There are some interesting strategic lessons in this blog post about a coffee shop’s brush with bankruptcy following a “successful” Groupon promotional campaign.  A couple that I’ll point out:

  1. Fixed costs are very real and need to be taken into account. High “revenues” are not a measure of success when the costs are even higher than the money coming in.
  2. Being a cost leader (or viewed as one — which is essentially the same thing) can be dangerous because all of the people that want a deal will buy — but only as long as they get a deal.
  3. In a related area, customers that search for “deals” will move on to the next deal when it comes along rather than becoming a long-term customers.

Read more at this link: Groupon’s Success Disaster | Redfin Corporate Blog.