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Quality Control

Rick Coyne Ginna Erickson Elias Carofilis

Groupon will be back on the top, 100% quality guaranteed!

Wednesday, February 19, 14

“Groupon's mission is 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” (Our Mission, n.d.).

Groupon became a public company in 2011, and since then has worked to create a stable company that assists in connecting consumers and companies.

Groupon has a website and an application for smart phones, where consumers can access the daily deals.

Current market position is $10.26 a share and down 0.25 (2.38%) as of February 18, 2014

Groupon’s values are; start with the customer and work backwards, great people make great companies, intolerant of mediocrity, build for the long term.

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StrengthsStrengths

The company is willing to go the extra mile to make sure that all customers are happy with the experience with the site, as

well as the experience at the business that Groupon is advertising.

Groupon has a large network of business that they work with, and Groupon can offer many

opportunities to its customers.

Groupon has a strong customer base, with a desired demographic of educated, working women.

Groupon has a strong presence on the Internet, and uses technology to connect with its customers.

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Weaknesses

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In 2013, only two years after Groupon went public, the organization fired the CEO, Andrew Mason

(Carlson, 2013).

During Mason’s tenure, there were accounting issues and employees sued the company, among other

internal issues.

Businesses don’t trust the company to bring them back profits worthy of advertising with the sites.

Customers don’t feel like they can trust the company as well and don’t feel important enough which is a huge weakness considering there are strong

competitors out on the market trying to steal customers.

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Customer & Collaborator

Groupon’s majority of customers are women who earn more than $50,000 annually. Over 80 percent of the customers have a college degree, and over half of the customers are in the 18-45-age range.

Almost 100 percent of the customers would return to the business, and 80 percent of the customers have referred friend to the business.

There have been over 500,000 merchants featured on Groupon, and the collaboration is the backbone of the site

(Get the Most Effective Local Advertising Available, n.d.).

Groupon works with the travel site Expedia to book discounted travel.

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External Analysis

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When Groupon first opened up for business they were in the forefront of their industry but since those days three huge competitors have come to shake things up with one being very surprising

Living Social and Amazon Local work very similar to the way Groupon operates and makes sales and the social media giant Facebook has also become a competitor.

Business opportunities Groupon has is they are already pairing with, or buying, many businesses that will increase its market share, and create a stronger customer base,

such as Ideeli (Lunden, 2014), a fashion site, and Ticket Monster, a Korean ecommerce company (Edwards, 2013).

A major business threat is the pairing of Living Social and Amazon. Amazon invested money into Living Social, but has not yet added Living Social to the Amazon website.

If Amazon decided to pair with Living Social, the end result could hurt Groupon enormously. Amazon has a vast customer base, and it could propel Living Social to

the level of Groupon

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Challenges

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One of Groupon’s biggest challenges is fixing its reputation after the initial disappointment of the IPO.

Groupon didn’t perform quite as well as expected, and due to many internal issues, the company needs to regroup and make sure its employees are happy.

Groupon has received criticism from small business owners because the businesses claim to lose money on Groupon deals, and will not run another Groupon campaign.

Groupon is running into issues with its expansion. Instead of growing slowly, and keeping its current customers happy, Groupon focused on finding new customers (Roberts, 2013).

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Solutions

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A national advertising campaign featuring a collection of businesses.

Commercials, print ads, and Internet advertising highlighting businesses across the country would restore the faith in Groupon.

Groupon would be advertising for its website, but also be advertising for the destinations and businesses

. This would be good for businesses, but also show consumers that Groupon still makes its pairing with businesses the top priority.

Giveaways are useful tools to get customers excited about the products and experiences, while showing the customers Groupon is loyal to them

Groupon can request submissions from customers nominating someone who’s deserving to go on a dream vacation.

The stories could be featured on commercials, and the vacation destinations would be businesses that have paired with Groupon. Groupon can follow up with the customers during and after the

vacation to show the winners enjoying themselves.

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With these solutions in place we will restore faith from our business clients and our customers which will in return give Groupon booming business and new customers and clients.

Of course these solutions will not be free and in order to get this company to where it needs to be the costs will reach close to 12 million but in due time it will pay off with profits being much higher than

initial costs for everything that has to be done.

With such bold moves from Groupon to get back the dominance they once had there could be a chance that competitors start doing their own campaigns calling us out and claiming why they believe

they are the better company and why customers should not go to Groupon.

