Keurig Case Analysis

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.

Mr. Coffee is best known for pioneering and leading the market in the automatic drip coffeemakers. The brand was established in 1968 by Vincent Marotta and Samuel Glazer and was then part of the North American Systems, Inc.

Dutch Bros. Coffee objectives are to generate a steady stream of revenue through the business to Consumer (B2C) coffee services industry. The goal is achieved by maintaining a low cost to develop & maintain their business through small franchise establishments that service a massive volume of customers.

Starbucks has developed a brand image that has revolutionized coffee drinking experience. It has created an ambiance that is designed to attract customers and keep them coming back to Starbucks stores. It offers wide varieties of services such as comfortable seating areas with unique music and free wireless Internet for their customers while sipping their favorite coffee. This distinctiveness sets Starbucks apart from most of its competitors and has allowed the company to successfully grow and profit while charging premium prices for their products.

Due to the growing competition and diminishing market share, companies are opting for different strategies to achieve their survival objectives as well as growth. Companies are thus executing grand strategies to provide their businesses with a clear direction for its strategic actions. These strategies, therefore, aim at both short term and long term sustainability and growth, and they include innovation, market development, product development, and concentration.

Discuss the strategic decisions that firms in this sector may be facing. What future strategies can firms pursue to try to secure their competitive advantage and long term survival?

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 launch the Keurig-Cup in the at-home market and continue to use the K-Cup in the commercial market. The reasons of separating these two series are listed as follows:

In recent months many new single-serve coffee brewers have come to market in the United States. These new competitors are offering consumers many new choices and variations of a single-serve coffee brewers. In turn, this is stepping up pressure Keurig to keep up with its competitors and the markets demand. The three competitors that pose the biggest threat to Keurig are Bunn’s MyCafé unit, Starbucks’ Verismo unit, and the Esio beverage system which is backed by Wal-Mart.

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 &

Costa can only be as successful as the plan it implements. Saving the world from mediocre coffee and unsustainable practices are goals that must be attained.

Weaknesses: Dunkin’ Donuts considers themselves as a retailer, for that reason, they are not well-equipped to produce the bagels themselves. They rely on outsourcing- this can have its drawbacks as they become too dependant on suppliers.

With this being said they must find ways successfully spread out some the overheads costs that are in dire need of attention or raise more money. The VC’s are saying that they will not receive any more money until they have proven track of strong sales. A successful negotiation would help alleviate their economics burdens they are currently incurring this is why it is important so they do not end up in the worst situation where they cannot get money from the VC’s, angels investors or investments banks and have to go out of business. Keruig has 2 BATNA’s the first is they can each other try to find other roasters to contract with like Starbucks, Swiss Miss, Folgers or more regional companies like Van Houtte of Canada and Diedrich of South California. Their second BATNA was to revert back to the old plan and produce their own branded line True North Coffee. Under this plan they would have to raise a lot more capital from angels and private investors. This approach would come with a lot of obstacles such as higher costs, possibility of a lower valuation

Issues: our main issue is competition and this is why we should increase our marketing strategies to keep our brand image and to drive away