Keurig's Decision to Implement DRM Technology In Future Coffee Brewers - Essay Example

Keurig's decision to implement DRM Technology in future coffee brewers Abstract With Keurig planning to expand its coffee brewing business to new levels, they have seen protecting their digital rights as the main step to move forward as they keep off the third party from their operations. With competition also in place from its main rivalsTree house foods and Rogers family company, how well Keurig survives with its new technology is yet to be seen as both competitors have sued Keurig for unfair competition for creating a monopoly. Implementing a DRM strategy is not a bad idea, as it will also open a big innovation to many companies worldwide in protecting their superior technology in the world of business (Lu, 2013). This will involve preventing third party coffee pods from being used in Keurig 2.0 machines. It has worked extremely well with the use of printers what we can refer as “lock out technology” preventing third parties from using their own cartridges and refills that have been a great success, but how well Keurig plans to use this is yet to be seen, and it may involve its own challenges. Keywords: Keurig, DRM, coffee The great coffee war in 2014 is coming with Keurig taking that direction, third parties will not have a way in the coffee market as Keurig plans to take a monopoly position as they will not use their cheap coffee pods in the new machine. Keurigs chief executive officer claims that this will only boost performance of their coffee market, meaning that the consumer will suffer from the increased coffee prices while innovation takes its new entry to the coffee market (Breward, 2012). This battle has even been transformed into litigation as Tree house food sued Green mountain coffee the parent company of Keurig back in February this year claiming that Keurig has been involved in unfair competition, in the market by creating a monopoly environment that would see the company drive many form the coffee brewing market. Another war is also coming as Rogers’s family company also considering litigation on the same. Jon Rogers claims that if Green mountain coffee is allowed to introduce the Keurig 2.0 machine with digital restrictions in it, this will amount to restraint in trade, and this would mean that Keurig 1.0 was the only brewer in the market. How this plays in the next coming months will be interesting to follow as the coffee giants battle it in the corridors of justice. The Keurig 2.0 with digital rights management will block unlicensed K-cup alternatives used by coffee brewers; it is of great importance to any big and historical company to protect its heritage by embracing the current technology (Rao, 2010). Competitors would be of great opinion to oppose the idea but from a wider perspective it open new doors to many who have seen their products become exploited by the third party maneuvering techniques that have seen many firms lose billions of dollars. Success has been seen with the use of printers, and it can also happen to Keurig. This has attracted even public opinion, as some would say they are going to suffer in terms of the increased prices but the bright side of it is the success of Keurig. This will also be transformed by engaging in corporate social responsibility as an effort of engaging more with their consumers and the general society. People have for a longtime appreciated the Keurig machines whether at home or work places, you do not need to walk into a coffee shop to have your favorite coffee as Keurig is always there for you. It offers great flexibility when people take coffee when they walk into their offices in the morning, during lunchtime and two hours before they head back to their homes. Why not appreciate their new product as it will also increase the quality of coffee offered even if the third party coffee pods have been claimed to make the coffee brewed sweeter. Keurig has been there for them in their offices, and people should support the new idea of a new product as Keurig continues to expand its operations. The introduction of a new machine took a trend in the social media through twitter as many gave different views of using the scientific product that would prevent counterfeiting. With all this in mind the idea of the DRM to Keurig is a quality control in mind and providing higher quality coffee that is more user experience is all that matters. Innovation is the key to success to any organization today. New technology has seen many companies being driven out of the market, for example, in this case Tree house food and Rover’s family fear for the worst of what will happen to them in the future, as Keurig takes new control in the market of coffee brewing. Creativity and innovations should be embraced in every part of any organization because this is what creates a favorable change that creates long term benefits to the firm. Business needs competition and with the new technology tapping it every day in the world of business, firms should be ready for whatever comes and make sure they are the first ones to adapt it as they look for creating new market niche that will create a competitive advantage in the future. Keurig management should be congratulated on their new efforts of bringing innovation that will even lead as an example to many companies in fighting third party cheap products from the market that lead to loss of billions to firms worldwide. Some of the advantages that will be expected from using the digital restrictions management technology by Keurig would include first in the end to take control of the coffee brewing machines. This will in turn transform to higher profits as all the money that used to go to third party pockets will all be now be on the hands of Keurig. With this Keurig will create a monopoly in the market by locking out competitors offering cheap coffee pods, and thus they will be able to control the prices in the market transforming to greater revenue meaning