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Costs

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$0

$2,500,000.00

$5,000,000.00

$7,500,000.00

$10,000,000.00

300,000 500,000

10,000,000

150,000 100,000Video Production Costs PR Agency National TV Coverage Cost Hiring Free Giveaways

Costs

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In Millions

Profit

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0 7.5 15 22.5 30

2014

2015

2016

In Millions

Profit

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March Have a meeting with Jacobs Agency on proposed campaign plan.

March-April

2014

Hire a point person to work with Jacobs Agency

May Hire regional spokesmen to communicate with small business

Start shooting national business campaign

June-December Air all recorded campaigns on all major networks

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2015

January Create a street team

February Have street team hit campuses promoting Groupon

March Have point person contact and set up a meeting with Jacobs Agency

April Start shooting and airing national customer sweepstakes

December Announce winners of the sweepstakes campaign

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2016

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March Start shooting and airing sweepstakes winner’s stories on national tv

May Start building physical Groupon offices around the country.

July Start forming partnerships with other big companies

October Start meetings and negation’s with competitor's to buy them out.

December Start partnership with company giant eBay

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References:Yahoo Finance. (2014, February 18). Groupon, inc. (grpn). Retrieved from http://finance.yahoo.com/q?s=GRPN

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Breadcrumbby Groupon. (n.d.). A Better Way to Accept Credit Cards. Retrieved February 6, 2014, from https://breadcrumb.groupon.com/payments

Carlson, N. (2013, August 9). New Groupon CEO: Morale Is 'Dramatically Better' Than It Was Under Andrew Mason. Business Insider. Retrieved February 9, 2014, from http://www.businessinsider.com/new-groupon-ceo-morale-is-dramatically-better-than-it-was- under-andrew-mason-2013-8

Cohan, P. (2012, August 20). Why Groupon Is Over and Facebook And Twitter Should Follow. Forbes. Retrieved February 9, 2014, from http://www.forbes.com/sites/petercohan/2012/08/20/why- groupon-is-over-and-facebook-and-twitter-should-follow/

Edwards, J. (2013, November 7). Groupon Whiffs On Earnings, Stock Crashes ... Then Stages An Amazing Comeback. Business Insider. Retrieved February 9, 2014, from http://www.businessinsider.com/groupon-q3-earnings-2013-10

Get the Most Effective Local Advertising Available. (n.d.). Benefits. Retrieved February 7, 2014, from https://www.grouponworks.com/benefits-of-advertising-with-groupon

Gilbert, J. (2011, November 4). Facebook, Google, Living Social: Groupon Competitors That Could Take Over. The Huffington Post. Retrieved February 9, 2014, from http://www.huffingtonpost.com/2011/11/04/facebook-google-living-social-groupon- competitors_n_1076964.html

Groupon. (2013). Groupon. Retrieved February 6, 2014, from http://www.groupon.com

Groupon Inc.. (2014, February 6). News. Retrieved February 6, 2014, from http://topics.nytimes.com/top/news/business/companies/groupon- i n c /index.html?offset=15&s=newest

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References Continued:Lunden, I. (2014). Groupon Moves Into Flash Fashion, Buys Ideeli For $43M In Cash. TechCrunch. Retrieved February 9, 2014, from http://techcrunch.com/

2014/01/13/groupon-moves-into-flash- fashion-buys-ideeli-for-43m-in-cash/

Novellino, T. (2013). Daily deals increasingly in dust as Groupon adds Freebies. Groupon adds store coupon feature Freebies. Retrieved February 9, 2014, from h t t p : / /upstart.bizjournals.com/companies/rebel-brands/2013/11/20/groupon-adds- online- ecommerce-coupons.html?page=all

Our Mission. (n.d.). Groupon Press. Retrieved February 4, 2014, from https://www.groupon.com/press/about-groupon

Paczkowski, J. (2013). Groupon CEO: “I Was Fired Today.”. AllThingsD. Retrieved February 9, 2014, from http://allthingsd.com/20130228/groupon-dumps-andrew-mason-as-ceo/

Pavlo, W. (2012, April 3). Groupon Accounting Scandal, and We're Surprised?. Forbes. Retrieved February 6, 2014, from http://www.forbes.com/sites/walterpavlo/2012/04/03/groupon- accounting-scandal-and-were-surprised/

Roberts, G. (2013, March 21). What You Need To Learn From Groupon's Unprofitable Business Model. Business Insider. Retrieved February 9, 2014, from h t t p : / /www.businessinsider.com/lesso-from-groupons-business-model-2013-Appendices

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