groupon final ppt

27
by- Andrew Gambino Collective Buying Power “This deal is On”

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Page 1: GroupOn Final PPT

by- Andrew

Gambino

Collective Buying Power“This deal is On”

Page 2: GroupOn Final PPT

GroupOn’s Roots:2007: Andrew Mason, a Northwestern University

graduate living in Chicago, launches ThePoint.com, "an online platform for petitioners to muster support for all sorts of causes.“

November 2008: After ThePoint.com fails to attract enough ad revenue to stay afloat, Mason tries his luck with daily-deals site Groupon.

2009-2010: Groupon rapidly expands into new cities in the U.S. and around the world.150 markets domastically100 more worldwide

Page 3: GroupOn Final PPT

Roots conti…Meanwhile, a multitude of Groupon’s competitors

and copycats appear. Some, like Living Social, BuyWithMe, or Facebook's new "Deals“

November 30, 2010: Google reportedly offers $6 billion to acquire Groupon.

June 2, 2011: Groupon filed for a $750 million IPONovember 4, 2011: Daily deals site Groupon

priced its initial public offering at $20 a share. April 4, 2012: Groupon is forced to restate there

earnings claiming that a “material- weakness” in its internal systems was to blame for the inflation of its fourth quarter revenue by $ 14.3 million.

Page 4: GroupOn Final PPT

Corporate Strategy

They emphasis a combination between a cost and broad strategy.Leader in Saving consumers $$$$.

GroupOn operates globally. New expanding markets will furhter its reach across the globe.

Groupon’s mission statement: “to become the operating system for local commerce.”

Groupon is setting out to reinvent the multi-trillion-dollar local commerce ecosystem.Mason is reinforcing Groupon’s long time claim of

being able to connect with local retailers and boost their sales.

Page 5: GroupOn Final PPT

SituationSituation: (Gilbert, 2011) Groupon’s main

problem is that their business model is unsustainable. They face increasing competition from other direct offering companies. Secondly, Groupon is based on selling other company’s products and as a result, their selling power is only as strong as the item that they are selling.

Groupon is in a very dire and serious position with competition nipping at the heels.Living Social backed by Amazon. (Biggest

Competition)

Page 6: GroupOn Final PPT

Leaders/LeadershipAndrew Mason, CEO, Founder

(Northwestern University)Man with great vision.Strengths- Fully understands web

Technology and meeting customer needs (Software Developer)

Started “The Point” (Campaign to raise money or participation in communities)

Referred to by co-workers as arrogant: Not great with sales people

Page 7: GroupOn Final PPT

Leaders/LeadershipJason Child, Chief Financial OfficerBrought from Amazon ( CFO and VP of

Finance)Over 7 years as a C.P.A and consulting

manager for Arthur Andersen.Lived in Munich, Tokyo, and Seattle (helped

with presence in global markets)

Page 8: GroupOn Final PPT

Leaders/LeadershipJason Harinstein, Senior VP and

Corporate DevelopmentWorked in Corporate Development with

Google

Rob Kilgariff, Vice President of North American Sales and Marketing

Came over from Global ScholarOver 30 years of sales and marketing

experience.

Page 9: GroupOn Final PPT

InnovationStarted off as “The Point”Ground breaking approach to online

collective action.Formed GrouponMakes available a wide variety of products

and services for affordable prices in your neighborhood.

Page 10: GroupOn Final PPT

GlobalizationStarted in ChicagoHas a reported 15 million subscribers in 48

countries.Low barriers to entry/ton of competitors.Bought “CityDeal” in Europe gaining 80

new markets in 16 countries.Latin America, bought competitors in Chile,

and launched services in Brazil.Bought competitors in Russia and Japan

Page 11: GroupOn Final PPT

EthicsFeatured a non-profit campaign “ A great

deal on a good deed” (International Medical Corps)

Raise money for children medication in Haiti and Pakistan

GrassRoots (non-profit)Raises awareness and funding for projects

in local communities.

Page 12: GroupOn Final PPT

Analysis conti…

Corporate Culture Wildcard

QuirkyModernSimple

StrategyGreat prices to get

out and exploreSave $$$

Innovators

First in business

Customer databaseLink up with up

and coming businesses

Page 13: GroupOn Final PPT

Internal Value Chain Primary Activities

-Inbound Logistics-Deals come from local businesses.

-Operations- Deals are only executed once enough people buy them.

-Outbound Logistics-Groupon reaches many consumers through e-mail.

-Marketing-Large marketing budget has constantly brought in new subscribers.

-Service-Groupon offers refunds to unsatisfied customers.

Page 14: GroupOn Final PPT

Internal conti… Value Chain Secondary activities

-General administration and human resources both appear to be critical weak spots in the value chain as the CEO hasn’t been able to soothe investors fears, and employee complaints about compensation and work hours have been numerous

-Technology Development- Groupon has been acquiring firms to help meet consumer needs like Adku, which helps users shop online.

-Procurement- Groupon uses numerous suppliers, making it not particularly vulnerable to each individual business.

Page 15: GroupOn Final PPT

Internal conti..VRIO Framework

-Value-Groupon’s massive size and reach help give the company value

-Rarity-Groupon lacks rarity as there are plenty of other rivals in multiple forms.

