asu.instructure.com SCENARIO 2 Groupon After graduating with a degree in music from Northwestern University, Andrew Mason spent a couple of years as a web designer. In 2008, the then 27-year-old founded Groupon, a daily-deal website that connects local retailers and other merchants to consumers by offering goods and services at a discount. Groupon creates marketplaces by bringing the brick-and- mortar world of local commerce onto the Internet. The company basically offers a "group- coupon." If more than a predetermined number of Groupon users sign up for the offer, the deal is extended to all Groupon users. For example, a local spa may offer a massage for $40 instead of the regular $80. If more than say 10 people sign up, the deal becomes reality. The users prepay $40 for the coupon, which Groupon splits 50-50 with the local merchant. Inspired by ow Amazon.com has become the global leader in ecommerce, Mason's strategic vision for Groupon was to be the global leader in local commerce. To target and fine-tune its local deals, Groupon relies heavily on human labor to do the selling. Measured by its explosive growth, Groupon became one of the most successful recent Internet startups, with over 260 million subscribers and serving over 500,000 merchants in the United States and some 50 countries. Indeed, Groupon's success attracted a $6 billion buyout offer by Google in early 2011, which Mason declined. The spurned Google later created'ts own daily-deal version with Google offers, and later Amazon (via Living Social), and Facebook also moved in. In November 2011, Groupon held a successful initial public offering (IPO), valued at more than $16 billion with a share price of over $26. But a year later, Groupon's share price had fallen 90 percent to just $2.63, resulting in a market cap of less than $1.8 billion. In early 2013, Mason posted a letter for Groupon employees on the web, arguing that it would leak anyway. stating, "After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding - I was fired today." Assuming Groupon's core competence was initially valuable and rare, what type of competitive advantage could it expect? Competitive disadvantage Temporary competitive advantage Sustainable competitive advantage Competitive parity