Keurig Green Mountain And Its Operations

Green Mountain Coffee Roaster’s Keurig Single Brew system is dominating the U.S. market with an overwhelming market share. Analysts expect sales of single-cup brewing systems to continue to grow in the U.S. and competitors are eyeing a piece of the pie. An analysis of Keurig’s current position, based on Michael E. Porters 5-Forces, highlights a number of key areas of opportunity and risk for the company. Handled correctly, the Keurig product line should continue its growth, however, a number of significant pitfalls threaten its dominance.

In the open market share repurchase, the firm may or may not declare the repurchase. Depending on the market condition and the firm’s position in the industry, the firm can decide when and how many

The alluring aroma of freshly brewed java is both tantalizing and calming to the senses, so much so, that most individuals are unable to fathom a morning or a day without a cup of fragrant, hot coffee in hand. Coffee is one of life’s little indulgences that have become a necessity for some, who find it increasing difficult to live without, as a result, Keurig created an innovative, and unique form of preparation. The Keurig machine makes it possible for a single serving of coffee, tea, hot chocolate, or water without the need to clean the machine in between its use. It eliminates the “stale-tasting” waste that results from the remnants of old coffee, which no coffee drinker desires, and it eradicates the need to clean the pot or brew basket, all this in less than a minute!

Keurig has been successful in selling its coffee brewing system to the office coffee segment (OCS) of the US market. This success led its leaders to ponder entering the consumer market. While making the move might seem like a reasonable next step in the development of the company core business, it also presents unique challenges.

Starbucks shares have gone up and down during the past 3 weeks. “The results, announced after markets closed, sent Starbucks shares down 3.5% in after-hours trading.”(Weise,E) I bought 100 stocks from Starbucks; it first started off at 55.37 and increased to 56.31. I expected for Starbucks performance to be the best, but its stocks are unreliable. Their percentage week change fluctuates. When I initially started doing research on Starbucks the week percentage was at -1.02% and has reach to 2.41%, but later went down to .66%. Their stocks have been unsteady and their weakness is that the prices of their coffee is expensive. “By contrast, a year of drinking at Starbucks, based on two $2 cups a day, will run more than $1,400--not including any snacks

Although the company is known for their coffee, they also drive a great portion of their revenue from baked good sales, which differs greatly from the Keurig Green Mountain strategy. Dunkin does compete against Dunkin intensely in the New England market, as both companies were founded and based in the area.

The Keurig coffee brewer is the leader in the retail market for single serves coffee brewers but it can do better. Keurig has been slowly losing some of its share of the retail market in recent years. In 2011 Keurig controlled 54 percent of the market which is down from its 2010 number of 60 percent and 2009 number of 63 percent (Geller). Keurig needs to take its product and it has to offer and enter into new markets and segments. It mainly needs to focus on the younger and lower income level of its

They have focused on building brand recognition and profitability by growing the business gaining assets to grow the company and products for greater customer satisfaction (About GMCR, 2004-2009). GMCR’s strategy to incorporate current large brands, such as Tully’s, Diedrich, and Keurig has helped to expand their customer base and satisfaction as well as the markets for their products (Phillips, 2011). Their focus on increasing their market shares in other companies will facilitate their expansion into new geographical markets and promote the brand. GMCR’s partnership with Keurig creates a larger consumer choice and the addition of agreements to create portion packs for the Keurig with companies such as Starbucks, Dunkin Donuts, and Newman’s Own helps set them apart from the competition (Invest in the Markets, 2011).

Company G is one of the top three small appliance and electronics companies in North America. Company G has decided to venture into the beverage category with state of the art coffee brewers to reach its profit potential and achieve customer demand. The new Doppio (pronounced dope-yo) Caffe Brewing System will shake up the Company because of its unique design and the high quality of the materials built right here in the USA. We believe the Doppio Caffe will be superior to any brewing system in the marketplace.

When looking at the 2004 DuPont analysis, you see that not only has profit margin increased every year, but it is more than 2% better than the industry average. That being said, Krispy Kreme does not utilize its assets as efficiently as its competitors. This potentially troubling because of the fact that they have gone through aggressive growth in stores recently. Is this an indication that these stores are not generating the sales necessary to justify the investment, or at least as well as its competitors might be able to? Finally the equity multiplier comes in below the industry average. To us this means that Krispy Kreme does not utilize its leverage as effectively as the competition. Perhaps it would be to Krispy Kreme’s benefit to increase leverage and invest in order to increase growth and earnings in a similar manner to its competition. Overall, we believe that Krispy Kreme is moderately

Keurig changed its owner structure in 2002. They made agreements with two of its roasters partners that are Van Houtte and GMCR, both acquired 70% stake in the company. Keurig’s single portion system is dependent entirely on the three key elements. a coffee brewer that perfectly controlled the amount, temperature and pressure of water to provide a consistency superior tasting cup of coffee. Crucial differentiation for

Keurig Inc.’s main concern is how to obtain the position they want in the at-home coffee market

First, a large share repurchase will significantly increase shareholders’ percentage ownership of BKI. BKI has been under levered for decades. The company acquisitions of several small manufacturers made shareholders’ equity be diluted even more. In other words, shareholders, especially the main shareholders in Blaine’s board, are paying for BKI’s over-liquidity. This share repurchase will not only give the board more flexibility to allot dividends, but will lead to a stable development of BKI’s business in the long run.

The coffee company has capitalized on the new found popularity of specialty coffee with its addition of coffee bars globally. Starbucks Common Stock increased from $3.31 per share in 1994 to $10.00 per share by the mid 1990’s. Despite the success of Starbucks, the company is

Firstly, it has shown significant growth year-on-year reflected in the 9% growth in EBITDA. It is a large, international company that is continuingly seeking to expand its operations, both in Europe and in the Americas. . It has acquired several acquisitions and has a continuing strong performance in South America. Its recent achievement of a corporate credit profile demonstrates its ability to pay its debt, reflecting a lower risk to investors. The large dividend that is paid to shareholders would also be evidence of a good investment, and the increase in dividend payout ratio demonstrates SKG’s strong dividend policy. Investors would be interested in SKG’s P/E ratio which calculates the company’s value on the stock market relative to its earnings. SKG’s P/E ratio increased from 6.47 in 2012 to 13.8 in 2013. The fact that the P/E ratio more than doubled in a year would show investors that the business is performing extremely well. Lastly, SKG refinanced its €1.375 billion Senior Credit Facility at significantly reduced rates, which is extremely important for investors as a less leveraged company is less likely to come under pressure from a