PROBLEM SOLVING APPLICATION CASE (PSAC), Redeeming Groupon oric bumpy rise of Groupon high at decision making and creativity. For thische wewe best Groupon's earliest days. Ito and including PO under leadership of its first CEO and cofound Andrew Mason No one doubts Mason was creative, or that he was wess decision maker Let's start with the main Coupon marketing by leveraging social media. The potential of the idea was huge There was always a sense that Groupon had a lot of good deas but no real focus. Benchmark Capital o d of this period Moson ishe type of guy who comes up with wild ideas that often have no beginning or end and then let them wrote Vanity Faina 2011 pro Finding out where they land is part of the report an even larger neto (The drop in revenue resulted from the company having to pay higher refunds to merchants than had been stated Slower growth. Athough In 2002 year as a public company. Groupon's revenue increased 45 percent. this is nowhere the explosive growth that Initially made it a Wall Street dan Revenues had Increased ve fold in 2011 and 22 fold in 2010) While Groupon was riding Ngh, Mason's shortcomings were overlooked. But lation plummeted business wit ers became more critical Here's Adam Hartung in Forbes CEO Andrew Maison deserves a lot of credit for building the sales machine that outperformed everyone else including Google and Amazon But the other side of his performance was complete experience in how to man age finances, operations or any other part of a large publicly traded corporation. Un professional analyst presentations, executive Dumovec disrespectful comments to investors and chronic roofbleness all were accept able and only the kept up that torrid growth ca. 10 You may ready know that Maison lost his position in Feb ruary 2013. But for the sake of developing your problem solving skills, we will be asking you to analyze Groupon's situation up to that point and to consider the steps thana change in ledershia Examples of Business Issues and Lack of Focus The same brashness that let Groupon cut deals in ways that were out of the ordinary may have blinded the company to the need for mundane business agence. Ben Edelman assed ate professor of business Administration at Harvard Business School said that management had very patience... Groupon was not hesitant to jump into these businesses be fore they had figured out the important details that may have deterred others from jumping in Edelman said During Groupon's rise, many business critics were won ried that it was growing too fast, working in areas where it lacked expertise, overspending on marketing and starlev els, and always running losses IPO as Turning Point Such issues came to the fore before and after Groupon's IPO, its successful November IPO, thanks to higher levels of transparency and heightened scrutiny Before getting to the IPO stage, the seas were choppy Problems included: Multiple disagreements about the offering price. Major issues with financial statements requiring multiple flings and corrections Ongoing complaints from merchants about the value they received from the service given its cost Following the IPO, more chop followed the initial eupho m. Over the next year, Groupon saw valuation pop as high as over $27 and then drop as low as $250 a share. Among its problems Accounting in March of 2012, the company blamed an internal weakness" in its controls and had to Apply the 3-Stop Problem Solving Approach to OB Stop 1: What is the problem? . Use the integrative Framework for Understanding and Applying to help identify the outcomes that are Important in this case . Which of these outcomes are not being achieved in the case? . Based on considering the above two questions, what is the most important problem in this case? Stop 2: Use the Integrative Framework to help identify the OB concepts or theories that help you to understand the problem in this case What person factors are most relevant? . What environmental characteristics are most important to conside? Do you need to consider any processes? Which ones? . What concepts or theories discussed in this chapter are most relevant for solving the key problem in this case? Decision Making and Creaty CHAPTER 11 Stop 3: What are your recommendations for solving the problem? Review the material in the chapter that most pertains to your proposed solution and look for practical recommendations. Use any past OB knowledge or experience to generate recommendations. Outline your plan for solving the problem in this case