Manufacturing and Packaging Line
CASE ANALYSIS MEMO – SESSION 06
Keurig
2012.11.07
Entrepreneurial Management
Dr. Sean M. Hackett
Waseda Business School, MBA
Fall, 2012
Panjapol wariratanaroj (pe) – #35112329-5
JOanna chen (joanna) – #35112318-7
li wei – #35122327-5
kemal SADULLAYEV (kemal) – #35129403-1
Gaetano d’imprima (tano) – #35129755-8
I. Identify/Define the Key Issues/Situation Analysis A. Key issues that will impact Keurig to survive, thrive and grow • Strong bargaining power from a supplier: MTS, being the only supplier for the K-Cup packaging line, has a control over the machine. Having no substitution plan in place, Keurig is forced to follow MTS’s request to fulfill the K-Cup manufacturing capacity. • Difficult to ‘reverse engineer’ the manufacturing technology: despite the alternatives of having new K-Cup suppliers, there is no assurance that the new suppliers could complete the project on-time and on-budget as the learning curve is hard to be built at an initial stage. • Delays in the full roll-out of the new coffee brewing system: delays in manufacturing lines (both K-Cup’s production and brewing machines) caused a subsequent delay in distributing goods to consumers. Thus, it created risk of losing market opportunity to other competitors. B. Critical Success Factors • Quality of the final product: despite marketing efforts and distribution channels, if either the final product (coffee) tastes bad or the brewer does not perform well, it can’t be sold. • Consistent and sufficient funding prior to the product launch: in order to create an impact to the coffee market, the large amount of funding is required to support the operations. • Ability to bring a brewer’s price down in a consumer segment while keeping the good quality product: considering the high quality coffees, people are more likely to purchase a less expensive household version especially at a
Keurig
2012.11.07
Entrepreneurial Management
Dr. Sean M. Hackett
Waseda Business School, MBA
Fall, 2012
Panjapol wariratanaroj (pe) – #35112329-5
JOanna chen (joanna) – #35112318-7
li wei – #35122327-5
kemal SADULLAYEV (kemal) – #35129403-1
Gaetano d’imprima (tano) – #35129755-8
I. Identify/Define the Key Issues/Situation Analysis A. Key issues that will impact Keurig to survive, thrive and grow • Strong bargaining power from a supplier: MTS, being the only supplier for the K-Cup packaging line, has a control over the machine. Having no substitution plan in place, Keurig is forced to follow MTS’s request to fulfill the K-Cup manufacturing capacity. • Difficult to ‘reverse engineer’ the manufacturing technology: despite the alternatives of having new K-Cup suppliers, there is no assurance that the new suppliers could complete the project on-time and on-budget as the learning curve is hard to be built at an initial stage. • Delays in the full roll-out of the new coffee brewing system: delays in manufacturing lines (both K-Cup’s production and brewing machines) caused a subsequent delay in distributing goods to consumers. Thus, it created risk of losing market opportunity to other competitors. B. Critical Success Factors • Quality of the final product: despite marketing efforts and distribution channels, if either the final product (coffee) tastes bad or the brewer does not perform well, it can’t be sold. • Consistent and sufficient funding prior to the product launch: in order to create an impact to the coffee market, the large amount of funding is required to support the operations. • Ability to bring a brewer’s price down in a consumer segment while keeping the good quality product: considering the high quality coffees, people are more likely to purchase a less expensive household version especially at a