Keurig's Swot Analysis (2008)

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.

Strives to be the leader in micro brewing while maintaining the core values it started with and had employee buy in even before it went” 100 % employee owned in2013” (Gorski, 2013).

The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.

Keurig Green Mountain Coffee is a company dedicated to providing its customers with the best home beverage making technology as well as the best beverage brands and coffee around the world. They specialize in coffee, tea and coffeemakers. They have a variety of products and product lines that cater to the idea of customizing beverages for the end consumer. This dedication is one that has lasted just over 26 years. While the company initially went public in 1993, it has recently been bought up by JAB Holding Co. in an effort to push the company into a new era of success (Imbert) (Forbes). Keurig’s strong commitment towards environmentally sustainable programs, investment into innovation and strengthening the community’s around it make Keurig Green Mountain an exceptional company to analyze financially and potentially invest in (Forbes).

The key concepts behind k cups are controlled brewing and variety. The amount of finely ground coffee and tea inside the pods is portioned very precisely. Controlling how much premium coffee or tea is in the pod is a way of determining the taste of the final product. The k cups developed for a Keurig Coffee Maker are perfect for offices. Staff can choose from a wide selection of blends and types and flavors of coffee, teas, and hot cocoa. One pod is used to make one cup of coffee,

The Boston Beer Company is currently the largest craft beer company in the United States, however, the craft beer industry is growing in an otherwise shrinking market increasing the amount of serious competition that The Boston Beer Company is facing.

To calculate the optimal the Keurig-cup price, we first considered the data from Case Exhibit 7B, to determine the total percentage of consumers who are willing to purchase at each of the price points.

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

There are many sellers in the market heating up pricing competition. Competitors like McDonald’s, Dunkin Donuts, Peet’s Coffee and other specialty coffee companies incentivize price wars. Furthermore, coffee’s demand is elastic which makes it difficult to increase prices without greatly reducing the demand. This makes differentiation and positioning very important. Also, it is easy for customers to switch from coffee vendors. Whichever company is most convenient for the customer will likely win the business. Competition is a top priority in the industry.

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 &

People love to drink coffee. Coffee shops, independently owned or chains are every corner. Statistics show that people are taking more coffee every day. It is a very profitable business.

Keurig Inc has been founded on an amazing idea that coffee making systems that uses individual portion packs of freshly roasted and ground coffee with unique coffee maker designed to brew perfect cup of coffee at a time. At that time there are already established gourmet coffee houses like Starbucks, which is making coffee consumers to spend more money with an average of $ 1.50 or more for a cup of gourmet coffee. This change is consumer behavior created opportunity to Keurig to offer gourmet coffees by a single-cup in offices in 1998. Within a span of four years (1996-2000), Keurig have noticed sales increased by 40% in US at home coffee market. With these facts Keurig´s management got convinced, to develop an at home one-cup coffee brewer especially for gourmet coffee lovers.

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

Cameron’s Coffee was founded in 1978 by Jim Cameron and was later on purchased by Jim Kirkpatrick in 1999. The company specializes in ‘…premium flavored coffees, teas and powdered cocoa and cappuccino mixes (Petersen).’ Even though the coffee market is almost saturated, Cameron is looking to expand its operations not only in the United States, but in Europe and other continents. The company currently has a great advantage in this tight market, due to its dedication to quality. But in order to increase the probability for success, Cameron’s Coffee will need to expand its knowledge and involvement in technology and communication.

It is essential that Green Mountain’s negotiation succeed because the value proposition that comes along a new product like the portion pack system. Keurig is a start up coming looking to expand its business venture and GMCR central location is in the Northeast and they were also looking to expand the company’s geographic existence. With expansion ideas in mind as a common ground for both companies, it would be smart and beneficial for the companies to work towards this specific goal. Keurig would make it feasible for GMCR to sell the K-cups it will eventually produce in parts of the country they are not already connected to once the Keurig goes national. There is major room for them to grow and to be