TO SAVOR OR TO GROUPON? 2
To Savor or to Groupon?
In the competitive world of restaurant management, choosing the right pricing and
marketing strategy is crucial to driving revenue while maintaining profitability. Mr. Chang,
owner of Enter the Dragon, faces a pivotal decision: whether to opt for a highly popular daily
deal with Groupon, which offers substantial visibility but lower profit margins, or to use
Savored, a more tailored discount platform that allows for better control over the number of
discounted tables.
This case study delves into the strategic and financial aspects of both options, providing an
in-depth analysis of how each would affect Enter the Dragon's profitability and long-term
sustainability. The case is analyzed considering supply chain management principles from
Chopra (2018) on pricing and delivery, as well as insights from various academic articles,
offering a comprehensive understanding of the decision-making process from a business and
biblical perspective.
Analysis of Groupon’s Daily Deal Strategy
Mr. Chang is considering the Groupon daily deal, where customers can purchase a $60
coupon for $30, with the restaurant receiving only $15 per table after Groupon’s commission.
According to Chopra (2018), the main advantage of Groupon’s model is the ability to generate
high visibility and attract a large volume of customers, especially during off-peak hours. The
revenue per table is modest, but the potential to attract new customers and increase awareness of
the restaurant can be seen as a form of advertising.
The analysis provided in the New York Times blog indicates that Mr. Chang would make $5
per table after considering the incremental costs of sales. While this calculation suggests that the
daily deal is profitable on a per-table basis, it fails to account for several key factors that could
TO SAVOR OR TO GROUPON? 3
impact the restaurant's financial performance. The analysis overlooks the negative effects of
customer cannibalization, where existing loyal customers might be lured by the heavily
discounted deal, leading to lower revenues from regular patrons.
Additionally, the incremental cost of serving Groupon customers, who are incentivized to
redeem their coupons during peak hours, might be underestimated. These customers may crowd
out regular diners, thus reducing the overall dining experience and potential revenue from non-
discounted customers. Ralston et al. (2022) highlight how supply chain management theories
emphasize balancing capacity with demand. The influx of Groupon customers may disrupt
service levels for regular patrons, reducing their satisfaction and loyalty.
According to Rajaguru et al. (2022), customer acquisition strategies that rely solely on
discounts may attract price-sensitive customers but fail to cultivate long-term customer loyalty.
From a biblical perspective, the principle of fairness is highlighted in (New International
Version,2011, Proverbs 11:1), which emphasizes honest scales: "The Lord detests dishonest
scales, but accurate weights find favor with him." If Mr. Chang adopts the Groupon deal without
considering the long-term impact on customer loyalty and profitability, it may be seen as an
imbalanced approach that prioritizes short-term gains over sustainable business practices. The
restaurant must consider the broader impact of attracting customers at the expense of margin,
ensuring that the business remains financially stable in the long run.
The Advantages of Savored’s Tailored Discounts
Savored, on the other hand, offers a more flexible discounting model, allowing Mr. Chang to
control the number of discounted tables and adjust the discount based on time of day and demand
TO SAVOR OR TO GROUPON? 4
patterns. One key advantage of Savored over Groupon is the ability to limit the number of
discounted tables, which prevents oversaturation of discounted customers and protects the
revenue potential from regular patrons. By carefully selecting which time slots and tables to
discount, Mr. Chang can manage his capacity more effectively and optimize revenue, especially
during slow weeknights.
The ability to limit the number of discounted tables directly addresses some of the key
disadvantages of the Groupon deal, such as customer cannibalization and overbooking during
peak hours. Bendoly et al. (2022) suggest, the ability to manage customer flow through targeted
discounts can lead to better resource allocation and a more efficient use of the restaurant’s
capacity. Ralston et al. (2022) discusses targeted pricing strategy firms must consider factor
market rivalry and competitive positioning. By controlling discount availability, Mr. Chang can
avoid excessive price competition and maintain brand exclusivity.
Additionally, Savored’s model allows for a more sustainable customer acquisition strategy.
Since the discounts are tailored and time-sensitive, customers who redeem the discounts are
likely to be more mindful of their dining experience and may return as regular patrons. This
contrasts with Groupon, where customers are often motivated by the deal itself rather than the
quality of the restaurant experience. Lee et al. (2025) argue, pricing strategies that align with
customer behavior and preferences are more likely to result in higher customer retention rates.
