Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig

Case provides confidential information for students assuming the role of Green Mountain Coffee Roasters (GMCR) senior executives in a negotiation to license technology from Keurig, a startup that has developed an innovative "portion pack" coffee brewing solution. 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

Topics :: Innovation & Entrepreneurship

Tags :: Entrepreneurship, Joint ventures, Negotiations, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig" 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig casestudy better are - – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , technology disruption, there is increasing trade war between United States & China, geopolitical disruptions, increasing transportation and logistics costs, there is backlash against globalization, etc

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Introduction to SWOT Analysis of Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig can be done for the following purposes –
1. Strategic planning using facts provided in Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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

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Strengths Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Gmcr Keurig in Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig Harvard Business Review case study are -

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.

Superior customer experience

– The customer experience strategy of Gmcr Keurig in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous 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.

Organizational Resilience of Gmcr Keurig

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gmcr Keurig does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Analytics focus

– Gmcr Keurig 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 Thomas R. Eisenmann, Shikhar Ghosh, James K. Sebenius 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.

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.

Diverse revenue streams

– Gmcr Keurig is present in almost all the verticals within the industry. This has provided firm in Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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.

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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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.

Effective Research and Development (R&D)

– Gmcr Keurig 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to recruit top talent

– Gmcr Keurig is one of the leading recruiters in the industry. Managers in the Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Ability to lead change in Innovation & Entrepreneurship field

– Gmcr Keurig 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 Gmcr Keurig in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig are -

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 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.

Low market penetration in new markets

– Outside its home market of Gmcr Keurig, firm in the HBR case study Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow to strategic competitive environment developments

– As Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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.

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 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 - Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig, 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.

Products dominated business model

– Even though Gmcr Keurig 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 - Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig should strive to include more intangible value offerings along with its core products and services.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gmcr Keurig is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig, 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.

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.

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Opportunities Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig | 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig are -

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.

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.

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.

Buying journey improvements

– Gmcr Keurig can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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.

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.

Learning at scale

– Online learning technologies has now opened space for Gmcr Keurig 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.

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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig - 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.

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, Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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.

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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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.

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.

Developing new processes and practices

– Gmcr Keurig can develop new processes and procedures in Innovation & Entrepreneurship 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.

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Threats Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gmcr Keurig with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Gmcr Keurig in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.

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Weighted SWOT Analysis of Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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 Green Mountain Coffee Roasters: Confidential Information for Negotiation with Keurig 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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