Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing commodity prices,
wage bills are increasing, there is backlash against globalization, 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 -
Diverse revenue streams
– Gmcr Keurig is present in almost all the verticals within the industry. This has provided firm in Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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.
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.
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.
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.
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.
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.
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.
Successful track record of launching new products
– Gmcr Keurig has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gmcr Keurig has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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 -
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Gmcr Keurig 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Gmcr Keurig has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
Need for greater diversity
– Gmcr Keurig 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Gmcr Keurig has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters, is just above the industry average. Gmcr Keurig 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters, in the dynamic environment Gmcr Keurig has struggled to respond to the nimble upstart competition. Gmcr Keurig has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gmcr Keurig in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gmcr Keurig can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Gmcr Keurig can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Keurig: Confidential Information for Negotiation with Green Mountain Coffee Roasters 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
– 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.
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.
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.
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.
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.
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. Gmcr Keurig can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
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.
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.
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.
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 .
Shortening product life cycle
– it is one of the major threat that Gmcr Keurig is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Gmcr Keurig business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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: Confidential Information for Negotiation with Green Mountain Coffee Roasters, Gmcr Keurig may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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.
Stagnating economy with rate increase
– Gmcr Keurig 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.
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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