is that most of these businesses operate in extremely competitive environments with margins that are razor thin at best. high marginal profit levels. Since most of the Groupon employees are either sellers or administrative people doing the “paper work” for the deals. The issue with these costs are that you have to know very well what the lifetime value of the customer is in order to price these properly. It has been written that Groupon has cracked the local problem – and that all of the $100B per year or more that is spent locally is open to them. electronics chains. 11 . Businesses willing to spend money to acquire users. the cost of ramping up ahead of revenue etc…) – for a total of $250M in EBITDA. Now in order to reach that conclusion. If you look at a typical media company at scale – they tend to run about 20% of sales as costs (incremental margins on the extra $ of revenue is over 80% often) – so on $1B of revenue you have $200M of costs. Now their business model is based on simplicity. Companies with extremely fixed costs. So Google offers $6B for $250M in EBITDA – 24X which seems like a large number – but if EBITDA is scalable and growing extremely fast (over 100% per year right now) – then the 24X becomes 12X in a year and 6X in 2 years – which seems like a pretty good deal for Google – and is probably one of the reasons why Groupon decided to remain private. If you take a look at the revenues of typical local advertisers it consists of car dealers. Car dealers are in no position to use Groupon – nor are clothing stores. My guess is that Groupon is doing $1B in revenue – $500M in Cost of Good Sold. You can imagine that the margins on cupcakes are very high. but I think it is instructive to disaggregate that market a little bit and see just who is using Groupon. 2. Now let’s look at the local advertising market. In most media businesses this is called SAC (subscriber acquisition costs) or CPGA (cost per gross add). retail stores. They pay out 50% of that to their partners who offer the discounts – and the remainder of the company cost is in sales.
if the product is a buffet lunch. sending a daily email". Google Offers follows the same mechanics that the two main representatives of the segment. The competitive strategy should be based on a strong understanding of the industry structure and how it may possibly change. Michael Porter’s five forces model Michael Porter’s 5 competitive forces model is the basis of modern business strategy. Here’s what a business should consider before going with Groupon: Let’s assume that the business in question – a restaurant – offers a Sunday brunch for $16. But. Sale price of Promoted Product: $8 ($16 Sunday brunch on sale for $8 through Groupon) Product costs: • • • • • • • • Raw Materials Labor Packaging Promotional expenses Insurance Rent Utilities Delivery One way of pricing this is to take all the costs into consideration and apportion them to the overall sales of the promoted product within the portfolio. you have to allocate the costs of all the above to determine profitability. which eventually will decrease profitability for all firms in the industry. 12. Groupon and LivingSocial. If they partner with Groupon. Entry of larger players such as Facebook (Facebook Deals) and Google (Google Offers) could also pose significant competition to Groupon in the future. this principle does apply even though in a slightly different way. the deal would have to be priced at $8. what if a promotion does not provide any significant benefit? A good example is businesses teaming up with popular coupon sites like Groupon or Living Social to drive store traffic via discount coupons. The threat of the entry of new competitors Profitable markets that yield high returns will attract new firms. the abnormal profit rate will fall towards zero. This model is based on the principle that a corporate strategy should take into account the opportunities and threats in the external environment that the organization operates in.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 The Cost (Loss-making) Mechanics of Groupon Promotions cost money. So. This results in many new entrants. It goes without saying that a business engages in promotions if it provides some significant long-term benefit. In the online world. Google prepares a new product to help potential customers find big deals in the area where they live. It offers the deal of the day. and if it meets the number of 12 . Unless the entry of new firms can be blocked by incumbents.
and in some regional markets. The Company's marketing technology solutions have helped top brands and retailers reach consumers on thousands of Web sites with alternatives to offline-delivered coupons. Groupon faces competition from LivingSocial which is rapidly expanding to all cities in which Groupon is offering deals. an even bigger player than Groupon. arrange and conduct events.com is the largest printable coupon Website on the Internet.6B in 2010 up from $22. which has started offering deals. Moreover. LivingSocial is a social discovery and cataloging network that connects users with their interests. Yelp also offers its users social networking features such as the ability for users to add friends. dwarfing the other players. Coupons. We estimate that the US Online spending (on which local deals market is dependent) is likely to edge up to $23. The company has more than over 50M total subscribers and offers deals in more than 300 cities worldwide. Groupon is the largest player in the emerging local deals market. Coupon Codes are available for diverse product categories. participate in discussion forums. Coupons is a leader in interactive coupon solutions. The threat of substitute products or services 13 . LivingSocial is a strong number two in the local deals market after Groupon. in our estimate. Groupon rejected the offer and is instead preparing to launch an IPO (Initial Public Offering) worth $ 15 billion.4B in 2009. Users can save money by using options such as printable coupons. The intensity of competitive rivalry For most industries. providing clients with a solution to coupon based promotions and consumer services. there are over 500 similar sites including over 200 in US. review. Coupons: Founded in 1998. Yelp is a local review website where users can write and read reviews on various categories. form groups. share and buy their favorite items. LivingSocial's social applications enable more than 85M users to catalog. Google tried to buy Groupon by $ 6 billion to strengthen its local advertising business. with more than 60% share. in December 2010 LivingSocial has been the most serious competitor. Worldwide. the intensity of competitive rivalry is the major determinant of the competitiveness of the industry. it is specific and can enjoy the discount. LivingSocial: Founded in 2007. Groupon could also face competition from players in the local review & search space such as Yelp. Save to card offers and local coupons.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 people who accepted the offer. LivingSocial offers deals in more than 127 markets and four countries. Yelp: Launched in October 2004 by former employees of PayPal.
