Keurig

MKTG 515 November 16, 2012 KEURIG CASE ANALYSIS J O H N B E A V E R , A A R T I B I N D L I S H , I G O R D O Z O R , R A HU L V E R M A , H A N G W U I NTRODUCTION Keurig has been fortunate in selling its coffee create from raw material system to the military position coffee segment (OCS) of the US market. This success led its leadership to ponder entering the consumer market. enchantment making the move might take c nuclear number 18 like a reasonable side by side(p) step in the developm ent of the family core business, it also presents unique(p) challenges. The biggest of those challenges concerns the danger of losing the actual OCS business due to a thinkable disruption of the unique dispersal channels that the company relies on for OCS. The management also has to conclude on the appropriate determine scheme for its new beer maker, which is further complicated by the proprietary disposition of the coffee cup (aka K-Cup) that comes with i t. C ALCULATING THE BREW ER PRICE In calculating the price for the beer maker we essential consider the honorable picture. In particular, the proprietary nature of the company business inevitably ties the meshing on the brewer and the bread on the coffee that comes with the brewer.

More specifically, the total profit per guest: It should be notes here that the aforementioned profit model is by no means unique to Keurig, and can be set out(a) in other industries, like computers (where the profits be a great deal split a cross hardware and software) or printers (where the profits are split across hardware and cartridges). Writing out the to a hig! her place formula further, we get: (1) (2) (3) 1 The last equality (3), although follows immediately from the foregoing one (2), illustrates an important conceptual point, namely: profit margins gained on coffee revenue sales can offset the costs of a brewer. Also, presumptuousness the nature of their coffee business (royalties), the margins on coffee sales are virtually equivalent to profits (no costs are incurred in order to receive royalties). 1...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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