Keurig Essay

1930 Words8 Pages
Q1-1, how attractive is the Keurig system to the typical Office Coffee Distributor? Answer: Since K-Cup represents a new means of packaging coffee which increase shelf life of and assures the freshness of coffee, distributors may able to reduce the frequency of supply and reduce the pressure from delays in transportation. Above features may lead distributors save money on distribution process, thus they may prefer distributing K-Cups over their currently supplying coffee. Q1-2, how attractive is the Keurig system to the coffee roaster? Answer: A long with the changing demand of customers and developing technology, coffee roasters need to catch up industry trend and adjust the change to ensure stay and continuing success in the coffee industry. Since Keurig introduced a new technology which serves speed and provide fresh taste at the same time, coffee roasters will need to put more effort on develop a new way to package their products to compete with K-Cup and open up their market and consolidate market position. Q1-3: how attractive is the Keurig system to Keurig? Answer: Keurig is providing easier and efficient way to consume fresh coffee. Considering the number of cups consumed in offices per year which are approximately 20.8 billion (1,937,000*43*250), making $0.04 profit on every K-Cup will bring 832million profit to Keurig per year (not considering time value of money, tax and etc.). Most importantly, this huge amount of profit is only from office users (only occupy 17% of coffee consumption). Keurig will able to make more profit by expanding its business to food service and households. On the other hand, sales of K-Cups may also able to contribute on balancing the losses in the brewer sales. Q1-4: how attractive is the Keurig system to a typical Office manager? Answer: There are three attractive points to the office

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