Net present Value, Mergers and acquisitions Abstract Main objective of undertaking this to report was learn about NPV present value (NPV) method to make capital budgeting decision(Google NEW Project) and success factors involved in mergers and acquisitions(Google-Groupon Case). Answers to the Assignments Part I: Google should go ahead with the new project. Part-II: Google’s acquisition of Groupon would have been win -win situation for both corporations Now I will discuss both parts in detail below. Part I: Capital Budgeting Capital budgeting is the process of making long-term planning decision relating to planning for capital assets as to whether or not money should be invested in the long term projects …show more content…
II - MERGERS AND ACQUISITIONS Assuming rationality from all players, mergers and acquisitions deals originate out of specific strategic corporate requirements. In reality, the advisors (both legal & financial) and middlemen also play a significant role in the original activity. Some of the best acquisition candidates are current business partners. They may be customers who work closely with the buyer to develop new products, or suppliers with whom the buyer has close, long term relationships. However, these targets generally imply either upstream or downstream acquisitions so that the buyer becomes more vertically integrated within its industry and should be a strategic decision by senior management acquirers / targets may focus on competitors for a potential acquisition/sell off. Buying competitor implies horizontal integration. Google-Groupon Case In 2010 there were rumors related to Groupon (online couple provider) being purchased by Google (technical search giant). Google offered around $6 Billion to buy Groupon (daily deals site). It would have been one of the biggest online acquisitions. Groupon became the quickest company to reach sales target of $1 billion. Groupon has done a marvelous work by linking local merchants to a giant e-commerce machine and then successfully delivering
Groupon recently made its billionth sale, solidifying it as one of the most well-known and highly regarded companies of its time. However, despite the fact that the company has spent a considerable amount of time in the spotlight and under the scrutiny of the public eye, there are still some things that many people don't know. With that in mind, here we present our list of things you probably didn't know about Groupon. Well, what are you waiting for? Check it out for yourself below!
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.
1. The net present value is the projects present value of inflows minus its cost. It shows us how much the project contributes to the shareholders wealth. The NPV of each franchise are:
Updating with time: Groupon keep on updating itself providing new deals every time hunting the right people and right merchandises.
With the internet technology, everyone can stay at home for online shopping. What’s more, if you can enjoy daily discounts with all the information, home delivery and 24-hours daily operation, that’s all can be found by buying Groupon. Groupon, the company has successfully captured millions of online consumers throughout the world. The marketing strategy of Groupon captures the consumer behavior. Consumer buying behavior, defined as... “The buying behavior of final consumers, individual and households who buy goods and services for personal”.Groupon consumers mainly responses to:
I believe that Groupon has become successful for many different reasons. First of all, Groupon was the first to transport the traditional “Coupon clipping” to the online world. This opened many opportunities. It was something new, exciting to consumers that they hadn´t seen in this way. So Groupon had a first mover advantage even though they only connected already existing ideas and technologies in a new way. By being online Groupon could reach many, possibly millions, of people at once. This was a strong argument when Groupon talked to local merchants. As most of these merchants did not have an extensive marketing budget and were not necessarily familiar with new
Groupon’s business model is much different than that of WalMart. WalMart is the largest retailer in the world consisting of physical store entities such as WalMart U.S., WalMart International, and Sam’s Club in addition to it e-commerce sites. Their business model has everything you can think of (shown in Exhibit A), from relations with their supplies to relations with their trade partners. WalMart maintains its mottos of “Always low prices” and “Save money, live better” by focusing a great deal on its suppliers. Because of the size of the company and its continuing needs, WalMart is able to negotiate immensely well with its suppliers to fulfill such a slogan. On the other hand, Groupon is not so much a physical entity as it focuses in the e-commerce industry. To put it in simple terms, Groupon is an online middleman offering discounts for local shops and restaurants. The business model entails Groupon offering discounts at such locations to its customers/subscribers on a
Groupon is a unique city guide that makes it easy for people to save some money when they are out and about. It has been in operation since 2009 and is among the most used sites in the UK.
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).
Groupon is an internet/app-based business. They provide goods, vouchers, and even vacations at a discounted rate. Groupon was launched in 2008 and the site was dedicated to advertising local businesses by offering deals for a limited time (Edelman, Jaffe, & Kominers. 2014). As a consumer you are able to discover businesses and merchandise in your local area, as well in other locations. They are still working on expanding their business, but currently you can find deals on things to eat, see, do, and buy in 47 countries (Groupon, Inc. (GRPN). 2016). The past five years they have steadily increased their sales/revenue with 3.19B in sales/revenue in 2014 (Groupon Inc. 2016).
Groupon is a "deal-of-the day" type of business that offers online discounted price products and services. It gives consumers around 20 to 70% discounted prices from household things, liesure and activities, and even vacation getaway plans. Groupon is an emerging company that was established in November 2008. The company is based in Delaware and incorporated into thousand eight. It is only six years old, but it already garnered $2.573 billion of revenue and 44.9 million consumers in 2013 (citation here). Because of its popularity and its basic concept of bargain prices that is offered to a diverse number of consumers, Groupon became an instant hit. Groupon is redefining the way we think of our local commerce. It offers discounted prices of popular brands and even products of local businesses around our city, which gives local businesses a boost in profit. Moreover, it gives local businesses a good marketing edge to get recognized in the community. Groupon acts as a third-party entity who sells vouchers that are
What we recommend is that, Groupon needs to separate its financial duties once the company go public on the stock market, it has to go out and make quarterly earnings meaning to say it will be transparent. Because one company has to go on transparent to the public as this plays a big role in the growth of the company, stock market where investors would want to decide whether to buy Groupon stock or not. Groupon as a middle person between it’s customer and the merchants who offers a deal. When all of these happens, the least thing that could occur is that the stock goes down and Groupon’s stock lost about 85% of its value which is really bad that it’s worth was a little more than $2 billion.
Groupon is an easy way to get huge discounts while discovering fun activities in your suit. Each day, it features a cool new experience and unbeatable price in dozens of cities across the country. From restaurants, theatres, spas, stores, special events. They work with the best local business to offer one deal each day at incredibly low price.
Groupon is an app that searches through more than 500 cities and brings you the bestdeals in many spheres of life like food, technology items, and apparel among other categories. It goes hunting down for vouchers, any entertainment deals, savings for particular restaurants, and discounts on fashion. This app is free.