Keurig Dr Pepper (0Z62) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Keurig Dr Pepper (United Kingdom)

Based on various researches at Oak Spring University , Keurig Dr Pepper is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, wage bills are increasing, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of Keurig Dr Pepper

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Keurig Dr Pepper can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Keurig Dr Pepper, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Keurig Dr Pepper 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 Keurig Dr Pepper can be done for the following purposes –
1. Strategic planning of Keurig Dr Pepper
2. Improving business portfolio management of Keurig Dr Pepper
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Beverages (Nonalcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Keurig Dr Pepper

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Strengths of Keurig Dr Pepper | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Keurig Dr Pepper are -

Successful track record of launching new products

– Keurig Dr Pepper has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Keurig Dr Pepper 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.

Operational resilience

– The operational resilience strategy of Keurig Dr Pepper comprises – understanding the underlying the factors in the Beverages (Nonalcoholic) 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.

Cross disciplinary teams

– Horizontal connected teams at the Keurig Dr Pepper 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.

Digital Transformation in Beverages (Nonalcoholic) industry

- digital transformation varies from industry to industry. For Keurig Dr Pepper digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Keurig Dr Pepper 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.

Learning organization

- Keurig Dr Pepper is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Keurig Dr Pepper is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Keurig Dr Pepper emphasize – knowledge, initiative, and innovation.

High brand equity

– Keurig Dr Pepper has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Keurig Dr Pepper to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– Keurig Dr Pepper is one of the most innovative firm in Beverages (Nonalcoholic) sector.

Sustainable margins compare to other players in Beverages (Nonalcoholic) industry

– Keurig Dr Pepper has clearly differentiated products in the market place. This has enabled Keurig Dr Pepper to fetch slight price premium compare to the competitors in the Beverages (Nonalcoholic) industry. The sustainable margins have also helped Keurig Dr Pepper to invest into research and development (R&D) and innovation.

Training and development

– Keurig Dr Pepper has one of the best training and development program in Consumer/Non-Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Ability to recruit top talent

– Keurig Dr Pepper is one of the leading players in the Beverages (Nonalcoholic) industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.

Ability to lead change in Beverages (Nonalcoholic)

– Keurig Dr Pepper is one of the leading players in the Beverages (Nonalcoholic) industry in United Kingdom. Over the years it has not only transformed the business landscape in the Beverages (Nonalcoholic) industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Keurig Dr Pepper in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Analytics focus

– Keurig Dr Pepper 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 Beverages (Nonalcoholic) industry. The technology infrastructure of United Kingdom is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

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Weaknesses of Keurig Dr Pepper | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Keurig Dr Pepper are -

Employees’ less understanding of Keurig Dr Pepper strategy

– From the outside it seems that the employees of Keurig Dr Pepper 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 cash cycle compare to competitors

Keurig Dr Pepper has a high cash cycle compare to other players in the Beverages (Nonalcoholic) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Need for greater diversity

– Keurig Dr Pepper 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.

Increasing silos among functional specialists

– The organizational structure of Keurig Dr Pepper is dominated by functional specialists. It is not different from other players in the Beverages (Nonalcoholic) industry, but Keurig Dr Pepper needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Keurig Dr Pepper to focus more on services in the Beverages (Nonalcoholic) industry rather than just following the product oriented approach.

Skills based hiring in Beverages (Nonalcoholic) industry

– The stress on hiring functional specialists at Keurig Dr Pepper 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.

Ability to respond to the competition

– As the decision making is very deliberative at Keurig Dr Pepper, in the dynamic environment of Beverages (Nonalcoholic) industry it has struggled to respond to the nimble upstart competition. Keurig Dr Pepper has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Compensation and incentives

– The revenue per employee of Keurig Dr Pepper is just above the Beverages (Nonalcoholic) industry average. It 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.

Capital Spending Reduction

– Even during the low interest decade, Keurig Dr Pepper 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 Beverages (Nonalcoholic) industry using digital technology.

