Green Mountain Coffee Roaster and Keurig have teamed up together to provide consumers the freshly roasted coffee of Starbucks in an easy to use one pack Keurig coffee. The company Green Mountain Coffee Roaster started in Vermont and currently employees about 5,800 people. After the acquiring of Keurig Green Mountain the company has reported the working of three major operating systems known as the specialty coffee business, the Keurig coffee business, and the Canadian coffee business, these forms of business have helped evolve the firm into the super coffee giant it is today.
The forms of business that Green Mountain has incorporated allows for brewing at home and away from home and involves not just coffee but other forms of beverages including hot chocolate. With the current fiscal year ending Green Mountain has reported sales of $3,859. 2 million dollars. This report shows the increase in earnings just within the business segment, showing a profit of 46 percent compared to the previous years earnings.
Strong company imagine with a loyal customer base.
Flexibility with Keurig coffee single servings and units being sold. An Established name brand. Strategic partnerships with other coffee brands and beverages to provide an array of options.
Only one source of manufacturer located in China. High level of dependence on certain retailers in order to provide certain beverages to their consumers.
Ability to partner with new vendors in order to increase profitability. With Keurig units being sold new types of beverages open the doors to future Keurig single servings to be sold.
Higher competition of coffee shops such as Dunkin Donuts who also offer a take home coffee blend. High competition with other coffee makers including instantaneous coffee. High cost of Keurig Unit and single serving cups. Impact of the economy on Keurig considered a luxury compared to more affordable options.
Taking a look at the business model that Green Mountain offers, their main consumer base that have bought Keurig units allow them to use the K-cups single servings for different kinds of coffee blends. The Company also has the advantage that more than half of the adults in the U. S and Canada drink coffee; however the dependency on specialty coffee and the cost of Keurig could post a problem depending on the recovery of the economy and the cost of the K-cups.
Lastly the risk of new completion such as current coffee retailers and instant coffee can pose a problem in regards to price compared to Keurig; however Green Mountain does provide an online website which allows consumers to purchase products such as K-cups and Keurig Units at a discounted price. Because of this online availability Green Mountain holds some grounds for its livelihood in the world of coffee.
The Strategy that Green Mountain is using and the methods of their company that they stand by today is to offer an environment friendly way of making and distributing quality coffee. Green Mountain has lived on the notion that you don’t have to go to a coffee store to get quality coffee. By allowing consumers to pick and choose their favorite blends of coffee, Green Mountain has allowed the ability of quality coffee to be brewed in the luxury of your own home. By incorporating the use of the internet, Green Mountain has eliminated the need of a store front by allowing consumers to purchase their products directly on-line. However Green Mountain has also partnered with outside vendors allowing their products to be sold indirectly, once again allowing the consumer an array of options to choose from.
The major issues and challenges that face this organization is the manufacturing being solely based and manufactured in China. If the manufacturer one day decides to up the cost of the work being performed Green Mountain would take a significant loss or be forced to find manufacturing partners elsewhere. Another huge issue is the dependency on specialty coffee and price. If the economy once gain falls as it recently did, Green Mountain Keurig would be considered more of a luxury when so many different affordable alternatives exist.
If I was in the position of the company looking to gain the competitive advantage I would start offering the Keurig Unit for free or at least at a lower price, instead of charging consumers close to a hundred dollars and up making it hard to make that decision, especially for the average family on a fixed budget. Secondly when taking into consideration how to retain existing customers and bring in new customers, discounting the Keurig unit will result in consumers automatically buying the K-cups at the store or online since they already have the unit. At the end of the day you want to have a sticky but yet affordable product, one that will be hard to leave once you have experienced it.
I liked the case study it allowed me to examine what a company goes through and what great things separate companies from one another. It also helped me create a solution for improving the profitability of a company. In the end, this case study really made you think of all the options available to the company and the best route they should take in order to ensure their livelihood in the business world.