Introduction:-
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´s started approaching
…show more content…
Increased inventory for roasters.
Keurig-Cups are not available for customers in retail stores because retail sectors have lack of demonstration.
Sale of brewer and Keurig cup in retail outlets are affected because of lack of resources Keurig has.
Opportunities Threats
Continued growth in OCS market and more available resources for expanding distribution of at-home market into the retail sector. In future never there will be fall of brewing prices and due to this
Brewer pricing does not decrease and due to this reason opposition starts with lower pricing strategy and Keurig suffers large losses in future.
One-cup Approach with Brewer
Strengths Weakness
Keurig Inc can easily enter into at home market before competition.
Customer confusion will be decreased.
Here after roasters not needed to keep two different cup inventories like one inventory for OCS market and one for at-home market.
Most likely Roasters´ production levels will be increase due to the increase in demand of at-home market including KADs and at-home
Click here to unlock this and over one million essays
Show MoreThe larger serving size of Great Cups of Coffee is perhaps the most apparent gage that will improve appeal for the company’s customers. Receiving extra of a proportionately quality product for a comparable price obviously works as an enticement for customers to prefer Great Cups more than the opposition. While customers identify with a better quality and superior taste with fresher coffee, Great Cups supports its effective model of serving coffee that has been roasted no more 72 hours ago and that is blended and ground right at the store. Great Cups also provides as an unintended marketing method community bulletin boards and assists with book club gatherings as well as
Geoff Herzog is the product manager for coffee development at Kraft Foods Canada. After reviewing successful results of single-serve coffee pod systems, he wondered whether it would be successful in other areas. It was July 6, 2004, and Herzog had just learned that Kraft Foods North America was planning an aggressive launch of coffee pods in the United States. He then had only a month to decide whether or not the company should proceed with a simultaneous launch in Canada, or await the U.S. results.
The founders of Keurig Inc. created the company to develop an innovative technique which allows customers to brew one perfect cup of gourmet coffee at a time. In this case, the CEO Nick Lazaris along with the other leaders of Keurig Inc. must determine how to successfully enter the at-home-market for use at customers’ homes, while maintaining a healthy relationship with Green Mountain Coffee Roasters, Inc. (GMCR) and Van Houtte. GMCR and Van Houtte are two of the company’s main roaster partners that own a 70% stake in Keurig, so they want the business to succeed but are a little apprehensive about the company’s marketing and pricing strategies.
The scope of this report is an evaluation of the profitability of each brand. The report does not intend to make recommendations of how invest and promote new products and how to increase brewing capacity.
When attempting to define a well-conceived strategy, one must be fully aware of both the strengths and weaknesses that one inherently possesses within the market. When speaking of the Lagunitas Brewing Company, we see a company of profound strength as well as possessing several weaknesses that act as hazardous liabilities. Perhaps the first example of a weakness is a continued lack of foresight, demonstrated through inaccurate projections for their business regarding hitting maximum capacity. Following the purchase of an 80-barrel brew house which was expected to put off hitting maximum capacity for ten years, it was found that only two years later LBC was forced to purchase a 250-barrel automated brew house to meet demand. While this reactionary approach is a weakness, we cannot forget LBC’s first strength in having amassed a considerable net-profit since the acquisition of the second brew house, nearly tripling net 2009’s net profit of $563,000 to 2010’s of $1,500,000.
Another consumer trend that could support the potential success of the Kold machine is the relationship it will have with other well known brands such as Coca-Cola. Consumers are likely to purchase products they already know, and the Coca-Cola brand is very well known throughout the world. Some factors from the external marketing environment that could hinder the success of the Kold machine is competition and social/cultural forces. The Kold machine will face its strongest competitor in SodaStream, which already has been available for quite some time. Even though Mr. Kelly (Keurig'c CEO) mentioned having surpassed competitors in the past this might be a different scenario. SodaStream might have already took most of the market away as analysts are stating it will be more expensive buying Kold pods than buying a can or bottle at the grocery store. These statements will most likely not help growth the industry as much as Mr. Kelly things. Another factor that could hinder the success of the Kold machine is the social and cultural
Expanding convenience stores allows consumers to purchase their daily groceries when on their way home after work or af...
Our primary argument is simple, the cost of internal funds and the demand for external financing vary because of possible investment costs and the external financing costs. The effect and relationship of these two factors are paramount in making an educated decision. Keurig Green Mountain would be prudent to consider the debt-to-equity ratio, total long-term liability ratio, and cash flow to determine if they can service an expansion. According to Almeida & Campello (2008) Keurig Green Mountain needs to explore three specific areas to determine the best route: The opportunity costs, constraints of current investments on credit, and the high costs that may exist for external financing. Figures 6 through 8 show the different options for Keurig Green Mountain whether they issue a bond, commercial paper, or via a traditional loan. JAB Holding Company recently purchased Keurig Green Mountain, and this places them in a stronger position to consider a merger or acquisition themselves. J.M. Smucker is slightly larger, and they own distribution rights to Dunkin Donuts, Folgers, and Millstone. A merger could present a promising opportunity to gain market share, but would be a different strategy for expanding operations and would have a different
There are a few risks facing the company. One of which Starbucks is already attacking and trying to overcome. The expansion of Starbucks is coinciding with one of the worst economic surges in history. It has become unaffordable for the average person to go to Starbucks for a coffee seeing that a coffee costs as much as a gallon of gas. If you drink one coffee a day for a week, that’s almost a tank of gas! This is why Starbucks is now offering a less expensive cup of coffee with a completely different label and all.
They are financially sound, with relatively low debt. They are able to open a store in an impressive 16 weeks, and can recoup the initial investment in 3 years.
Increasing competition from large and small doughnuts chains. Krispy Kreme market share erodes slightly in highly competitive markets.
In the United States, coffee is the second largest import (Roosevelt, 2004). Furthermore, the United States, consumes one-fifth of all the worlds¡¦ coffee (Global Exchange, 2004). The present industry is expanding. It is estimated that North America¡¦s sector will reach saturation levels within 5 year (Datamonitor. n.d.). According to National Coffee Association (NCA), 8 out of 10 Americans consume coffee. In addition, it is estimated that half of the American population drinks coffee daily. The international market remains highly competitive. It is estimated that 3,300 cups of coffee are consumed every second of the day worldwide (Ecomall, n.d.). The latest trends included dual drinkers, an increase in senior citizens...
Caf? Expresso, as the first mover in the coffeehouse marketplace, which has expanded quickly and become one of the ?big three? players in the global coffee shops chain. However, recently this company is continuously facing a lot of problems in terms of its staff, easy-copied business model and product range, resulting this company lost its leading position to the number three. Therefore, its adjusted visionary goal is ?return Caf? Expresso to the number one position in the marketplace? (Beardwell, 2010). To achieve this goal, Caf? Expresso identifies ?the coffee drinking experience? is significant to achieve competitive advantage and customer value-added, which was delivered through three key elements (graph 1),
The threats facing Starbucks include trademark infringements and increased competition from local cafes and specialization of other coffeehouse chains, and the saturation of the markets in developed economies, and supply disruptions. Furthermore, the increasing prices of its inputs such as dairy products and coffee beans pose a threat
The more complex cappuccino and latte are harder to master. The more elements involved, the more likely different elements can go wrong. With the spate of chi-chi coffee houses and euro-restaurants, lattes are more popular than ever in the U.S. Every coffee shop and restaurant thinks it can serve a latte. I've even seen coffee stands in drugstores. Unfortunately, these sources rarely have coffee worth drinking.