higher profits to the company. Keurig will enjoy a competitive advantage in the market. New technology always has the upper hand in the market and the only way to be it is to find a new one that is more creative and beneficial than that. But Keurig tapped into what we would call an unbeatable technology that would be there for a longtime. Since customer acceptance is already there for Keurig, its survival is highly enhanced, and this means a larger market share compared to its competitors. Fighting third party operations in providing cheap products in the market has been a great effort for many companies in the 21st century as they look to providing original and more appropriate quality products that are not affordable to counterfeits. Keurig has won this battle, and this will see its going concern aspect of it in the future. This will offer Keurig a more standing position to be involved in more strategic issues of finding new investment opportunities rather than being involved in fighting third party cheap products offering in the market. Loss of revenue would have been detrimental for Keurig but now it will overcome that and ensure long term success of the company. This would mean getting huge returns and investing in other viable projects like rebranding and improving the quality of their coffee brewing. Digital restrictions management is also beneficial to consumers in many ways; they know that the product or service they are receiving is authenticated and quality to standards. They also appreciate the fact that they can access their quality product at any given time and also in a legitimate manner. Customer acceptance and satisfaction is essential to any firm as they future of any company lies on the hands of customers. Keurig has provided a new dimension to the coffee brewing market by showing others that honoring the value to your product can bring long term success to the firm. With all this in hand there are also some flaws that go along with it, the first one being the huge initial cost outlay that will have to be incurred by Keurig in ensuring that their new 2.0 machine enter the market. A lot of resources will have to be consumed for the long term success of the product including human, knowledge and physical capital. Physical capital would include investment in information and communication equipment of the product being introduced into the market. Human capital would include investment that build individual or group abilities and skills within Keurig. Not forgetting the knowledge capital that is key to our topic in investment that build the intellectual property and the brand value of the Keurig. This will involve pulling a lot of resources together but in the final Keurig will have dominated the coffee brewing market. Scientific developments don’t always receive a good welcoming gesture from members of the public as some view it not healthy and also harming the environment. The social trend that arose from the introduction of the digital restriction management by Keurig was clearly seen as some came against the introduction of it by supporting the biodegradable French roast one cups from the San Francisco bay which is a brand of the Rogers family company out of Lincoln, California. People said that the used the cups mostly because they are environmental friendly, their price was good, and the taste of the coffee was quite pleasing to them. But still people will go for the scientific development because of its new innovative nature that will run for many years as no unlicensed cups will be detected by the Keurig 2.0 DRM machine (Close up, 2013). The machine will offer interactive benefits as described by Keurig CEO. Every new thing comes at a price, and the price that Keurig will have to pay is the price of litigation and so far it has gone through one from Tree house foods for monopolizing the market and restraining trade in the coffee brewing market. Rogers family company is also preparing for the same, and this is a big cost that Keurig will have to incur in court battles for it to keep its new innovative technology in the market. Whatever the outcome will be the books of Keurig will have shrined with a given margin as at some point if they lost the case this would meant that all what they did was total failure loosing huge billion of money for the big project. The company should be prepared for any company to avoid bankruptcy as litigation is not the best approach for any given company as it could result to serious damage to the company. Recommendations It is clear that Keurig wants to expand its business into greater heights, but with it brings advantages and shortcomings with it and how well it adapts all these in the same pot is what determines its survival in the world of coffee brewing. It has been a market leader enjoying big financial support from its parent company Green mountain coffee that has propelled it to this level. Facing litigation from its rivals is not the best way to go as it could turn sour to the company, and the best advice would be to have the arbitration as they would have the best deal that would be advantageous to all companies. Protecting one’s copyright is good but not to the extent to drive, others out of the market, and proper strategies should be in place to ensure that the company engages in fair competition that is legally bound. References Breward, C. (2012). British design from 1948: innovation in the modern age. London: V & A Pub.. Lu, W. (2013). Proceedings of the 2012 international conference on information technology and software engineering software engineering & digital media technology. Berlin: Springer. Rao, S. (2010). Everything but espresso: professional coffee brewing techniques. S.l.: Scott Rao. Close up. (2013, December 16). Keurig Introduces Customized College Brewers. Entertainment Close-up , 1, 50. Close up. (2014, February 3). Green Mountain Coffee Roasters Rolls out Next-Generation Keurig Carafe Innovation. Entertainment Close-up , 1, 50. Read More