Net Present Value, Mergers and Acquisitions

Financial Management is an important aspect of how a business operates efficiently. The way that the finances are controlled can determine how successful the company is. The finances of a business allows for the growth of the company. The five practices of financial management: capital structure decision, investment appraisal techniques, dividend policy, working capital management and financial performance assessment are critical when assessing a company. The performance of a company plays a key role on how successful the company is on meeting goals. There are different strategies and tools that a company can implement and if they are used to effectively the company can meet their goals. If a company has good finances, a good

Yet what separates Google from Groupon at that time is that there is a difference between controlled freedom and freedom. Even if there is a freedom in the workplace, boundaries need to be set in order for employee to act freely upon those limits. Another negative aspect of the whole Groupon organization problem was there immense amount of personal.

Groupon is a deal based business that brings customers discounted deals from the businesses. As a result of massive success and the growing competition, the business is faced with the option of either selling to Google or developing an effective marketing strategy for continuing its own. In the due context, the underlying report proposes a marketing plan for successfully dealing with the market challenges (Chatterjee, O”Keeffe, and Streiff, 2012).

However, a stock drop in the U.S. market is not historically unusual for impending mergers. So, all things considered, it looked like this might be a great combination.

Groupon is an internet website company focused on generating revenue by utilizing relationships with merchants to provide consumers with discounts on select items. The goal of the discounted vouchers is to drive additional consumer store traffic and generate revenue for merchants which are shared with Groupon via a predetermined contractual percentage. Groupon generates visibility and exposure with email and social networking to increase consumer spending at specific merchants. Groupon has many features from personalization of product offerings to specific demographics and target segments. In addition, a more defined value proposition allowing merchants an opportunity to showcase their own product offerings on

Groupon has been called the fastest growing company in history. The idea of offering real discounts to people in local markets, providing signature daily deals and exposing people to new products and services at deeply discounted rates has attracted a groundswell of consumer support and influenced other companies to start similar businesses.

Before Groupon was invested, there was company named The Point that was founded by Andrew Mason and it showed poorly which led failure. The purpose for The Point was to improve the online fundraising experience for businesses’ website but people were hesitant to contribute money to causes if they didn’t think the money would make a difference for the company but it failed due to not enough traffic into their website.

Groupon is a real deal industry that operates within the Electronic commerce also referred to as e-commerce is a module of business that employs computer networks, namely the internet to trade and to sell and buy. At its essence it is an industry that uses technology and the internet to conduct business. Moreover, the e-commerce industry may employ online shopping where customers can use internet access to shop and trade between businesses or between customers and businesses. Groupon is a geographically diversified publicly traded company that operates based off of the ecommerce sale of the day model. This industry business model caters to customers shopping for deals and employs the means of using marketing, and cost saving strategies to entice potential clients by offering discounted coupons to potential clients for savings at various groups. There are discretionary concerns that are notably present for companies that operate in this industry, namely the fact that in a weak economic environment people are less likely to spend money on memberships at clubs and eating out at premier places.

Groupon is valued at 5 billion dollars. It makes money through deals with businesses individually. Groupon doesn’t make money until users access their website and use the coupons at the stores. This is as Groupon states, “we don’t make money until you make money”. Groupon ranges in profit from deals as for each deal they reach an agreement, they make from $2000 on the lower ends, to even $45000. We cannot be charging businesses as much as Groupon is because we are a new start up to this industry. We have to gather a set user base followed by deals that businesses will want to accept as we are a small start-up trying to attack the bigger

with today’s business world. As it was very hard for Groupon to enter foreign markets,

Groupon is a deal-of-the-day website that is localized to major geographic markets worldwide. Launched in November 2008, the first market for Groupon was Chicago, followed soon thereafter by Boston, New York City, and Toronto. Groupon has over 50 million subscribers across 300 cities in more than 40 countries. The idea for Groupon was created by Andrew Mason who is currently the company’s CEO. [update]Groupon serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 60 million registered users. The growth in the future is likely to be at a slower pace, primarily because the company is already one of the largest in the local deals space.

In my opinion Groupon is not a ready-to-go solution to the problem of low marketing budgets of many local merchants. If Groupon is good

Following table shows the possible values of value per share as affected by different annual and long term growth rates.

However, by nature, customer priority on great deals only and unlikely in the future to purchase at higher retail prices. In the run long, the mechant come and go without continue offering they products / services to Groupon’s customers.

The Net Present Value is one of the techniques that are used by firms when evaluating which investment proposals to take on board and which ones to reject. The net present value is calculated by discounting all flows to the present and subtracting the present value of all inflows.