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Keurig From David to Goliath The Challenge of Gaining and Maintaining Marketplace Leadership Case Solution

Solution Id Length Case Author Case Publisher
2682 1704 Words (7 Pages) Eric T. Anderson, Elizabeth Anderson Kellogg School of Management : KEL714
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Keurig Incorporated, the single-serve coffee brewer manufacturer, has come under the umbrella of Green Mountain Coffee Roster (GMCR) as a wholly owned subsidiary between 2002 to 2011. In 2002, Keurig introduced the first coffee brewing system, established its market position, and eventually accumulated around 25% of the coffee maker market in the United States. These impressive milestones have attracted companies from complementary industries to collaborate with Keurig. Quite recently, in 2011, coffee franchises like Dunkin Donuts and Starbucks inaugurated partnerships with the company. The general manager and vice president of the company, John Whorisky, realize the fact that the road forward is still not easy:

  • The patents for technology and packaging that gives Keurig its competitive edge is going to expire between 2013-2017 and open the floodgates for the new entrants in the market. 

  • The changing trends have made consumers more conscious about the environment and the non-recyclable nature of Keurig's K-cup packaging.

Following questions are answered in this case study solution:

  1. What is the potential of the single-serve coffee market? Where is the single-serve coffee machine in its life cycle? As the major player in this market, what should its strategic focus be?

  2. What steps should be taken to deal with the expiration of patents?

  3. How should the company address environmental concerns have associated with the use of K cups?

Case Study Questions Answers

1. What is the potential of the single-serve coffee market? Where is the single-serve coffee machine in its life cycle? What should its strategic focus be as the major player in this market?

The potential of the single-serve coffee market has grown immensely over the course of the last decade. Extensive advertisement campaigns and the product's circulation in the market have appealed to coffee enthusiasts and made coffee consumers realize the utility and ease of having a coffee brewing system. Between 2004 and 2010, coffee makers witnessed the growth and contributed around 19% of the total sales. According to a survey, by 2008, around 71% of the households in the United States owned a single-serve coffee maker. Furthermore, a research paper published by the US Health and Food department showed that of the 44% of people in the US that consume coffee, 75% of them have made arrangements at home as opposed to a coffee parlour. Coffee is an essential part of day-to-day life in western culture: it's an essential part of the day's first meal. Thus, saying that the coffee market holds immense potential would be an understatement. 

In terms of technological advancement, the single-serve coffee machine is moving towards the maturity stage. The technology has reached its potential with extensive research into the technology by many corporate giants like Proctor & Gamble. However, there is still room for improvement. The technology has been in the market for quite some time now. Upon the expiration of patents, new entrants will have the opportunity to enter the market and make improvements and tweaks in accordance with customer orientation. This will not only lead to technological advancements but will also ensure that the numerous varieties of coffee brewing systems are available to customers according to their affordability.  

As the major player in the market and one of the early adopters of the technology, it falls upon the shoulders of Keurig to take over the mantle and pave the road to innovation. Their marketing strategy should be in line with the customer-driven campaigns with an emphasis on adding value for their customer. The primary focus should be on delivering a better experience to the customers. Investment in Research & Development can pave the way for future developments. For instance, a market survey can shed light on their product's shortcomings and how they can be rectified to give the consumers an enhanced experience. A go-to move would be to benchmark their products against other players in the market, learn from them and build upon the company's shortcomings.

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