Homework answers / question archive / Q1)Is Groupon appealing to consumers? Is Groupon appealing to merchants? Why or why not?         Q2: As a two-sided platform (with consumers on one side and merchants on the other side), does Groupon have a sustainable business model? Why or why not?   Q3: Estimate the profitability of Groupon promotion for American Apparel (case p

Q1)Is Groupon appealing to consumers? Is Groupon appealing to merchants? Why or why not?         Q2: As a two-sided platform (with consumers on one side and merchants on the other side), does Groupon have a sustainable business model? Why or why not?   Q3: Estimate the profitability of Groupon promotion for American Apparel (case p

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Q1)Is Groupon appealing to consumers? Is Groupon appealing to merchants? Why or why not?

Q2: As a two-sided platform (with consumers on one side and merchants on the other side), does Groupon have a sustainable business model? Why or why not?

Q3: Estimate the profitability of Groupon promotion for American Apparel (case p.6), based on the assumptions that $15 of voucher revenue goes to the merchant and $10 goes to Groupon, and the redemption rate is 80%. Also, for simplicity, assume that if a consumer does not redeem the voucher, Groupon and American Apparel will keep the revenue instead of making a refund. (These are the common assumptions you will use throughout Question 3. Also, notice that you can find information about American Apparel’s gross profit on page 6 of the case, in the footnote. You need this information to figure out the merchant’s cost.)

• 3.1. What is Groupon’s profit from this promotion?
• 3.2. What is American Apparel’s profit? Imagine the following scenarios:
• 3.3 What can you conclude based on the computation of merchant’s profitability in all these scenarios? Is Groupon a good promotional method for merchants?

Q4: Broadly speaking, daily deals can serve one of two purposes:

Q5: In your opinion, among the new initiatives dubbed as Groupon 2.0, which one improves its business model and is most likely to succeed? (Please conduct your own research online as the case may not provide the most up-to-date information about Groupon.)