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Groupon vs. Savored: A Case Analysis

The document discusses the pros and cons of a restaurant owner using Groupon or Savored daily deals. It notes that Groupon may not provide many customers and could decrease total revenue if fixed and overhead costs are considered. Limiting the number of discounted tables through Savored has the advantage of controlling supply and leading to quick sales. Whether to opt for a Savored daily deal depends on how busy the restaurant currently is - it would be good for attracting customers if the restaurant is already busy, but not helpful for a less busy restaurant.

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Shivang Sharma
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846 views1 page

Groupon vs. Savored: A Case Analysis

The document discusses the pros and cons of a restaurant owner using Groupon or Savored daily deals. It notes that Groupon may not provide many customers and could decrease total revenue if fixed and overhead costs are considered. Limiting the number of discounted tables through Savored has the advantage of controlling supply and leading to quick sales. Whether to opt for a Savored daily deal depends on how busy the restaurant currently is - it would be good for attracting customers if the restaurant is already busy, but not helpful for a less busy restaurant.

Uploaded by

Shivang Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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To Savor or to Groupon

Answer to Question 1 (Pg-488)

I don't think so that all the aspects are taken into consideration. There is only
marginal cost given and there is no fixed cost and operating cost is given as $10
per table. The revenue earned per table is $60, which brings the operating
profit as $50 per table. Groupon is not providing much customers to Mr. Chang
and due to a smaller number of customers and higher operating cost, chances
are there that total revenue can decrease for Mr. Chang. If fixed cost and other
overhead expenses are taken into consideration, then a $5 profit would further
decrease.
So, as mentioned earlier that company hasn't considered the Fixed Cost and
Overhead Expenses, if the company further considers it, then chances are
there Mr. Chang might incur losses.

Answer to Question 2 (Pg-488)

As, demand is inversely related to supply, so as per the scheme of limited


discount, there would be an increase in demand among the customers as
supply has been restricted through number of discounts. This form of control
will quickly lead to the sale of the limited daily deals. So, yes, there is an
advantage of limiting the number of tables at a discount.

Answer to Question 3 (Pg-488)

This depends on the situation of whether the flow of customers is more or less
in my restaurant. If I have a busy restaurant, then I would opt out for Savored’s
daily deal as this will attract few customers through discounts. If I am not
having a very restaurant, then I would not opt out for the limited daily deals.

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