Biblical integration can be seen in the principle of stewardship, as articulated in (New
International Version, 2011, Luke 16:10–12)"Whoever can be trusted with very little can also be
trusted with much." By using Savored’s platform, Mr. Chang would be practicing responsible
stewardship of his restaurant’s resources, ensuring that the discounts are applied strategically to
build customer loyalty without compromising the long-term profitability of the business.
TO SAVOR OR TO GROUPON? 5
Preferred Choice: Savored or Groupon?
Given the analysis, Savored appears to be the more advantageous option for Mr. Chang, as it
allows him to exercise greater control over his discounting strategy, thereby avoiding the pitfalls
of Groupon's more rigid, high-volume model. Savored's ability to tailor discounts based on time
and demand enables Mr. Chang to optimize capacity utilization and protect the revenue from
regular customers. Additionally, by limiting the number of discounted tables, he can maintain
profitability while attracting new customers.
Making choice from a supply chain and revenue management perspective, Savored is the
superior option due to its controlled and strategic discounting mechanism. Reasons include long-
term profitability, unlike Groupon, which relies on deep discounting and offers limited customer
retention, Savored enables price differentiation without heavily eroding margins. Brand
Positioning, high-end restaurants thrive on exclusivity.
Excessive Groupon deals may dilute the restaurant’s premium brand, whereas Savored
maintains a perception of luxury while offering subtle discounts to manage off-peak demand.
Better inventory & capacity utilization Belhadi et al. (2022) highlight AI-driven techniques to
optimize demand fluctuations. Savored’s reservation-based discounting aligns with demand
forecasting, ensuring revenue maximization while maintaining service quality.
Also from a business perspective, Savored's more sustainable model aligns with Chopra
(2018) emphasis on aligning pricing strategies with operational capabilities. The flexibility and
control offered by Savored make it a more suitable choice for a high-end restaurant that aims to
balance customer acquisition with maintaining a premium brand image.
In terms of biblical principles, Savored’s approach to discounting is more in line with
responsible stewardship, as it encourages the restaurant to manage resources efficiently while
TO SAVOR OR TO GROUPON? 6
providing value to customers. This reflects the biblical principle of fairness and wise
management of resources, as highlighted in (New International Version, 2011, Proverbs 27:23)
"Be sure you know the condition of your flocks, give careful attention to your herds."
Conclusion
In conclusion, Mr. Chang’s decision between Groupon and Savored hinges on his ability to
balance short-term promotional success with long-term profitability and customer retention.
While Groupon’s daily deal offers high visibility, it risks diminishing profitability through high-
volume discounts and customer cannibalization.
Savored’s more flexible and targeted discounting model provides a more sustainable
approach, allowing Mr. Chang to manage capacity more effectively and cultivate long-term
customer loyalty. By aligning his pricing strategy with the operational realities of his restaurant
and adhering to biblical principles of fairness, stewardship, and responsible resource
management, Mr. Chang can ensure the continued success of Enter the Dragon in a competitive
market.
References
Belhadi, A., Kamble, S., Wamba, S. F., & Queiroz, M. M. (2022). Building supply-chain
resilience: An artificial intelligence-based technique and decision-making framework.
International Journal of Production Research, 60(14), 4487-4507.
https://doi.org/10.1080/00207543.2021.1950935
Bendoly, E., & Boyer, K. (2022). Behavioral operations and supply chain management. Journal
of Operations Management, 68(2), 112-128. https://doi.org/10.1007/1-04-2022
TO SAVOR OR TO GROUPON? 7
Chopra, S. (2018). Supply Chain Management: Strategy, Planning, and Operation (6th ed.).
Pearson.
Lee, J., & Moon, I. (2025). An integrated model of supply chain resilience considering supply
and demand uncertainties. International Transactions in Operational Research., 32(4),
1834–1860. https://doi.org/10.1111/itor.13459
New International Version. (2011). BibleGateway.com. http://www.biblegateway.com/versions/
Ralston, P. M., Schwieterman, M., Bell, J. E., & Ellram, L. M. (2022). The building blocks of a
supply chain management theory: Using factor market rivalry for supply chain theorizing.
Journal of Business Logistics, 44(1), 141-159. https://doi.org/10.1111/jbl.12320
Rajaguru, R., Matanda, M. J., & Zhang, W. (2022). Supply chain finance in enhancing supply-
oriented and demand-oriented performance capabilities – moderating role of perceived
partner opportunism. The Journal of Business & Industrial Marketing, 37(11), 2396-
2413. https://doi.org/10.1108/JBIM-11-2020-0487
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