Keurig at Home Essay

1068 WordsNov 18, 20145 Pages
Keurig coffee system runs on portion pack (patented) of premium coffee, which is developed in a unique way to stay fresh. The management thought its unique coffee packing and brewing concept would win in the market place. However, there are many competitors in the market that offer technically superior brewers to Keurig’s. So instead of focusing alone on their unique brewers, Keurig recruited strategic partners such as roasters and distributors that can leverage Keurig assets to utilize the opportunity in OCS market. A key differentiator for Keurig system is it offers a wide variety of coffee flavors through licensing arrangements with different roasters. A total of 75 coffee varieties are available through 5 different roasters and these roasters pay Keurig a royalty of approximately $0.04 for every variety of K-cup sold. Keurig utilizes its engineering prowess to streamline brewing and packaging lines to make flawless brewers. Also, Keurig system is a rare value that can be used to gain competitive advantage in OCS market. As mentioned above, Keurig’s innovative single serve K-cups that deliver fresh premium coffee combined with hassle free brewing and cleaning will place Keurig far ahead of competitors in OCS market. In addition, inimitability is a huge advantage for Keurig system. Since Keurig’s single serve packaging system is patented, competitors are restricted to imitate it’s technology which will give Keurig sustained competitive advantage and profits for a period of time. Keurig management organized its strategic partners such as roasters and distributors to fully utilize the competitive advantage potential of Keurig system. OCS distribution network in US is fragmented with heavy price competition. A proliferation of specialty coffeehouses such as Starbucks had successfully educated consumers about good quality of coffee and coffee based specialty

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