Fixing Groupon...How did they get here?


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This presentation given by Team Erie was an analysis of what Groupon needs to do to get out of the slump they are in.

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  • On a cold November day, little baby Groupon was born in Chicago, Il to the proud parents of The points didn’t have much. They were in the business of getting people to collaborate on special projects and raise money for community service initiatives. It was a small family, but when they had Groupon, they had no idea what it would grow up to become.
  • By the time Groupon was 1 years old, it had already sold over $14,000,000 (insert yippee) worth of daily deals in the restaurant, entertainment and service industry. They found their niche as the first website to feature daily deal on the best stuff to do, see, eat in major cities.
  • Let’s talk about the New Kids on the Block (start song). No…not them, the other New Kids on The Block! Soon after Groupon started seeing a little success, other kids started showing up “on the playground.” Websites such as,, and even social networking tycoon Facebook tried to get a piece of Groupon’s market. All to no avail. According to a Reuters report, Although livingsocial is now the second largest daily deal website with over 12 million subscribers, they still trail behind Groupon falling short by a whopping 100 million subscribers. When it comes to daily deals, the New Kids on the Block doesn’t have anything on Groupon!
  • As Groupon got older, they made more money. If they continued at the pace they were growing, they could become a multi-million dollar business in just a few short months (insert Money song Ojays). So they began to grow into new markets, acquiring major cities every month, until the entire United States was saturated with Groupon deals. This had never been done before, so they decided to patent their idea in hopes to create barriers to entry in hopes of protecting their business model. Money by Ojays inserted
  • SpottieOttie by Outkast inserted
  • When Groupon decided to go public –open the books- SEC uncovered some weird accounting practices Groupon's S-1 filing came under scrutiny from the Securities and Exchange commission for an unusual accounting metric called "Adjusted Consolidated Segment Operating Income," which calculates revenue without first debiting expenses like marketing and advertising.Groupon has a rocky history with its book keeping. An SEC review of Groupon's accounting procedures forced the daily deals provider to revise its IPO filing papers last year after the company reported that it generated $713.4 million in revenue in 2010, while the SEC said that the figure should be $312.9 million.
  • 2010: Groupon turned down Google’s $6 Billion dollars…..-June 2011: Groupon filed it S-1 form with the SEC.- July 2011: Groupon's S-1 filings scrutinized by the SECJULY 2011: SEC scrutinized their accounting metric: Adjusted Consolidated Segment Operating Income- September 2011: Due to volatile stock market and growing scrutiny from SEC they put IPO on hold Margo Georgiadis, COO suddenly resignedOctober 2011: Groupon revised their S1 file New accounting metric: Gross Billings Road show to investorsNov 2011: Groupon went public
  • Groupon has a rocky history with its book keeping. An SEC review of Groupon's accounting procedures forced the daily deals provider to revise its IPO filing papers last year after the company reported that it generated $713.4 million in revenue in 2010, while the SEC said that the figure should be $312.9 million. Groupon filed for its Initial Public Offering in February 2011. Before the company went public, they restated their revenue from $713 mil to $312 mil which should’ve been a red flag to investors that there was a weakness in their internal accounting controls. The IPO was approved anyway, and the company went public officially in November of 2011, only 3 years after it started. Check out the CEO Andrew Mason’s response last public response to the ShananigansAfter the video, say: it should be clear now that the problem statement for the company is…………(complete this section) Merchant partnersFine print has turn the people offMerchants do not want to do business again with Groupon
  • Group slide:Long slide to allow everyone to read the small print – hand magnifying glassPlease take a moment to read this fine print – Come on up!!!feel free to approach if you can’t read it, Come on up!!!come here, read it close
  • Falling sound inserted
  • Claudia:Today’s Stock price is: Post this question to the class for discussion?At the end of the discussion play the video
  • Organized the word Shark and leave the letters manually by click with fly in effects(Jaws track inserted)Set a goalHomeworkAmoreRemember you are the brandKeep moving
  • Patti will open it up for the class with prepared questionsAll members of the group will ask the class questions about what they think Groupon should do1. What do you think are the possible options for Groupon to keep the competitive advantage in the market?We will take notes on the board of the synthetized main ideas and vote at the end
  • Well, you could bury your head in the sand…
  • Fixing Groupon...How did they get here?

    1. 1. Oops! Sorry! We got alittle confused! This is Groupon…
    2. 2. The Story of themega-deal tycoonBy Team EriePatti ArfordClaudia CordobaSam NoelTy Woods
    3. 3. On November 14, 2008, littlebaby Groupon was born…
    4. 4. Groupon was growing up so fast!
    5. 5. Groupon Making Millions!
    6. 6. • SEC caught wind of theirJul 2011 shenanigans
    7. 7. The Trail to the IPOJuly 2011 • Groupons S-1 form with the SEC • Groupons S-1 filings scrutinized by theJuly 2011 SECSept 2011 • IPO placed on hold • Groupon revised their S-1 fileOct 2011 • Road show to investors • Groupon goes public- 20 bucks gets youNov 2011 in the game!!
    8. 8. March 30 2012 • Lack of transparency exposed
    9. 9. And the fine print continues…
    10. 10. Stock price collapse
    11. 11. Would you invest in GRPN now?
    12. 12. Daymond John’s framework
    13. 13. Discussion…
    14. 14. What should Groupon do now?
    15. 15. Recommendations  Temporarily discontinue expansion efforts  Damage control- file for Bankruptcy  Hire an independent audit firm to restate official value  Valuate Intellectual Property and Core Capabilities and propose selling to trusted companies
    16. 16. Q&A!
    17. 17. Bye Bye!