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① PLEASE REVISE the first doc (team project) according to the professor’s comments.Comments: First, please follow closely team project requirements which you can find from our Canvas coursework.
Second, please read Groupon’s SEC filings to get necessary data about the firm and its industry.
Third, your external analysis part is rather broad. You don’t need to focus on the whole e-commerce industry section. You need to focus on Groupon and its direct competitors such as Yelp and others – firms in the same category as Groupon.
Fourth, the writing – in particular the writing of the internal analysis section – should be clearer. ② Finish Section IV part. (2-3pages)The company is GrouponSection IV: Business Proposal
1.What are the firm’s main problems?

External environment

-Threat of substitutes
-Paradigm shift
-Bargaining power of suppliers
-Or others

¬Internal operations

-Business models
-Leadership
-Culture
-Products
-Or others
team_project.doc

section_iv…docx

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Running head: TEAM PROJECT ESSAY
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Team Project Essay
Name
Institution
TEAM PROJECT ESSAY
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Team Project Essay
Identification of the industry
Groupon Inc. operates in the e-commerce industry. The e-commerce industry has
changed how businesses conduct their transactions in the retail and business-to-business
segments both locally and internationally. The advancement in technology has led to the internet
being the global marketplace critical for affording all players in the industry a global presence.
Businesses, as well as brick-and-mortar stores, are currently opening online platforms to ease the
process of reaching out to global customers as well as generating increased revenues from such
operations.
Products or Services
The primary segment of the e-commerce industry is online retailing that majors in the
sale of consumer electronics, accessories, and apparel. The growth in the industry has seen an
increase in the trends of online shopping as exhibited by the patterns of customer tastes and
preferences (Awais & Samin, 2012). The ability of the internet to provide information about the
products of a company globally has seen the rise in the revenue generated in the online retailing
sector as compared to the local and international brick-and-mortar stores. Online retailers benefit
from the speed and various dynamics of operations in the delivery of products and services to its
consumers hence the continuous expansion and coverage of the online platforms as well as the
increase in the range of products offered by the industry.
E-commerce merchants can be categorized as those that sell physical products through
electronic mediums and online platforms. Such products range from household items, clothing,
and fashion items, food products, pharmaceuticals, electronic devices and equipment,
accessories, homeware and toys among other products in the retail industry. Other products
TEAM PROJECT ESSAY
offered by the e-commerce industry include digital products, those that are downloadable and do
not require a physical distribution of the product such as online courses, music, movies among
others.
Key Players
The E-commerce industry globally is made up of key players with well-established
operation across global boundaries. The leading player in the sector is Amazon. Established in
humble beginnings, the company is the leading with reported sales of $177.9 billion in 2017
from its core activities (Donici et al., 2012). The company deals in the distribution and sale of a
range of products including electronics, books, software, and pet supplies among others. The
company employs an estimated 556,000 personnel in its global stores as well as its supply chain;
a reflection on the enormity of the company’s online stores operations. Amazon has adopted a
growth strategy focusing on its core retail business to ensure growth in its operations. Amazon
depends on the data obtained from its market research useful in coming up with better products
and services that adequately meet the needs of the consumers.
Another major global player in the e-commerce industry is Alibaba. Founded in China,
the company deals in the distribution of wholesale products through its online platforms across
the worldwide market. The company caters for the needs of both retailers and consumers. The
company stocks multiple products through collaboration with vendors to ensure the availability
of numerous product sessions to meet the needs of the consumers in the market.
E-Bay is another vital player in the e-commerce industry. The company provides a
marketplace that supports Business to Customer (B2C) and Customer to Customer (C2C)
transactions. The company offers a wide variety of products categories that cover almost
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everything. The unique business model adopted by E-Bay allows for product bidding by
interested consumers with the product being sold out to the highest bidder.
Other well-established players in the global e-commerce industry include Jindong,
Zappos, Home Depot, Flipkart and Otto among others. The availability of a market for retail
products across global locations has seen the rise in the competition of the e-commerce industry
as well as the need for players to offer differentiated services, products or prices to remain
competitive in the market (Shin, 2001).
Environmental Analysis of the Industry
The e-commerce industry has seen exceptional growth with various factors in its
operating environment affecting its operations. China and the United States form the largest
markets e-markets globally. Ana analysis of the industry’s external environment shows various
factors that influence its operations hence the need for players to take into account these factors
in running the activities of their e-commerce businesses (Laudon & Traver, 2016).
Political Factors
E-commerce companies operating in the global marketplace faces various political
factors that could significantly affect the operations of the frim and hence their overall
profitability and market share. E-commerce players have to take into consideration the legislative
and regulatory factors put in place by various governments that could influence their operations.
For example, global e-commerce companies like Amazon and E-bay’s growth in the Asia-Pacific
region have been impacted by the Red Tape frameworks established in India that features a lot of
bureaucracies affecting the decision-making as well as the operations of the firm.
Regulatory and political challenges affecting e-businesses have risen over time as a result
of the need by nations to protect local companies against intense and unwarranted competition
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that could lead to their collapse (Kshetri, 2007). For example, the regulations established for the
operation of e-commerce businesses in Europe have been seen to be targeting e-commerce
companies whose primary activities are in the United States. Such issues are likely to affect the
operations of firms in the market which could result in a decline in the growth of e-commerce
