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BERTILLE LION | CAREY BARGERON | RHYAUNA GUIDRY
MGMT 6580 |DR. FRITZ
INTRODUCTION
 2007 – creation of “The Point” by Andrew Mason
 2008 – creation of Groupon (group + coupon)
 Business mod...
INTRODUCTION
MISSION | CULTURE
 Mission: “to become the world's commerce operating system. By
connecting buyers and sellers through pr...
WHAT MAKES GROUPON AWESOME?
CURRENT COMPANY PERFORMANCE
 Fiscal year 2013:
Gross billings - $5.8 billion
Revenue - $2.6 billion
Operating income (...
CURRENT COMPANY PERFORMANCE
 Groupon is doing well in the daily deals market in terms of its market share and
potential g...
HISTORIC COMPANY PERFORMANCE
MAIN OPERATING METRICS
 Subscribers - total number of individuals that have completed registration through a
specific dat...
CORPORATE GOVERNANCE
Groupon Senior Management Team 2013
 Chief Executive Officer & co-founder of the company
 Eric Lefk...
CORPORATE GOVERNANCE
STRATEGIC ISSUES
Lack of management skills
 Employees grow up to 10,000
 Disconnect between top man...
CORPORATE GOVERNANCE
SOCIAL RESPONSIBILITY
 Big supporter of social responsibility
 G-Team – team responsible for organi...
EXTERNAL ENVIRONMENT- 5 FORCES
 Threat of entry (HIGH)
 Anyone can start an online discount business with enough capital...
EXTERNAL ENVIRONMENT- COMPETITION
 Groupon has five major competitors:
Living Social - offers one deal a day like Groupo...
INTERNAL ENVIRONMENT- SWOT
Strengths:
 Effective communication and fast transaction
 Innovation (=new way of purchasing)...
INTERNAL ENVIRONMENT- SWOT
Opportunities:
 Acquisition/Takeovers from large companies
 Opportunities to grow market for ...
KEY SUCCESS FACTORS
 Need to provide best deals
 Lots of variety of deals
 Get customers to develop positive word of mo...
STRATEGIC ALTERNATIVES
 Become the starting point for mobile commerce
 Redefine local commerce
 Enhance the email exper...
THE END
QUESTIONS?
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  1. 1. BERTILLE LION | CAREY BARGERON | RHYAUNA GUIDRY MGMT 6580 |DR. FRITZ
  2. 2. INTRODUCTION  2007 – creation of “The Point” by Andrew Mason  2008 – creation of Groupon (group + coupon)  Business model - one deal per day, high discount, limited amount of time to buy the deal and limited numbers of deals offered  1st Groupon - deal for Motel Bar, located just downstairs from the Groupon office in Chicago, Illinois  End of 2009 – Groupon had spread to 28 U.S cities  Today – Groupon has expanded to 48 countries and over 500 markets
  3. 3. INTRODUCTION
  4. 4. MISSION | CULTURE  Mission: “to become the world's commerce operating system. By connecting buyers and sellers through price and discovery, we have the opportunity to become one of the world's essential companies, a daily habit for our customers and merchant partners.”  Culture – creativity, trust, empowerment, transparency, dedication to customers & mindset of a startup “We assume that people are fundamentally good and people are responsible adults” – Andrew Mason Examples: Open vacation policy, financial goals
  5. 5. WHAT MAKES GROUPON AWESOME?
  6. 6. CURRENT COMPANY PERFORMANCE  Fiscal year 2013: Gross billings - $5.8 billion Revenue - $2.6 billion Operating income (excluding stock compensation & acquisition costs) - $197.2 million for the full year Gross profit margin – 58.34% Operating profit margin – 2.94% ROE – (-) 4.68% Free cash flow - $153 million (5.96%
  7. 7. CURRENT COMPANY PERFORMANCE  Groupon is doing well in the daily deals market in terms of its market share and potential growth  2013 – 59.1% market share GROUPON, INC. 59.1% OTHER 24.3% LIVINGSOCIAL 16.6%
  8. 8. HISTORIC COMPANY PERFORMANCE
  9. 9. MAIN OPERATING METRICS  Subscribers - total number of individuals that have completed registration through a specific date, less individuals who have unsubscribed  in 2011, Groupon had 83.1 million subscribers.  Cumulative customers - total number of unique customers that have purchased Groupons since 2009  in 2011, it had 15.8 million customers  Featured merchants - total number of merchants featured in a given time period  In 2011, the pool was up to 40,000 merchants  Groupons sold - total number of Groupons sold in a given time period  In 2011, Groupon sold over 60 million Groupons total.
