This report aims at identifying and elaborating the strategies and issues related to Green Mountain Coffee Roasters (GMCR) and Starbucks Global Consumers Products Group in their endeavor to form a relationship between them.
Background
The Green Mountain Coffee Roasters and Starbucks Global Consumers Products Groups are two different companies with the objective of forming a strategic relationship to tap the market. The two companies aim at manufacturing, marketing, distributing and selling of the Tazotea K-cup portion packages and Starbucks packs that are essential in the running of the Keurig Single cup brewing system. Ideally, the Keurig means a Dutch word for success. It was initiated in the year 1990. It was based on the belief that coffee ought to be served when fresh. The two companies have differentiated leadership who has an objective of working together. The president of Starbucks Global Consumers Products Group is called Jeff Hansberry. On the other side, the president of Green Mountain Coffee Roasters (GMCR) is Larry Blandford.
The objective of the two firms is to develop a new system where Keurig single cup brewing is adopted. Accordingly, the brewing market held it that the Keurig brewer was in a stable position to maximize utility, brewing strategies and delivering fresh coffee. Historically, the two companies were ranges to be among the best top five in selling the coffee in the United States. This result is extracted from the sales analysis in the year 2010. In addition, they represented the 49% of the coffee sellers in the year 2010. However, the statistical analysis made at the key Bank Capital Markets investment presentation, the sales have gradually increased from 58% to 89 % of the original income. Currently, the strategic merger is deemed to have a substantial influence over the coffee market in the region.
The merger or the specialized relationship between the two firms, Mountain Coffee Roasters and Starbucks Global Consumers Products Groups, has had flourishing results within the recent period they have operated the Keurig single cup brewing system. The companies have their strengths, weaknesses, opportunities and threats within its operation.
Strengths
First, the partnership formed between the two entities is essential in the success of the investment. In addition, dual success of the firm is based on high quality coffee produced. This creates a strong base of customer relationship. In addition, the entity has a strong advertisement strategy which has been effective in enabling it to capture the market effectively.
Weaknesses
It is sometimes challenging for the two companies to merge their efforts in terms of human resources. In addition, the entity used the retail market chain to reach the customer unlike other entities that have direct access to the market.
Opportunities
The entity has a standing chance of accessing almost the entire market scope due to its capacity to make large volumes of output. In addition, merger formed from the interrelationship between the subject firms has established technology to enable it to move higher in terms of quality. Then the market can develop an essential market structure.
Threats
The entity is under the threat of losing the market if it does not enhance a better strategy to reach the market. This means that all the expenses undergone when establishing the system would yield to nothing.
Competitive edge
Ideally, the consumers of this particulate product have a wide scope of options. The competition has been gradually increasing. One of the reasons behind this is because the market is easy to enter for the willing and able investors. In addition, there are other low-cost and affordable brewers that encourage other brewing entities to enter the market. In addition, some of the competitors have a better financial base than the current subject entity.
Ideally, the idea of merging is essentially well structured for the advantage of the entity. However, the entity should ensure that the technology is developed to a competitive edge. This may be essential in creating a better strategy to compete with the stiff competition. In addition, the firm should ensure that consistency is ensured. The saving scheme should be enhanced to ensure that the entity is safe during recession. The finance can be used to train the staff on developing issues in the industries.
Opinion
The case study gives a clear and definite history and information on the gradual development of the entities in the coffee making industry. Ideally, the case study gives a definite and significant guideline for any willing entrepreneur or entity that wishes to venture into the business. It has a suitable guideline of the strengths and opportunities that can be assessed in the business.
References
Dess, G., Lumpkin, G. & Eisner, A. (2012). Strategic Management (6e). Boston: McGraw-Hill Irwin.
Manivong, P., Mahavong, P., David, A., Homevongsa, V., Mongpadith, S., & Guitet, C. (2007). Participative analysis of coffee supply chain in Lao PDR.
