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| Dołączył: 23 Wrz 2010 |
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Groupon is going through this emancipation at present. But taking a step back, how defensible is Groupon as a business?
There will be hundreds of firms that will emerge over the category but that will do nothing to weaken Groupon’s ties to the cities it currently dominates. And because of the low capital expenditure of the model, there is less likelihood of consolidation in the space over time like the Radio, Newspaper,[link widoczny dla zalogowanych], Cable and Broadcast TV industries experienced, as economies of scale contribute less synergy.
Perhaps the greatest chart contributed by Gartner Research was the hype cycle. Shortly after the dizzying and ecstatic highs of future possibilities, a whiplash-inducing hangover of pessimism hits the collective psyche.
The root cause of mistaken conclusions that an ‘explosion of clones’ = no barrier to entry come from the fundamental error of not recognizing that Groupon is in the local advertising business. It’s like saying the Chicago Tribune had no competitive advantage or barriers to entry because other newspapers like the LA Times or the San Francisco Chronicle launched around the same time. The strength is tied to a particular market.
Groupon’s 50% net-revenue share of deals will likely plummet over time but the scale and other attributes of the business will mean that it will still end up with Yellow Pages-like margins over time.
Because Groupon is inherently a local media business, the barriers the firm will erect over time in the markets it dominates will be large. But the transparency of the Internet means that one of the greatest gold rushes around the globe is currently underway (there are many more cities that Groupon does not dominate than ones it does).
There are those who experiment and those who follow the formula
Bronte Media
How defensible is Groupon?
Local media has been the most defensible and profitable form of media,[link widoczny dla zalogowanych], according to The Curse of the Mogul, a book which charts the empire building (at the expense of shareholder value) of firms like News Corp and Viacom and the false synergies between various forms of media.
The opportunity is so large that it will also support many vertical markets within the format. Additionally, because of the capacity constraints of local businesses, lists will become more and more segmented and personalized.
by nikiscevak on October 17,[link widoczny dla zalogowanych], 2010 |
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