I. Introduction The term business model gained popularity due to “the explosive growth of new ventures sparked by the internet”1 and is often erroneously used “to glorify all manner of half-baked plans”.2 Strategy is another “buzzword” that is often mistakenly used interchangeably with business model. There are numerous differences between the two but the defining characteristic is that a “business model is independent of competitors and the current state of the market”,3 focusing inwardly to describe, “as a system, how the pieces of a business fit together”.2 Strategy focuses on performance, looking outwardly at the industry, analyzing the current competition, future competition, suppliers and customers, and answers the key question “how you will do better than your rivals.” 2 Analyzing Groupon’s business model and strategy will give insight into how they need to focus efforts in an attempt to rebound from a recent downturn. Focusing on how they are looking inwardly to restructure the business model rather than outwardly towards a shift in strategy, will emphasize the role that both concepts play in creating and maintaining superior performance. II. Background Groupon is a social commerce website connecting buyers and sellers with “deal-of-the-day” coupons through emails, apps and social media. Launching in Chicago in 2008, they quickly expanded to New York, Boston and Washington DC. By 2010 the company served over 250 markets in 35 countries. A first mover advantage and a simple business model of linking buyers and sellers while keeping a percentage of the transaction proved successful for Groupon early on, but recent struggles to maintain a competitive advantage have resulted in drastic changes to Groupon’s business model... ... middle of paper ... ...lly be the digital storefront where people start any online shopping trip”.7 These trends show Groupon moving away from the original business model of “push” (daily deals sent to consumers) to “pull” (a portal to search for deals),8 and it appears they are about to attempt a nearly impossible feat by going into direct competition with industry giants Amazon, eBay, Expedia, and Google. Works Cited EndNotes____________________________________________________________________________ 1 What Managemnt Is: How It Works and Why It’s Everyone’s Business 2 Why Business Models Matter 3 Difference Between Business Model and Business Strategy 4 From Strategy to Business Model and to Tactics 5 Groupon 6 Groupon Still Groping For A Viable Business Plan As Stock Crashes 7 Groupon Tests Out a Staples Competitor, Groupon Supplies 8 Groupon Struggles to Find a Winning Strategy
Nordstrom can continue providing their exceptional online experience and client focused approach using their online system by offering an unmatched online experience that copies their in-store customer service. This would allow Nordstrom to raise its revenue considerably as well as further improving their brand image. I will also discuss specific ways of successful execution, and the steps required to provide Nordstrom a stunning picture of how to execute strategy.
Verizon Communications Inc. is one of the leaders in providing communication services around the world. Its primary offerings are wireless, wireline, and broadband communication resources to meet residential, business, and government needs. As a leader in its industry, how can Verizon continue to grow its business? What strengths, weaknesses, opportunities and threats impact the success of Verizon now and in the future?
G. Nickels, W., M. McHugh, J., & M. McHugh, S. (2013).Understanding business. (10th ed.). New York, NY: McGraw-Hill/Irwin.
In the business world, many organizations utilize different methods, business strategies, and best efforts to profit, compete, sustain, and grow for their firms in the short-term and the long-term investments. Although there are challenges, obstacles, and other business difficulties that businesses must overcome those challenges by implementing such business techniques, and other methods to keep firms to be competitive, and a profitable one. Consequently, the business model that Mr. Thomas Farrow believed that it could contribute tremendous financial profits to his bank.
Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
With the use of Internet, anyone can write reviews on any product or service. Millennials are more likely to look at online ratings, and take the opinions of people they know on social media. “They have twice the number of friends on social networks. Our research found that they also have a deeper level of engagement and multiple points of contact with their connections throughout the day (Fromm). Millennials grow a vast network of followers on social media, which means good or bad reviews can go viral in minutes. One action companies need to do to get positive evaluations, is to increase traffic to their website and keep retention of buyers high. Numerous corporations have adapted rewards programs into their business models to build excitement about their products, and keep customers coming back. The program allows people to earn points that will accumulate to various rewards. In some instances, if people in the program invite friends to join, they can get a percentage of their purchase. Reward programs have been established across a variety of industries, such as food to retail. To accommodate the millennial mindset of convenience, most reward programs have apps for smartphones that keep track of points and allows people to pay through the
Purchasing timing: “a deal of today must not miss” is commonly built into Groupon’s customers’ minds. Offering a huge discount and can easily be purchased via internet or mobile technology, furthermore, the product is home delivery. Reference groups: The social influencers like Facebook, Twitter are helping the growth of Groupon. When the responses and comments are positive, many consumers will follow the trends bearing in mind. Groupon consumers follow the below five-stage purchase decision process.
What marketing objectives can be accomplished using group deals? There are a few objectives that can be accomplished by using social media site like Groupon. Some of the objectives is it attracts lots of consumers by appealing to those that are looking for a better deal and to save money. Groupon helps other business promote and advertise the brand plus business. Sites like Groupon, Living Social, and is the approach financially sound?
In addition to Gap Inc.’s competitive advantage given its multiple brand, channel and geography model, the company plans to build its online success by delivering an industry-leading world class platform for consumers as the retail landscape continues to merge online and in-store shopping experiences. This end-to-end system, which includes capabilities such as ship-from-store, find-in-store and reserve-in-store, is designed to leverage Gap Inc. channels and resources to drive store traffic and conversion, while meeting the needs of customers who increasingly demand an integrated shopping experience.
In this millennia, there are a lot of emerging businesses with many pros and cons of it. One of the main advantages for consumers is that they would have a lot of choice. The downside of having numerous emerging businesses is the competition of an industry would be stiffer. Therefore, Michael Porter, a professor based currently at Harvard Business School, has developed a universal strategy for any businesses which is known as Porter’s Generic Strategies. (Harvard Business School, n.d.) Porter’s Generic Strategies come after Porter’s Five Forces model which is introduced to help a business understands their situation and it is useful to recognize a business’ strength about the current competitive position. (MindTools, n.d.) The strategies are divided into 3 sections which is cost leadership, differentiation and focus. The focus section
When the buzzword of business model was very active and reactive during the internet boom, many individuals did not understand the concept of the proper business model for the proper business (Magretta, 2002). When not utilizing the right type of model for the organization, the model will be misused and distorted (Magretta, 2002). Understanding the traditional organization and learning organization, will allow an organization to determine which time of organization they desire the most.
The increased interest of social media usage has led numbers of company and business to provide new experiences for their customer to leverage media platforms to make more efficient and effective purchases (Rad, 2010). In addition, the emergences of Web 2.0 technologies are dramatically changing the web collaboration concepts, which made the web more social and interconnected. The aforementioned phenomenon is called “social commerce”. It is a subset of electronic commerce, which utilize social media, or online media that support interaction and user contributions to enhance the online purchase experience.
A successful business strategy will identify changes in the external trends in the market place. Plan out what the company’s future direction is. Set out the goals for the management team. It will identify a vision of where the company wants to be in the future. Keep all employees informed of the direction of the company.
Business Model Innovation as a research field and practice, offers a way to think about renewing competitive advantage and bolter growth in an increasingly challenging environment. Developing a successful business model is insufficient to assure competitive advantage as imitation is often easy: a differentiated (and hard to imitate) - yet effective and efficient business model is more likely to yield profits. Business model innovation can itself be a pathway to competitive advantage if the model is sufficiently differentiated and hard to replicate for incumbents and new entrants alike (Teece 2010). Moreover, studies on the topic have shown that firms that were financial outperformers put twice as much emphasis on business model innovation as underperformers (Giesen et al. 2007) and a better business model often will beat a better idea or technology (Chesbrough 2007).
The business plan will also be useful in facilitating the adoption of a strategy that will help the business prosper in the modern market. The plan will be a critical tool that will help in the production of a reliable strategy for attaining the goals and objectives. The proposed business plan will be implemented in three years time. Within the first three years, the business i...