Keurig’s strategy continues to be differentiation. The company has managed to outperform its competitors by offering high-quality single-cup coffee brewers and a wide variety of coffee portion packs called K-Cups. Users of Keurig brewers can enjoy a cup of great tasting coffee, tea or hot cocoa every time. The cup of coffee is brewed in less than a minute, there is no need to grind coffee or use filters, and cleaning up is as easy as it gets. Keurig brewers use coffee portion packs called K-Cups. There are over 200 different blends and flavors available from 13 brands, including Newman’s Own, Tully’s, Celestial Seasonings, Bigelow, Emeril’s, and Caribou.
Keurig is the leading single-cup brewing system in the at-home market, with 82…show more content…
The additional revenue generated by the additional sale of K-Cups would offset the losses incurred by lowering the prices of the brewers. Another opportunity that Keurig could take advantage of is to license additional coffee roasting companies to package their products in K-Cups. Keurig’s revenues would increase as a result of the increased royalties paid by the licensed roasters, and the increase in variety may motivate more coffee consumers to purchase a Keurig single-cup brewer. Additionally, Keurig could seek to increase the number of office coffee system distributors that distribute Keurig’s products. Lastly, Keurig could effectively publicize its involvement with socially and environmentally responsible causes in order to improve brand image and increase brand awareness.
The most obvious threat right now is the difficult consumer economy that may lead consumers to cut back on their spending causing a decrease in demand for Keurig’s premium-priced products. The price fluctuations of coffee represent another threat to Keurig’s competitiveness. In May 2008, Green Mountain Coffee implemented its first prices increase since 2005. The 8 to 12 percent increase on coffee products was the result of several factors, including a sharp escalation in the price of green coffee, increases in other raw materials, and higher energy and fuel costs. Keurig