Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership
From 2002 to 2011, coffee-machine manufacturer Keurig Incorporated had grown from a privately held company with just over $20 million in revenues and a plan to enter the single serve coffee arena for home consumers, to a wholly owned subsidiary of Green Mountain Coffee Roasters, Inc., a publicly traded company with net revenues of $1.36 billion and a market capitalization of between $8 and $9 billion. In 2003 Keurig had introduced its first At Home brewer. Now, approximately 25 percent of all coffee makers sold in the United States were Keurig-branded machines, and Keurig was recognized as among the leaders in the marketplace. The company had just concluded agreements with both Dunkin' Donuts and Starbucks that would make these retailers' coffee available for use with Keurig's specialized brewing system. The company faced far different challenges than when it was a small, unknown marketplace entrant. John Whoriskey, vice president and general manager of Keurig's At Home division, had to consider the impact that impending expiration of key technology patents and the perceived environmental impact of the K-CupA? portion packs would have on the company's growth. Whoriskey also wondered what Keurig's growth potential was, and how the new arrangements with Starbucks and Dunkin' Donuts could be leveraged to achieve it.
Swot Analysis of "Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership" written by Eric T. Anderson, Elizabeth Anderson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Keurig Coffee facing as an external strategic factors. Some of the topics covered in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership case study are - Strategic Management Strategies, Marketing, Pricing, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing energy prices, cloud computing is disrupting traditional business models, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Keurig Coffee, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Keurig Coffee operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership can be done for the following purposes –
1. Strategic planning using facts provided in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership case study
2. Improving business portfolio management of Keurig Coffee
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Keurig Coffee
Strengths Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Keurig Coffee in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership Harvard Business Review case study are -
Effective Research and Development (R&D)
– Keurig Coffee has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Keurig Coffee is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Keurig Coffee is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Keurig Coffee has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Keurig Coffee in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Keurig Coffee has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Keurig Coffee is one of the leading recruiters in the industry. Managers in the Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Keurig Coffee are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Keurig Coffee in the sector have low bargaining power. Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Keurig Coffee to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Keurig Coffee has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Keurig Coffee has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Keurig Coffee to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Sales & Marketing field
– Keurig Coffee is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Keurig Coffee in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership are -
High operating costs
– Compare to the competitors, firm in the HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Keurig Coffee 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership, is just above the industry average. Keurig Coffee needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Keurig Coffee supply chain. Even after few cautionary changes mentioned in the HBR case study - Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Keurig Coffee vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Keurig Coffee, firm in the HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Keurig Coffee products
– To increase the profitability and margins on the products, Keurig Coffee needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Eric T. Anderson, Elizabeth Anderson suggests that, Keurig Coffee is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Keurig Coffee has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Keurig Coffee even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Need for greater diversity
– Keurig Coffee has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Keurig Coffee needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Products dominated business model
– Even though Keurig Coffee has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership should strive to include more intangible value offerings along with its core products and services.
Opportunities Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership are -
Using analytics as competitive advantage
– Keurig Coffee has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Keurig Coffee to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Keurig Coffee can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Keurig Coffee can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Keurig Coffee can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– Keurig Coffee has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Keurig Coffee can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Keurig Coffee can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Keurig Coffee is facing challenges because of the dominance of functional experts in the organization. Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Keurig Coffee to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Keurig Coffee to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Keurig Coffee can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Keurig Coffee can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Keurig Coffee to increase its market reach. Keurig Coffee will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Keurig Coffee can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Keurig Coffee can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership are -
Regulatory challenges
– Keurig Coffee needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Keurig Coffee business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Keurig Coffee will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Keurig Coffee demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Keurig Coffee needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Keurig Coffee can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership, Keurig Coffee may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Keurig Coffee.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Keurig Coffee needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Keurig Coffee
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Keurig Coffee.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Keurig Coffee in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Keurig Coffee has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Keurig Coffee needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Keurig Coffee in the Sales & Marketing sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Keurig Coffee with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Keurig Coffee needs to make to build a sustainable competitive advantage.
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