businesses globally. Additionally, political stability in the various regions within which ecommerce firms carry out operations is critical for their overall performance and profitability.
Political stability is also a factor of economic security. The occurrence of political chaos could
result in the disruption of the operations of e-commerce businesses and bear an overall impact on
the activities and growth of firms in this industry.
Economic Factors
Economic factors are directly related to the operations of e-commerce businesses and
affect the revenues and profits of these firms. Economic fluctuations affect the purchasing power
of consumers and consequently the revenues generated by firms from its core operations. Higher
economic activity associated with the stability of the economy in the recent past is a factor of
enhanced performance for e-commerce businesses and hence increasing growth and profitability
in the e-commerce industry (Sila, 2013). Higher economic activity resulting from stable
economies globally has increased revenues recorded in the e-commerce industry whereas low
economic activity adversely affects growth and operations of e-commerce platforms. It is critical
to note that economic factors have a direct and profound impact on the e-commerce industry.
Porter’s Five Forces Model
The threat of New Entrants
The risk of new entrants in the e-commerce industry is relatively low as a result of the
need for a substantial investment in marketing, human resources, and technology for new
TEAM PROJECT ESSAY
entrants to capture a significant portion of the market. The barriers to entry into the industry are
moderately high. Although the capital required is not too high, it would take time for a new
company to establish itself and build its brand reputation and subsequently earn the trust of
customers.
Industry Rivalry
The number of players in the e-commerce industry is very high; hence the level of rivalry
between them is high. The number of international and local brands has grown significantly
leading to higher competition (Rothaermel, 2015). Competition arises from various online and
brick and mortar stores due to the homogeneity of the goods offered by these firms.
Bargaining power of Suppliers
The bargaining power of suppliers in the e-commerce industry is reported as low to
moderate. It is evident that brands have established rules to be followed by its suppliers
regarding quality, wages, sustainability, and labor. The suppliers have limited options; hence the
e-commerce brands have the upper hand (Gallaugher, 2002).
Bargaining power of buyers
The bargaining power of buyers is relatively high. This is because the players in the
industry are numerous, offering homogenous or substitute products; hence the ability of the
buyers to switch from one dealer to another with insignificant switching costs. Additionally,
there is sufficient information available to consumers and useful for making decisions regarding
the products in the market. The players in the market have to try hard to retain customers and
consequently remain competitive in the market.
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The threat of Substitute Products
The main risks of substitute products in the e-commerce industry emanate from
competing e-retail businesses as well as physical retailers. Brands in the industry try to earn a
competitive edge through offering low priced-goods, high quality products and excellent
customer service (Lumpkin et al., 2002). The similarity of the products provided by these firms
results in increased chances for consumers to switch from one brand to another of from ecommerce to physical stores.
Andrew Grove’s Sixth Force
The availability of Grove’s sixth force is critical in the analysis of the effect of
complementors on the overall performance in the e-commerce industry. Complementors are to
companies or entities that offer or sell goods and services that are complementary to those
provided by the firms in the e-commerce industry. Complementary products provide significant
value to consumers when used together as compared to when they are used differently. The
presence of the complementary force in the e-commerce industry is critical for its influence on
the competitive structure of the industry (Prasad, 2011). If the businesses of the complementors
are booming, then this could positively affect the activities of the e-commerce industries in the
market. Consequently, if the businesses of the complementors are slow, this could affect the
operations of the e-commerce firms.
Industry Life Cycle Analysis Model
The e-commerce industry is at the growth stage as exhibited by the industry’s ability to
attract the attention of a more significant market segment, and the profitability of the sector is
rising significantly. Additionally, at this point, the complimentary product emerges increasing
the value of customers and thus increasing the demand for the products offered by the e-
TEAM PROJECT ESSAY
commerce companies. The e-commerce industry is at the late growth stage as exhibited by the
stability in the revenues generated by players in this industry. It is critical that Groupon Inc.
redefines its business model to remain competitive in the industry and thus maintain its
performance and profitability (Mohapatra, 2013). As the industry moves toward maturity, there
is a need for Groupon to develop strategies aimed at ensuring long-term success.
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References
Donici A. N., Maha, A., Ignat, I., & Maha, L. G. (2012). E-Commerce across United States of
America: Amazon. com. Economy Transdisciplinarity Cognition, 15(1).
Gallaugher, J. M. (2002). E-commerce and the undulating distribution channel. Communications
of the ACM, 45(7), 89-95.
Kshetri, N. (2007). Barriers to e-commerce and competitive business models in developing
countries: A case study. Electronic commerce research and applications, 6(4), 443-452.
Laudon, K. C., & Traver, C. G. (2016). E-commerce: business, technology, society. Awais, M.,
& Samin, T. (2012). Advanced SWOT Analysis of E-commerce. International Journal of
Computer Science Issues (IJCSI), 9(2), 569.
Lumpkin, G. T., Droege, S. B., & Dess, G. G. (2002). E-commerce strategies: achieving
sustainable competitive advantage and avoiding pitfalls. Organizational Dynamics, 30(4),
325-340.
Prasad, A. (2011). The impact of non-market forces on competitive positioning understanding
global industry attractiveness through the eyes of ME porter. Journal of Management
Research, 11(3), 131-137.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Shin, N. (2001). Strategies for competitive advantage in electronic commerce. J. Electron.
Commerce Res., 2(4), 164-171.
Sila, I. (2013). Factors affecting the adoption of B2B e-commerce technologies. Electronic
commerce research, 13(2), 199-236.
Mohapatra, S. (2013). E-commerce Strategy. In E-Commerce Strategy (pp. 155-171). Springer,
Boston, MA.
Section IV: Business Proposal
1.What are the firm’s main problems?
 External environment
-Threat of substitutes
-Paradigm shift
-Bargaining power of suppliers
-Or others
Internal operations
-Business models
-Leadership
-Culture
-Products
-Or others

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