Groupon Company

Groupon Company

The Groupon Company is a deal of the day website, which provides its customers with discount gift certificates that can be used in local and national companies. Groupon started its operations from Chicago in 2008. Up to 2010, the Groupon Company has spread its services to 150 markets in North American and 100 markets in Asia, South America and Europe. The company has registered users up to 35 million.

At the first year of its earning release in 2011 as a public company, it has made a loss of $9.8 million, which has badly disappointed the investors of the company. Like Netscape, the Groupon Company has failed to capture the   value and despite many promises, its performance was contrary.  The Groupon cannot sustain its competitive advantage in the market because the customers of Groupon are not willing to pay it even the cost of its products. This is just because it could not have maintained its value. As the Groupon grows, its costs are skyrocketing as a percentage of its revenue.

Marketing expenses rose to 37 percent from 15 percent, which is far greater increase than its competitors are. The selling and administrative costs rose to 33 percent form 25 percent.The reason for this phenomenon is the lack of long-term relationships with its customers, which has, lessens the revenues for investors. Moreover, there was a lack of loyal employees, which in turn generated the deficiency of loyal customers. This lack of loyalty and sustainable relationship has affected the long-term competitive advantage of the Groupon Company. (Peter, 2011)

Nucor Steel and Competitive Advantage

           Nucor Steel Company’s social ecology has made the company capable to excel the three tasks regarding the accumulation of knowledge:

1. Creation of knowledge form the direct experiments

2. Getting or acquiring the external knowledge

3. Retain the knowledge that is created externally

The Nucor Steel got the access to the superior human capital by finding the skilled and hardworking plants in the urban areas. The company attained a competitive advantage by attaining a leading position in those locations by offering the highest compensation packages to the employees and thus inclined them to work with the company. The company attained such a popularity that some 1200 people applied for only eight job positions. In this way, the company became able to make superior it’s hiring and selection criteria and employed the dedicated, goal oriented and self-reliant people for the company.

The companies like the Groupon, having the all other skills to successfully operate the business in the market have the wide variety of chances to become superior by attaining the competitive advantage in any area of their business. They can build the foundation by investing in the continuous and on the job training and orientation programs to cultivate the skilled marketing personnel in the company.

Just like the Nucor Steel, the Groupon can motivate the talented individuals by offering the rewards for the better productivity. In simple words, the incentives should be the function of output. In this way, the employees can get the good chances of growth by discovering the new techniques of performance. (Joseph, 2010)

References

Joseph, D. M. (2010, 01 22). How Companies Rebuild Competitive Advantage. Retrieved 02 06, 2014, from Bloomberg Business Week: 

Peter, C. (2011). Memo to SEC: Groupon Has No Competitive Advantage, Stop Its IPO. Forbes, 10.