Green Mountain Coffee Roasters (GMCR) and Keurig Coffee
Company background
For many years, especially in the second half of the twentieth century and the current twenty first century, the coffee industry is one of the industries that have been gaining customer base and appreciation not only regionally, but also globally. There are various factors that have led to the same, the two major factors being a consistently growing coffee market across the globe, as well as the growth and development of coffee as a lifestyle not only in the developed countries, but also the developing nations across the world. In this case, however, lifestyle and class is one of the aspects that Green Mountain Coffee Roasters (GMCR) in conjunction with Starbucks (a renowned coffee restaurant with global recognition) seek to tap into, by introducing the keurig coffee, whereby they can serve their customers in Starbucks-branded k-cups, in order to improve the quality of their service delivery to customers. Considering the fact that Starbucks is one of the most successful restaurants across the globe while Green Mountain Coffee Roasters (GMCR) is yet another globally acclaimed company (with high popularity in the United States), working together in a strategic partnership in order to provide quality and fresh coffee is one of the ways through which the two companies will not only increase their customer base, but also achieve higher sales and profitability. Since both companies have a large market share, working together will pull their respective markets together, into offering fresh and quality coffee, served in K-cups, and boost the number of sales for the same.
SWOT analysis
Strengths
- Green Mountain Coffee Roasters (GMCR) has been in the coffee industry for a long time, and this is essential in its strategic partnership, since it will guide them in adopting effective strategies in order to achieve their desired goals and objectives.
- The company has diverse knowledge on not only the production of the coffee products, but also the coffee market, which will guide them in making the right decisions in the strategic partnership.
- Working with Starbucks is of great importance to Green Mountain Coffee Roasters (GMCR), since the two companies will pull their customer base together, in acquiring a higher number of their clients.
- Green Mountain Coffee Roasters (GMCR) has a large market share, and this is necessary, especially in implementing the new strategy in conjunction with Starbucks.
Weaknesses
- Green Mountain Coffee Roasters (GMCR) only has a strong market in the United States, but less markets in other countries across the world.
- Coffee has not been effectively adopted as a culture across other nations apart from the United States and a few other developed countries, such as England and Japan.
- Coffee consumption in the United States’ market is not consistent and definite, and this might affect several aspects and operations, such as budgeting.
Opportunities
- Green Mountain Coffee Roasters has the opportunity of tapping into Starbucks’ market base, especially in the United States, since Starbucks have a higher market share in comparison to Green Mountain Coffee Roasters.
- There has been an increasingly growing coffee market in various developing countries across the world, as well as various parts across the world. In this case, the introduction of the Starbucks-branded k-cup stands chances of good performance in the market.
- The single-serve brew system is a great opportunity for Green Mountain Coffee Roasters, since the customers can purchase the product in their desired quantities, and without limitations.
Threats
- Strategic partnership with Starbucks might lead to assimilation of Green Mountain Coffee Roasters into the Starbucks market.
- As it has already been established, there have been inconsistent changes in the dollar value, in the international market. Consequently, this might highly affect international investments, as well as the performance of the local investments in the strategic partnership.
Analysis through Porters’ Five Forces Model
- Threat of New entrants
The implementation of the new strategy through strategic partnership stands high chances of performance, since it is a unique idea, which has only been applied by Green Mountain Coffee Roasters alone, with all the rights of operation.
- Bargaining power of buyers
Considering the fact that the strategic partnership will bring together both the Green Mountain Coffee Roasters and Starbucks’ customers together in the implementation of the strategy, this means that there will be higher chances of an increased customer base, since both of the involved corporations will be bringing inn their customers in the implementation of the same (Ring, 2011).
- Bargaining power of suppliers
There are multiple coffee suppliers not only in the United States, but also across other exporting countries across the globe. At the same time, Green Mountain Coffee Roasters already has its own established suppliers with whom they have worked together for a long time, and changes in both the internal and external market settings will have minimal impacts on their suppliers’ willingness and readiness to trade with the corporation.
- Threats of substitute products
Considering the fact that this is a new investment that the strategic partnership seeks to invest in, there are high chances that it might take a longer time for it to be fully adopted in the market. In this case, therefore, customers might be obliged to stick to alternative products such as the hot coffee beverage among others, which might affect the initial picking up of the business.
- Rivalry among competitors
There is likelihood for less rivalry between the competitors, especially, considering the fact that the establishment is already based on a new product, and also considering the fact that Green Mountain Coffee Roasters is already working with Starbucks, which is one of the leading beverage restaurants in not only the United States but also other regions of the world. This consequently boosts the customers’ confidence in the product, and also reduces the level of possible competition.
Strategy used
One of the most essential things to note concerning the strategy used, which is competitive partnership, include the fact that it does not only boost the market in terms of the number of customers, but also boosts the strategic exchange of ideas between the company and Starbucks. As a result, the two companies will be in a position to come up with better products as well as services, since each of the companies have their own diverse and developed knowledge concerning the products (Kotler & Armstrong, 2008). At the same time, it is also necessary to note the fact that the branding inclusion of Starbucks will leave the corporation in a better position to tap into the Starbucks market.
Challenges
Considering the fact that Starbucks is a bigger company compared to Green Mountain Coffee Roasters, there are higher chances of Green Mountain Coffee Roasters’ customers being assimilated into the Starbucks market, especially in the purchase of other/alternative products. In this case, therefore, it is recommendable that each of the companies establishes themselves and their services as two separate entities, in terms of branding. This will ensure that the customers are in a good position to relate with their favorite companies and service providers, and that none of the companies gets assimilated into the other (Piercy, 2008).
References
Kotler, P. & Armstrong, G. (2008). Principles of marketing. New Jersey: Prentice Hall, pp. 116.
Ring, L. (2011). Strategic marketing. New Jersey: Prentice Hall, pp. 89.
Piercy, N. (2008). Strategic marketing. New York: McGraw-Hill, pp. 201.
