The Keurig Green Mountain Coffee Company

After reviewing the financial and performance information related to Keurig Green Mountain and its operations, I would recommend holding the Keurig Green Mountain stock. Keurig has a high degree of leverage and has the ability to take on more debt to finance its expansion of operations. As Keurig Green Mountain navigates managing strong sales in current markets and expanding into untapped markets, it will also have to manage criticism about sustainability and face legal consequences stemming from product recalls. Balancing the strong growth potential with challenging strategic issues will help determine Keurig’s unpredictable stock price.

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 Green Mountain (GMCR), the maker of quick-serve coffee machines and those ubiquitous coffee pods, plans to cut its workforce by 5% after reporting a massive sales slump in the third quarter, the company said Thursday.

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

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

Keurig, Inc. was founded on “excellence”, which is the Dutch meaning of its name, and the innovative principle of allowing consumers to be able to make a single excellent cup of coffee whenever they wanted it at home or work with their K-cup single cup brewing system. The Keurig system was such a hit in offices that the company knew the next step was to position themselves to sell units to individuals for use in their homes. At home coffee brewers were always faced with two things loose coffee grounds to clean up and coffee that never quite tasted right. The Keurig system would eliminate both of those issues for the

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.

Keurig Green Mountain, previously owned by Keurig, Inc., was introduced in 1998. Beginning as a vision in the 70’s, the goal of the company was to solve a typical office problem; a full pot of coffee sitting, growing bitter, dense, and stale. The vision was a single cup coffee brewer. In 1992, a business plan was formed and partnerships were made. John Sylvan, the man with the plan, called in Peter Dragone, a former college roommate and director of finance at Chiquita, and Keurig was founded. But the vision and the plan were not enough. They needed funding. In order to quit making their coffee pods by hand and make their single coffee brewers more reliable, they sought the help Dick Sweeny to automate the manufacturing process while

Keurig has been successful in selling its coffee brewing system to the office coffee segment (OCS) of the US market. This success led its leaders to ponder entering the consumer market. While making the move might seem like a reasonable next step in the development of the company core business, it also presents unique challenges.

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

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.

The coffee industry has proven there is a never-ending shift of global power through the global economy. Thus, through the history of coffee, it is apparent that factors involving the globalization process such as absolute advantage and comparative advantage have had an impact

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

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.

The expansion of Keurig Green Mountain products to Kuwait include some risks to the organization, but the company must assume some risk in order to capture gains and competitive advantage. The expansion is a strategy designed to support sales growth and to establish competitive advantage in global coffee market. Kaplan & Mikes (2012) emphasized that companies accept some risk to generate returns from strategy. Strategies that demand high returns on investment require companies to assume more risk. Keurig Green Mountain will assume some level of risk with the expansion of Keurig products to Kuwait. The company must evaluate internal, external, microeconomic and financial risks associate with the new investments.