GROUPON, INC.
STRATEGIC AUDIT

Aaron Boone
Kathryn Dennis
Nicolas Givens
Wei Wei Kong
Danielle Rittenhouse

December, 2 2014
Time Table
In 2006, Andrew Mason was unhappy with a cell phone contract.
Created company called “ThePoint”, designed to be a tool for raising money for various causes.
ThePoint lacked was too broad to achieve success, but had potential.
Kept the same focus of consumers feeling like they had the buying power
Began recruiting merchant to offer discount in online dealer centered on the tipping point.
In deals that tipped(when enough coupons were purchased) consumers saved money
Merchants benefits both large scale sales and market exposure
Concept grew into daily deals service that relied on the power of groups, Groupon
Launched first deal October 2008.
Worth over US$1 billion just after 16 months in business
By 2010, Groupon served over 150 markets in North America, 100 in Europe, Asia and South America

I. Current Situation
Current Performance
Dec 31, 2013 gross profit 1,501,533 (Yahoo Finance)
Number one in market share 37 out of 48 countries 2012 (11-15)
North America held 53% of the market share in second quarter of 2012 (11-15)
Profit margin -5.38% as of 9/30/14 (Yahoo Finance)
Market value 5.09 Billion November 2014 (Yahoo Finance)

Strategic Posture
1 Mission: To become the operating system for local commerce so they can serve as entry point for local transactions
2 Objective: to become an essential part of everyday local commerce for consumers and merchants.
Consistent, both focused on local transactions for both consumers and merchants
3 Strategies: Grow subscriber and customer base
Investments in marketing initiatives such as search engine marketing, display advertisements, referral programs and affiliate marketing
Grow number of Merchant partners
Investment in sales force, building merchant partner relationships and local expertise
Targeted placement of merchant deals to subscriber base, high quality customer service, and tools to manage deal effectively
Routinely solicited feedback from merchant partners
Position Groupon to benefit from technological changes that may affect consumer behavior
Invested heavily in technology, including through acquisitions
Increase the number and variety of products through innovation
Launched variety of new products in 2011
Groupon would be used as discovery tool for local merchant partners and ongoing connection to favorite merchants
Expand with Acquisitions and business development partners
Recently Groupon’s focused to acquire businesses with technology and technology talent that could help them expand
Entered agreements with local partners to expand international presence
Entered affiliate programs with companies such as Ebay, Microsft, Yahoo, and Zynga

Information Systems
Employ technology to1 improve experience offered to subscribers and merchants increase rate for customers to purchase a Groupon product or service enhance efficiency of business operations
Component of strategy to continue developing and refining technology
Database platform enhances communication provides management and merchants to track performance and analytics
Platform tracks internal workflow applications and infrastructure serve content at scale dashboards and reporting tools to display operating and financial metrics for historical and ongoing deals publishing and purchasing system for customers
Platforms provide antivirus, firewall technologies to protect systems located in data center2
Invested in intrusion detection and pattern detection tools3
Engaged in third party internet security provider for website and identity vulnerabilities 1
Use Secure socket layer to provide encryption in transferring data4
Spends heavily to scale computing and network infrastructure and prevent counterfeit coupons
Information systems hosted data centers in US, Asia and Europe

II. External Environment: Opportunities and Threats (SWOT)
(EFAS See Exhibit 1)

A. Societal Environment

a)