Groupon Limited was started as a response to the inability among consumers to leverage their collective power. Through a web-based platform, Andrew Mason used social media to create a channel for collective action. However, this company lacked the ability to be independent forcing him to concentrate on consumer buying power. Over the years, Groupon grew from a local company into a global one having subsidiaries and customers in North America, Asia, South America and Europe. During these years of growth, the company has witnessed failed attempts at acquisition by Google as well as releasing the public IPO. However, in the last financial year, the company has witnessed growth and revenue stagnation creating the need for a PESTEL analysis.

Political, Economic, and Social Analysis

            Groupon Limited operates within a highly regulated environment within the United States where most of the fundamental operations are located. Over the years, the federal government has introduced several interventionist regulations that affect international businesses including IT corporations. While these regulations are mostly designed to protect small businesses, bills such as the Rebuild America Act have greatly assisted companies such as Groupon to compete with e-commerce giants such as Amazon and Google. Previous attempts to introduce a laissez-faire economy resulted in web-based firms suffering from the effects of recession. International expansion in some regions has been hampered due to the stringent American policies concerning online commerce.

Economic Analysis

            The issue of currency fluctuations has regularly surfaced in the process of transacting multimedia content over the Internet. Since Groupon is located in the United States, it primarily deals with US dollars and when converting them to other currencies, losses occur that may have a negative impact on the company’s profit margins. With the American economy just recuperating from the previous recession, Groupon may have to contend with lower sales volumes than were expected. However, with the gradual growth and stabilization of the U.S. economy, the company is expected to realize positive sales reports in the coming years.

Social Analysis

            Since Groupon Limited is an international company that operates in different societies, its operations are sometimes restricted by religious beliefs and ethical considerations. For instance, Groupon has experienced difficulties penetrating the Middle East market because of the stringent limitation placed on using the Internet by the state and Islam religion. These obstacles prevent the sales for the web-based consumer aggregation company. However, on a general note, Internet use has generally increased globally with social media capturing the largest number of users followed by e-mail and telemarketing. This means that Groupon has the opportunity to grow their market share in Africa, Asia and other regions. The company also has the opportunity to collaborate with social media sites such as Facebook and Twitter.

Technological, Environmental, and Legal Analysis

Technological Analysis

            Groupon Limited is a purely web-based company that offers goods and services through the Internet. Key to succeeding in online commerce is discovering innovative ways to reach their customers and surpass their rivals. Internet access still ranks as the major obstacle towards reaching a higher number of customers. Apart from access, the quality (speed and bandwidth) offered by internet service providers is still wanting. However, the bulk of Groupon customers can access 3G or 4G internet on tablets and other handheld devices making price comparison relatively easy for online shoppers.

Environmental Analysis

            With the development of cloud technology, Groupon has switched to cloud storage and computing thus enabling them to invest less in server hardware and storage capacity for its consumers. It is expected that in approximately a decade, there may be little use for hard drives and other electronics. Groupon has also reduced carbon emissions and other forms of pollution that are created by vehicles and humans when shopping by facilitating online shopping. Delivery systems are also environmentally friendly since one messenger can deliver goods for a hundred customers in one trip. Conversely, in the case of shipping, additional packaging is used to protect and label the products making them a potential pollution threat. Groupon will need to come up with biodegradable solutions for their packaging needs.

Legal Analysis

            In the event that Groupon Limited makes international financial transactions, several international laws have to be observed. These laws include but are not limited to transacting chemicals, drugs and certain electronic components, sensitive government and military information as well as other products and content that may be deemed illegal in the host state. Related to this issue, Groupon Limited should invest in international lawyers who advice the firm on legal matters concerning company dealings. Currently, multimedia content possesses numerous legal repercussions including distribution, duplication, and sale that have been created by film agencies, Hollywood to curb piracy (Edwards & Waelde, 2009). In conclusion, the analysis of Groupon’s PESTEL situation has revealed that the company is operating within a safe and stable environment that promises growth in revenue and assets for many years.


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Edwards, L., & Waelde, C. (2009). Law and the internet. Oxford: Hart Publishing.

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