  10. 10. CORPORATE GOVERNANCE Groupon Senior Management Team 2013  Chief Executive Officer & co-founder of the company  Eric Lefkofsky  Chief Financial Officer (since December 2010)  Jason Child  Senior Vice President , Product management (leaving in March)  Jeff Holden  Chief Operating Officer (since May 2012)  Kal Raman  General Counsel (since 2011)  David Schellhase  Senior Vice President, Engineering and Operations (since April 2013)  Sri Viswanath  Senior Vice President, Global Marketing (since June 2011)  Rich Williams
  11. 11. CORPORATE GOVERNANCE STRATEGIC ISSUES Lack of management skills  Employees grow up to 10,000  Disconnect between top management & employees Groupon went public – November 2011  Issues with Groupon's S-1 filing  CEO takes the blame  Andrew Mason forced to step down -> Eric Lefkofsky became the new CEO
  12. 12. CORPORATE GOVERNANCE SOCIAL RESPONSIBILITY  Big supporter of social responsibility  G-Team – team responsible for organizing events using the Groupon website to support many causes  Social Innovation team in Chicago  Represent corporate social responsibility department  Fall 2013 – development of two research projects Is Groupon generating more economic activity? Is Groupon shifting customers’ behavior?
  13. 13. EXTERNAL ENVIRONMENT- 5 FORCES  Threat of entry (HIGH)  Anyone can start an online discount business with enough capital.  Buyer power (HIGH)  There are low switching costs for consumers.  Buyers are always asking for more discounts/lower prices.  Supplier power (MODERATE)  There are low switching costs for merchants.  However, merchants are at the mercy of group buying sites.  Rivalry (INTENSE)  Fierce competition based on territorial expansion.  Substitutes (HIGH)  Many competitors.  Easy to find similar deals on competitors’ websites.
  14. 14. EXTERNAL ENVIRONMENT- COMPETITION  Groupon has five major competitors: Living Social - offers one deal a day like Groupon Tippr - same business model as Groupon but offers 3 deals BuyWithMe - similar model but only offers deals if enough people bought it Kgbdeals - offers several deals per day but the quantity is very limited ScoutMob - offers discounts that will allow you to spend money at a restaurant of your choice
  15. 15. INTERNAL ENVIRONMENT- SWOT Strengths:  Effective communication and fast transaction  Innovation (=new way of purchasing)  Large customers database  Leader (currently) amongst competition  Many brands and variety in products or services (serve large group of customers)  Strong brand recognition  Geographically diversified – operates in 48 countries Weaknesses:  Over leveraged financial position  Only available in most major cities  Usually first timer customers & rarely return  Recurring high marketing expenditure to maintain growth
  16. 16. INTERNAL ENVIRONMENT- SWOT Opportunities:  Acquisition/Takeovers from large companies  Opportunities to grow market for new products and services  Partnership with social networks  Growth & development of apps for smart phones  Opportunity to tie up with Internet companies such as Google and Facebook to publicize its deals and enhance its reach Threats:  Deals mostly offered on discretionary items  There are no significant barriers of entry in the daily-deals segment  Strong competition from Living Social and other competitors  The purchase power could be lower in a big market (major cities)  Economic crisis or slowdown
  17. 17. KEY SUCCESS FACTORS  Need to provide best deals  Lots of variety of deals  Get customers to develop positive word of mouth  Good access to channels  Use transactional data to track customers’ preferences  Take advantage of latest technology advances
  18. 18. STRATEGIC ALTERNATIVES  Become the starting point for mobile commerce  Redefine local commerce  Enhance the email experience  Continue to build out their categories  Globalize the platforms and processes  ??????
  19. 19. THE END QUESTIONS?
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