Groupon and competitive strategy →

Megan McArdle is skeptical that Groupon’s business model remains viable. It has commanded little loyalty from its customers or the businesses that offer the deals. Perhaps worse, it operates in a crowded field with few ways to sustain its competitive advantage:

Moreover, to the extent that the model did work in other sectors, it would be very easy to imitate.  (And it was, endlessly).  Groupon’s core asset is essentially a mailing list, and mailing lists don’t have great network effects, or economies of scale, to protect their owners against competitors.

It sounds like the firm needs a primer on Porter’s Five Forces.

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