A Case Study- of Green Mountain Inc. Essay

600 Words 3 Pages
I. Problems

A. Decreasing Sales

Over the past several years, Green Mountain's sales growth has decreased. In 1998, net revenues totaled at 55.8 million dollars. There was an increase in sales over the following years. In 2002, revenue increased by a mere 4.6%.There are several flaws and problems in the company that may decrease revenue sales.

B. Competition

There are six major competitors: Gevalia, Illy Café, Millstone, Peet's Coffee and Tea, Seattle's Best and Starbucks. Starbucks seems to have a strong share in the available market. Starbucks is highly aggressive in the retail market and will have an enormous impact on future sales and profit of Green Mountain Coffee. Starbucks is already the leading retailer,
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These substitutes are decreasing our potential market share.

There is also a trend towards whole bean specialty coffee. During the 1990's, the ground coffee industry was stagnant; slowly declining sales. On the other hand, the whole bean market has grown by 8% annually since 1990. A survey suggests that 36% of coffee drinkers purchased whole bean coffee because they believed that roasting at home would give a fresher, better taste.

Another factor decreasing our market share is the international market. Although we are increasing in every market domestically, our international market has greatly decreased by 26.6% during 2001 to 2002. Our decrease is equal to a full-year percentage of sales of 2001- 2002 in Southern New England. (MA, CT, RI).

Green Mountain also faces several problems because it is simply a wholesaler. Starbucks coffee is a familiar name to customers with a reputation, which precedes its name. Green Mountain simply does not because of our limitations of being a wholesaler. Green Mountain made a decision to close all their locations because of flat sales and a lease problem. The retail locations are important because they are a vehicle for consumers to sample Green Mountain coffee. Starbucks' retail locations help customers familiarize with its products.

III. Recommendations

The only way sure way to increase our sales is to increase our client base. We currently provide coffee to
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