-Imitability- Low barriers to entry make Groupon rather easily imitable.

-Organization-Groupon’s worker disputes and lack of profits suggest it is currently not optimally organized.

Page 16: GroupOn Final PPT

Internal conti…Industry Life Cycle

-Groupon is currently in the maturity stage.

*Increase in competitors.

*Slowdown in growth.

-Becoming a cost leader is one possible strategy to remain ahead.

Page 17: GroupOn Final PPT

External analysis: Porters Five Forces

-Threat of Suppliers-Low, due to numerous small businesses to choose from.

-Threat of Substitutes-High, due to many other ways to save cash.

-Threat of Entry- High, due to barriers of entry being low.

-Threat of Rivalry-High, due to large amounts of competitors, such as LivingSocial backed by Amazon.

-Threat of Buyers- High, because in order for deals to even go live a certain number of people must participate.

Page 18: GroupOn Final PPT

External conti… Macro Environment

-Economic Conditions- The current recession would be favorable for Groupon

-Technological Environment-Wide spread internet access is necessary for the company to enter a market

-Political Environment- Different states and countries have different laws on what can be discounted.

-Population Demographics-Groupon’s customer base is mostly made up of single, working women.

-Sociocultural Environment-Groupon has favorable conditions in countries where women in the workforce are on the rise.

Page 19: GroupOn Final PPT

External conti…

Competitive Dynamics of Resource Imitation

-Groupon has decided to change its’ tactics in response to increasing competition.

-Recently the company has been purchasing tech companies who improve end user experience.

-Groupon hopes these purchases will help improve the number of coupons sold per customer.

Page 20: GroupOn Final PPT

S.W.O.TInternal; inherent to brand/company

STRENGTHInherent source of competitive advantage within the Brand (of genuine relevance to the consumer)

WEAKNESSInherent cause of competitive disadvantage within the Brand (of genuine importance to consumer)

OPPORTUNITYUnsatisfied or poorly satisfied need in the marketplace which our company can perform profitability

THREATPotential problem from external source which could undermine our Brand’s competitive position if not addressed.

External; outside of brand/company control

Page 21: GroupOn Final PPT

S.W.O.T Strengths

- Groupon is a well known brand name within it’s field. -Groupon currently has the largest subscriber base compared to it’s competitors.-Set Up in 48 Countries-Large supplier base-Large advertising budget brings in subscribers.-Lack of subscriptions enables easy user access.-First mover advantage.

Weaknesses-Groupon’s business model leaves little profits to it’s partners.-Deals don’t guarantee repeat customers.-Groupon has constantly struggled to maintain profits each quarter.-Deals must follow through before any income is earned.-Electronic model misses out on older subscriber base.-Disgruntled workers.-Growth slowdown.

Page 22: GroupOn Final PPT

S.W.O.T

Page 23: GroupOn Final PPT

S.W.O.TOpportunities

-Plenty of untapped markets left worldwide for Groupon to enter.-Groupon could expand into different business areas.-Different distribution avenues available.-Plenty of companies to align with to spread word of deals over.-Potential suppliers aplenty.

Threats-Eventual rise of the economy could lead to lower sales.-Competition for Groupon has been continuously increasing.-Substitutes, such as penny auctions, are numerous online.-Some laws can prevent distribution of certain deals.-Negative press.

Page 24: GroupOn Final PPT

Success: Innovators

Daily online deals could easily have been an idea that local newspaper publishers pioneered, as they once upon a time owned local classified markets.

Groupon sales more than quadrupled in 2011, when it said it sold to more than 33 million customers for 250,000 merchants around the world

GroupOn was a new-line advertising company. It has managed to take its payment not from advertisers of products and services but, instead, a fee from every successful consumer transaction.

Page 25: GroupOn Final PPT

Success conti… Marketing to the Masses

Groupon’s pitch to small businesses was as follows: ”Radio, print, TV, billboards—nothing delivers customers

with the speed, reach, and power of a Groupon campaign. There’s no upfront cost and we guarantee results. Try asking for that from any of your other advertising channels.”

being a company for the local and small businesses that are looking for a source of advertising.Small businesses saw an actual increase in profits with help

of GroupOnWas very successful in exploiting group discounts to

successfully getting people good deals on things they wanted. First site to offer group discounts for just about anything.

Page 26: GroupOn Final PPT

Success conti…Great job promoting their site, merchant deals,

and services using social media sites like Facebook, Twitter, others.

Along with a new source of marketing for small businesses, they offered businesses a way of tracking their deals & consumers.

Small businesses were now able to:Learn more about their customersWhere they liveHow they spend their $$$What they buy

Page 27: GroupOn Final PPT

Recommendation:Our group trusts if GroupOn allowed

consumers the ability and/or option to structure, “their own deals”, it would give GroupOn a new strategy and upper hand that many industry insiders and economist say it so urgently needs

Groupon should give customers the option to personalize the sales and special discounts the way they want, and then have the merchants bid on who gets to fulfill those deals. Utilize the true meaning of the word “Social”,

This would once again make them innovators and leaders in their industry.