Groupon Inc (NASDAQ:GRPN) – trying its best to move on

Posted by George Brook June 7, 2013 0 Comment 1784 views

Groupon Inc (NASDAQ:GRPN) has been trying to restructure its management as well as its operational strategy. It is now trying to veer away from traditional selling approaches to see how it can foray into fields that are beyond the small-business ones. The company is now helping International Telecommunications Unit or ITU, sell its Microsoft New Technology Certification Bundle. This course-bundle is inclusive of- 3 Microsoft Server 2012 courses, Windows 7 and Windows 8. Previously offers such as these had been released by ITU for CompTIA Bundle, their Cisco Bundle, Microsoft Office Training Bundle and Sage 50. This course has a value of $3,295. Bargain seekers who buy this offer via Groupon save 97% and the certification bundle is available to them for $99.

And so, while technology courses are being sold via Groupon the daily deal industry has been stumbling along for quite a while now. It peaked and faded even before users and investors could say “deal”. And so, Groupon Inc (NASDAQ:GRPN) reached a crescendo and its profits fell quickly as well and Andrew Mason the CEO had to step-down in the wake of the fiasco.

A recipe for disaster

Why is it that Groupon failed? The answer is simple. As consumers get used to the discount-shot, they need higher doses to keep the high going. And somehow Groupon failed on that front. It was unable to keep it business partners’ pockets full and customers kept asking for more. It’s not just Groupon but the entire daily deal business that is under pressure. This is primarily because participants end up offering money-losing propositions to the merchants who they conduct business with.

Small businesses are the biggest victims. They literally get suckered into accepting the company’s Groupons. Restaurants end up losing money on them as consumers flood their restaurants, order highly low-priced meals and strain the service. As a result they get lousy service and food and never return.

The makeover…

Groupon has been making some changes. It has shifted from an email-based company by switching to its mobile counterpart. Today, close to 45% of transactions take place via mobile devices. The company has expanded its program base, added Groupon Goods and Groupon Getaways and what is most critical is that they are now reaching out to merchants and spotlighting customer loyalty. By updating its point-of-sales model, Groupon has now been able to bring in some unique businesses.

About George Brook

George Brook covers money and politics for GDP Insider. George is a veteran journalist who has also covered Congress, national political conventions and presidential politics. George also covers the White House as well as economic and domestic policy for GDP insider. George's reporting has won numerous awards, including two Scripps Howard awards, two National Headliners, two Gerald Loeb Awards, as well as honors from Sigma Delta Chi and the National Press Club.

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