Slow decision making process

– As mentioned earlier in the report, Keurig Dr Pepper has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Nonalcoholic) industry over the last five years. Keurig Dr Pepper 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.

Lack of clear differentiation of Keurig Dr Pepper products

– To increase the profitability and margins on the products, Keurig Dr Pepper needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to strategic competitive environment developments

– As Keurig Dr Pepper is one of the leading players in the Beverages (Nonalcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Nonalcoholic) industry in last five years.

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Keurig Dr Pepper Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Keurig Dr Pepper are -

Creating value in data economy

– The success of analytics program of Keurig Dr Pepper has opened avenues for new revenue streams for the organization in Beverages (Nonalcoholic) industry. This can help Keurig Dr Pepper to build a more holistic ecosystem for Keurig Dr Pepper products in the Beverages (Nonalcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Use of Bitcoin and other crypto currencies for transactions in Beverages (Nonalcoholic) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Keurig Dr Pepper in the Beverages (Nonalcoholic) industry. Now Keurig Dr Pepper can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

– Keurig Dr Pepper has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Nonalcoholic) sector. This continuous investment in analytics has enabled Keurig Dr Pepper to build a competitive advantage using analytics. The analytics driven competitive advantage can help Keurig Dr Pepper to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Keurig Dr Pepper 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 Keurig Dr Pepper 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. Keurig Dr Pepper can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Keurig Dr Pepper is facing challenges because of the dominance of functional experts in the organization. Keurig Dr Pepper can utilize new technology in the field of Beverages (Nonalcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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 Dr Pepper can use these opportunities to build new business models that can help the communities that Keurig Dr Pepper operates in. Secondly it can use opportunities from government spending in Beverages (Nonalcoholic) sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Keurig Dr Pepper in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Nonalcoholic) industry, and it will provide faster access to the consumers.

Learning at scale

– Online learning technologies has now opened space for Keurig Dr Pepper 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.

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 Dr Pepper 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Keurig Dr Pepper 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

– Keurig Dr Pepper can improve the customer journey of consumers in the Beverages (Nonalcoholic) industry by using analytics and artificial intelligence. It 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.

Building a culture of innovation

– managers at Keurig Dr Pepper 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 Beverages (Nonalcoholic) industry.

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Threats Keurig Dr Pepper External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Keurig Dr Pepper are -

Barriers of entry lowering

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

Stagnating economy with rate increase

– Keurig Dr Pepper 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 Beverages (Nonalcoholic) industry.

Shortening product life cycle

– it is one of the major threat that Keurig Dr Pepper is facing in Beverages (Nonalcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Dr Pepper needs to understand the core reasons impacting the Beverages (Nonalcoholic) industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Keurig Dr Pepper has witnessed rapid integration of technology during Covid-19 in the Beverages (Nonalcoholic) industry. As one of the leading players in the industry, Keurig Dr Pepper needs to keep up with the evolution of technology in the Beverages (Nonalcoholic) 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.

Easy access to finance

– Easy access to finance in Beverages (Nonalcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Keurig Dr Pepper can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Keurig Dr Pepper needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Keurig Dr Pepper can take advantage of this fund but it will also bring new competitors in the Beverages (Nonalcoholic) industry.

Regulatory challenges

– Keurig Dr Pepper 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 Beverages (Nonalcoholic) industry regulations.

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.

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 Dr Pepper in the Beverages (Nonalcoholic) sector and impact the bottomline of the organization.

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.

Consumer confidence and its impact on Keurig Dr Pepper 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 Beverages (Nonalcoholic) industry and other sectors.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Keurig Dr Pepper.

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Weighted SWOT Analysis of Keurig Dr Pepper Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Keurig Dr Pepper 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 Keurig Dr Pepper 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 Keurig Dr Pepper 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 Dr Pepper 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 Dr Pepper needs to make to build a sustainable competitive advantage.

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