Groupon Essay

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1. What are the key decisions that Andrew Mason has made during Groupon’s brief history? How have these decisions influenced Groupon’s evolution as an Internet-based business? Mason made many decisions during Groupon’s brief history first, having offers expire after just a few hours and, second, cancelling them if they do not attract a minimum number of buyers (Nelson & Quick, 2013). The literature states, a certain number of people need to buy into any given deal before it kicks in, or ‘tips’ in Groupon parlance; once the deal tips—for example, 200 people have purchased a $40 coupon for an $80 massage—the merchant and Groupon split the revenue roughly 50/50, and a group of customers has an unbeatable bargain (Nelson & Quick, 2013). Given that a minimum number of people need to buy into a coupon deal before it tips, buyers eagerly spread information among family and friends, which in turn increases the number of buyers (Nelson & Quick, 2013). This effect is like a snowball rolling rapidly down a steep hill, and it can benefit both Groupon and the merchants in the short-term (Nelson & Quick, 2013). 2. How would you describe the decisions identified in your response to question 1 in terms of programmed and non programmed decision making? It is a non-programmed decision, due to its unique decision that needs a custom made solution; in this you mostly deal with unstructured problem which are new or unusual and for which information is incomplete (Nelson & Quick, 2013). 3. How would you describe these decisions in terms of the rational, bounded rationality, and garbage can models of decision-making? Bounded rationality assumes that managers satisfice; that is, they select the first alternative that is “good enough,” because the costs of optimizing in terms of time and effort are too great (Nelson & Quick, 2013). The bounded rationality model has four

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