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 - – supply chains are disrupted by pandemic , increasing energy prices, wage bills are increasing, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, 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 -
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.
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.
Sustainable margins compare to other players in Sales & Marketing industry
– Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership firm has clearly differentiated products in the market place. This has enabled Keurig Coffee to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Keurig Coffee to invest into research and development (R&D) and innovation.
Analytics focus
– Keurig Coffee is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Eric T. Anderson, Elizabeth Anderson can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
Diverse revenue streams
– Keurig Coffee is present in almost all the verticals within the industry. This has provided firm in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
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.
Innovation driven organization
– Keurig Coffee is one of the most innovative firm in sector. Manager in Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 -
Skills based hiring
– The stress on hiring functional specialists at Keurig Coffee has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Keurig Coffee has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership, it seems that the employees of Keurig Coffee don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Aligning sales with marketing
– It come across in the case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership can leverage the sales team experience to cultivate customer relationships as Keurig Coffee is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Keurig Coffee is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership, in the dynamic environment Keurig Coffee has struggled to respond to the nimble upstart competition. Keurig Coffee has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Keurig Coffee is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Keurig Coffee needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Keurig Coffee to focus more on services rather than just following the product oriented approach.
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.
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 -
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Keurig Coffee in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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.
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.
Creating value in data economy
– The success of analytics program of Keurig Coffee has opened avenues for new revenue streams for the organization in the industry. This can help Keurig Coffee to build a more holistic ecosystem as suggested in the Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership case study. Keurig Coffee can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Keurig Coffee can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
Learning at scale
– Online learning technologies has now opened space for Keurig Coffee to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Keurig Coffee can use these opportunities to build new business models that can help the communities that Keurig Coffee operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Keurig Coffee to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Keurig Coffee can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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 -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
Stagnating economy with rate increase
– Keurig Coffee can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Keurig Coffee can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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.
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.
High dependence on third party suppliers
– Keurig Coffee high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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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