Case Detail

Case Summary

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

Case Number: 5-411-751, Year Published: 2012

HBS Number: KEL714

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Authors: Eric T. Anderson; Elizabeth L Anderson

Key Concepts

Competitive Strategy, Consumer Marketing, Crisis Management, Growth Strategy, Marketing, Marketing Strategy, Pricing Strategy, Product Development, Product Management, Strategic Alliances

Abstract

From 2002 to 2011, coffee-machine manufacturer Keurig Incorporated had grown from a privately held company with just over $20 million in revenues and a plan to enter the single serve coffee arena for home consumers, to a wholly owned subsidiary of Green Mountain Coffee Roasters, Inc., a publicly traded company with net revenues of $1.36 billion and a market capitalization of between $8 and $9 billion.

In 2003 Keurig had introduced its first At Home brewer. Now, approximately 25 percent of all coffee makers sold in the United States were Keurig-branded machines, and Keurig was recognized as among the leaders in the marketplace. The company had just concluded agreements with both Dunkin’ Donuts and Starbucks that would make these retailers’ coffee available for use with Keurig’s specialized brewing system.

The company faced far different challenges than when it was a small, unknown marketplace entrant. John Whoriskey, vice president and general manager of Keurig’s At Home division, had to consider the impact that impending expiration of key technology patents and the perceived environmental impact of the K-Cup® portion packs would have on the company’s growth. Whoriskey also wondered what Keurig’s growth potential was, and how the new arrangements with Starbucks and Dunkin’ Donuts could be leveraged to achieve it.

Number of Pages: 16

Extended Case Information

Teaching Areas: Marketing

Teaching Note Available: Yes

Geographic: Reading, Massachusetts, United States

Industry: Beverage

Organization Name: Keurig Incorporated

Organization Department: At Home Division

Organization Size: Large

Decision Maker Position: Vice President and General Manager

Decision Maker Gender: Male

Year of Case: 2011