Keurig

Suppliers such as Starbucks and Dunkin Donuts are marquee names in the coffee business. The brands are powerful and offer significant value to the Keurig product line. GMCR must continue to build similar relationships and retain them for the long term. These strong brand names not only offer a new target customer they also reaffirm Keurig positioning as premium product. The bargaining power of these suppliers will vary based on size and brand. GMCR must determine its power when negotiating future deals with such suppliers, in cases like Starbucks, GMCR should be willing to give more (accept lower royalty) to continue building the brand.

A recent primary research survey has found that 70% of occasional coffee drinkers view the Mr. Coffee brand as an inferior or budget coffee brewing device that does not make a superior cup of coffee (Appendix, Opinion survey). Brands such as Keurig, Cuisinart, and DeLonghi inspire more thoughts of quality coffee than Mr. Coffee. Other consumers are opting to spend several dollars per cup of coffee at coffee houses such as Starbucks, Caribou Coffee, Dunkin Donuts, and even McDonalds (Appendix, Opinion survey).

While the leading drinks in 2004 were espresso-based beverages with sales averaging $50,395 per store, drip-brewed coffee beverages – which Expresso Espresso does not offer – came in second at $33,336 per store. It is understandable that Todd insists on providing quality products, but refusing to add drip-coffee beverages to his menu is the equivalent of refusing to cater to his customers’ needs. Unlike any of the local competitors, Expresso Espresso and the eventual Starbucks are the only Mobile coffee shops that offer a drive-through service. The drive-through contributes to 40 percent of Expresso Espresso’s total revenues, so needless to say, it’s a very important contributor to the business. If Todd hopes to stand a chance against Starbucks, his biggest competition, he will need to add drip-coffee beverages to his menu. Otherwise, it will be just as easy for a customer to drive off 400 feet east to Starbucks and request a drip coffee there instead.

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!

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.

Keurig should insist on their plan to launch the new Keurig-Cup even if the GMCR holds the opposite view since it can protect the profits of KAD and roasters when new products are introduced to the market. If Keurig differentiates the at-home market from office market, the previous office brewer users could not go to the direct commercial channel to purchase K-Cups at a lower price (if the at-home used Cups is cheaper). It won’t cause the customer loss of OCS

In October Bunn, a leading commercial beverage equipment producer, launched its home version of its single-serve coffee machine called MyCafé. Unfortunately for Keurig, the MyCafé is the first to capitalize on the expiration of Keurig’s patent on

Green Mountain Coffee Roasters, Inc. (GMCR) was founded in 1981 as a small café and combined with Keurig in 2006 (About GMCR, 2004-2009). GMCR produces specialty coffee and coffee makers; Keurig is the maker of a single cup coffee maker as well as specialty teas and coffees. Keurig was founded in 1998 on the concept that one should be able to make coffee one cup at a time rather than one pot at a time (Coffee.org, unknown). Today, GMCR has acquired and merged with several specialty coffee brewers and Keurig

The successful market of Starbucks and other successful coffee houses has made it okay to spend $1.50 or more for a good quality coffee and even more for specialty drinks. Considering the trend in successful coffee houses and the cost of the drinks, it opened the door for Keurig to produce high quality low maintenance units for the home and office. Keurig conducted multiple market research polls to reach its price points, ensuring that once units are released they are something that customers will buy without hesitation. Price points were anywhere in the range of $199 to $299 (Cravens &

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 should probably refrain from undercutting KAD by offering lower priced coffee; since currently KAD offer coffee cups for $0.40-$0.50, pricing slightly above that range will avoid the undercutting

willing to pay $0.50 or more for a K-cup. By pricing the K-cup for $0.50,which is similar to Kcups in the OCS market, KADs will not lose revenue from their segment. Premium flavor cups for

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

One of the most noticeable features about the City of Seattle is the incredible amount of coffee shops in the area; so it’s not very surprising that one of the most recognizable coffee companies in the world hails from Downtown Seattle. Starbucks has been in business since 1971 and has grown from a single coffee shop to one of the largest and most recognizable food companies in America. One of the things that fostered this explosive growth was the company’s willingness to adapt with a changing world. With technology advancing in leaps and bounds, Starbucks has found ways to utilize it in order to further themselves as a business; their strategy worked. This paper will answer three questions to demonstrate how Starbucks has successfully used Information Systems (IS) to grow themselves into the company they are today. The correct understanding, implementation, and management of IS has allowed Starbucks to rise to the top of their industry and distinguish themselves from other businesses.

One of the biggest barriers from GMCR’s standpoint is that they realize they can possible build up sales and marketing for the Keurig system once they start producing and endorsing the product. They are capable of doing so because of the position that GMCR is in as an emerging