Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters
Case provides confidential information for students assuming the role of senior executives of Keurig, a startup that has developed an innovative "portion pack" coffee brewing solution, in a negotiation to license technology to Green Mountain Coffee Roasters (GMCR). The negotiation will determine the royalty to be paid to Keurig by GMCR, who will bear capital expenditures, and determine whether GMCR secures exclusive distribution rights to Keurig's system.
Authors :: Thomas R. Eisenmann, Shikhar Ghosh, James K. Sebenius
Swot Analysis of "Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters" written by Thomas R. Eisenmann, Shikhar Ghosh, James K. Sebenius includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gmcr Keurig facing as an external strategic factors. Some of the topics covered in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters case study are - Strategic Management Strategies, Entrepreneurship, Joint ventures, Negotiations and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters casestudy better are - – geopolitical disruptions, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gmcr Keurig, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gmcr Keurig 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters can be done for the following purposes –
1. Strategic planning using facts provided in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters case study
2. Improving business portfolio management of Gmcr Keurig
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gmcr Keurig
Strengths Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gmcr Keurig in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Gmcr Keurig digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gmcr Keurig has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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.
Training and development
– Gmcr Keurig has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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.
High switching costs
– The high switching costs that Gmcr Keurig 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters firm has clearly differentiated products in the market place. This has enabled Gmcr Keurig to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Gmcr Keurig to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Gmcr Keurig 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Gmcr Keurig 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.
Strong track record of project management
– Gmcr Keurig is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Gmcr Keurig 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 Gmcr Keurig is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Gmcr Keurig is one of the leading recruiters in the industry. Managers in the Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Gmcr Keurig has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gmcr Keurig to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Gmcr Keurig is one of the most innovative firm in sector. Manager in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters are -
Interest costs
– Compare to the competition, Gmcr Keurig 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Gmcr Keurig 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters, it seems that the employees of Gmcr Keurig 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 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 Gmcr Keurig supply chain. Even after few cautionary changes mentioned in the HBR case study - Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gmcr Keurig vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Increasing silos among functional specialists
– The organizational structure of Gmcr Keurig is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Gmcr Keurig needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gmcr Keurig to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Gmcr Keurig 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. Gmcr Keurig 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas R. Eisenmann, Shikhar Ghosh, James K. Sebenius suggests that, Gmcr Keurig 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.
Slow to strategic competitive environment developments
– As Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters HBR case study mentions - Gmcr Keurig takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Gmcr Keurig products
– To increase the profitability and margins on the products, Gmcr Keurig needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Gmcr Keurig has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters | 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters are -
Manufacturing automation
– Gmcr Keurig can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gmcr Keurig 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. Gmcr Keurig 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.
Creating value in data economy
– The success of analytics program of Gmcr Keurig has opened avenues for new revenue streams for the organization in the industry. This can help Gmcr Keurig to build a more holistic ecosystem as suggested in the Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters case study. Gmcr Keurig can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gmcr Keurig 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Gmcr Keurig 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gmcr Keurig to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gmcr Keurig can use these opportunities to build new business models that can help the communities that Gmcr Keurig operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Gmcr Keurig can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Gmcr Keurig in the consumer business. Now Gmcr Keurig can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Gmcr Keurig 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gmcr Keurig is facing challenges because of the dominance of functional experts in the organization. Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gmcr Keurig 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gmcr Keurig 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 Gmcr Keurig to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Gmcr Keurig can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Threats Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters are -
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. Gmcr Keurig needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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. Gmcr Keurig 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.
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 Gmcr Keurig.
Consumer confidence and its impact on Gmcr Keurig 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
– Gmcr Keurig 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. Gmcr Keurig can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gmcr Keurig 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters .
High dependence on third party suppliers
– Gmcr Keurig 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.
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.
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 Gmcr Keurig in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gmcr Keurig can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Gmcr Keurig has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Gmcr Keurig needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Increasing wage structure of Gmcr Keurig
– 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 Gmcr Keurig.
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.
Weighted SWOT Analysis of Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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 Gmcr Keurig needs to make to build a sustainable competitive advantage.
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