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Intermediate Accounting - Research Paper Example
Author : polly96
Finance & Accounting
Pages 12 (3012 words)
Groupon – Case Study Differences in Groupon’s Business Model in Comparison with Wal-Mart and its Impact on Business Risks and Financial Reporting Groupon works as an online business entity offering discount coupons which can be used its customers for purchasing discounted merchandise and other items from companies based in the United States…
The following illustration provides a simplified view of the business model followed by Groupon: Comparison of this business model of Groupon with Wal-Mart reveals some fundamental differences in the approach followed by the two businesses. First of all, as mentioned earlier, the virtual operating style of Groupon through internet is a primary factor which distinguishes the extent to which both companies can target their respective customers. Based on the differences identified in the business model for Groupon in comparison with the approach followed by Wal-Mart, it is possible to determine how these differences influence the risks identified by Groupon in its financial statements under management discussion and analysis and also the translation of these risks into financial reporting of the company. Before initiating a discussion as to how risks faced by Groupon would influence its business model, it is pertinent to understand that the success of the business model of the company largely rests on the revenue generating ability of the company through acquiring new subscribers to purchase coupons offered by the company. Since the company has only one product to offer, i.e. ...
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