that want to make Corporate Social Responsibility. which also affects the customer's sensitivity to price changes. The companies wishing to participate in these promotions will have to answer "The Green Story” criterion. when there are few substitutes. We can say that a group of customers is powerful when it buys a large volume of products. The bargaining power of suppliers. it means that Groupon can remove the offers if there is not the minimum number of buyers. Finally Groupon only sells his products (offers) when a fixed number of customers is going to buy it. Green Box Top was born in August 2010 and it allocates part of the profits made by selling the coupons or offers a social cause. The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure. Suppliers of raw materials. LivingSocial. This proposal called Green Box Top. and services (such as expertise) to the firm can be a source of power over the firm. or.. may charge excessively high prices for unique resources. the products bought by customers are not an important part of their expenditures. because there are millions of Groupon customers in the world that only buy a small quantity of offers. From the fact that Groupon´s providers can be changed anytime.S. this feature facilitates the search for substitute to Groupon and supplier switch. Groupon´s provider market is formed by a huge amount of companies that work in different markets. labor. Yelp…and many others).ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 The existence of products outside of realm of the common product boundaries increases the propensity of customers to switch to alternatives. The latest initiative related by the webs sites in the U. so they are less sensible to the price changes. As a conclusion it is clear that Groupon customers don’t have a big negotiation power. Also we can mention that the buyers groups are not concentrated. components. as it is mentioned in the last paragraph (Coupon. It is also a highly diversified market and there are no labor unions between suppliers making this group less powerful at negotiating time. products…ets) and is much less concentrated than the industry it sells. The bargaining power of suppliers is also described as the market of inputs. Suppliers may refuse to work with the firm. Groupon suppliers market is dominated by numerous companies (services. e. 14 .g. This is not the case with Groupon. we can conclude that Groupon´s suppliers are not a powerful group as customers are. There exist in the global market many competitors that develop offers so similar to Groupon products. In this case. Moreover.
.com/blackboard/groupon Statistics http://statistics. 2010.org/wiki/Groupon http://www.com/developers/single/groupon/8878/c http://www. December 17. B. Meet the Fastest Growing Company Ever. & JAFFE.businessinsider. 2010 CNBC. 2010 Deatsch. 2010 NEXTUP. August 4. Surprising Ways to Save Money.linkedin. Aug 20.allfacebook. August 19. Groupon Moves Into TV Land. S.com/company/groupon http://www. 2011 EDELMAN. K.grouponworks. 2010 The economist. Nextup Research Report.wikipedia. February 2011.com/company/groupon/statistics 15 .com/ http://www. Videos CBS News. October 22. Los Angels Times. To Groupon or Not to Groupon: The Profitability of Deep Discounts. Of bits and bites. On Groupon and its founder.groupon. Groupon Goes National With Gap Deal.crunchbase. Groupon launches features to keep merchants happy and away from rivals. 2010 Webography http://en. 'Daily deals' sites turn discounts into a social media phenomenon. August 30. January 2. Andrew Mason. 2010 The Wall Street Journal. August 2010 Inc.. August 16. 2010 The Wall Street Journal. Interenter Retailer. October 26. S. in Harvard Business School.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 13.. September 16. Man tries living on coupons for a year. Groupon: Fastest Growing Company Ever?. Detailed bibliography Articles Forbes Magazine. Groupon And The Clone Wars. & DUKE KOMINERS. 2010 Chicago Magazine. 2010 CNN. August 12.com/learn http://www. Does Deals With Top Chefs.
00 50.00 $5.616.00 $18. revenue effects tied to brand value and purchases with certificate) ROI over the "Long Time" Period Campaign Profit $1.076.375.00 Profit from purchases w/ certificate Long term Profits (includes growth of customer base. recurrning customers do you expect to attract from the campaign.positively or negatively? Redeemed Ticket % (R) Total Sold (T) New Patron % (N) New Patron Long Time Income (L) Brand Value (V) RESULTS 75.00 16 .52 Total Long Term Profit ROI $13.883.048.18 $0.00% 1.500. expressed as a % of total certificates sold? How much will a typical customer spend with you over their lifetime (or year/month.00% $20.00 $6.00 $0.00 Income from Investment Initial Offer Income Income from sells beyond Certificate Offer Amount New Patron Long Time Income Brand Benefit Income $24.568. etc) What other financial impact will the promotion have on your brand .00 $0. you have a 200% margin ($30$10)/$10 Factor Offer Amount (O) Sell Amount (S) GroupOn's Cut (G) Value $20.00 68.225 What is the average amount a customer spends on a purchase using the certificate? Certificate Average Ticket (A) What % of the certificates do you expect to be redeemed? How many certificates do you expect to sell? How many new.00 $10.77% CALCULATION BREAKDOWN (FYI) Cost of Investment COGS COGS for ticket beyond certificate amount COGS lifelong purchase cost Brand Damage Cost $10.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 14.00% Margin (M) 230. Appendix APPENDIX A: Example of the ROI and profits on the operations of Groupon Description What is the face value of the certificate? How much will someone spend to buy the certificate? What % of paid money will GroupOn get? What is your normal margin? If a $30 purchase costs you $10.00% $20.125.00 $0.33 130.48 $0.67 $5.
ICHEC Jean-Dominique Seroen APPENDIX B: Company Timeline eBusiness assignment 2 3rd of April 2010 Group 11 17 .
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