The Keurig coffee system - Case Study Example

a) The Keurig coffee system was modelled after Starbucks’ business strategy in an attempt to capitalise on America’s growing love for premium coffee. In this model, emphasis is on the freshness of the quality of the coffee the K-cup produces. The Keurig system in office coffee in this case is attractive given that it can retain the freshness of the coffee without mixing the flavours. This system is characterised by short set-up times and quick brewing times. The most notable advantage of this system is that in as far as premium coffees are concerned, even the coffee-conscious employees would prefer to use the brewer in the office rather than running around in search for coffee from established brands like Starbucks.

The system also offers variety which is the reason why it can be safely argued that it is attractive in the office coffee market. Besides the threats offered by the OCS, the uniqueness of the Keurig system is a competitive advantage which makes it distinct from the other premium coffee brands given that an effective marketing strategy is rolled out. Wastage is minimised through the use of this system and higher quality and assortment are also two factors that make this system attractive in the office coffee market. b) The advise that can be given to Nick Lazaris concerning his dealings with MTS (K-Cup filling machine manufacturer) is that they should agree on the delivery of the first consignment then rescind the deal as it is likely to hold the project at ransom given that this dealer is trying to take advantage of the new business venture.

The manufacturers are short changing him from the initial agreement because they have realised that they can earn more money out of the deal. When people enter into an agreement, they have duties to fulfil which are legally binding and should there be any changes, the parties involved should reach a consensus not to short change each other out of the blues. The price goal for the manufacturing of the K-cups should remain fixed at $700 000 and steps should be taken not to hand over the manufacturing rights to this company as there would be likely chances of encountering problems with regards to intellectual property rights.

The strategy he should take is that he can contract a serious organisation in the future which does not shift the goal posts while at the same time maintaining a firm grip on the system they have designed. Giving the rights to control the system to the third party has some complications since it will raise legal issues such as intellectual property rights. c) The selection of the vendor for the brewing machines should be based on the capability of the chosen party to meet the demand of the required order and this must correspond with the available financial resources that can be disposed at that particular moment.

Given that this is a project that is still in its early stages, Keurig should ensure that they do not overspend on the required equipment as this would negatively impact on their operations. Without operating capital, there are likely problems related to viability of the organisation that can be encountered along the way hence it is advised that careful consideration should be taken when choosing a vendor so as to avoid falling into a trap of dealing with parties that are after money as well as taking advantage of the situation obtaining on the ground. d) Keurig should first introduce the system bit by bit to the office coffee service market given that this is not a very new product in market.

There are other competitors offering premium coffee and in order for this organisation to penetrate this market, there is need to first conscientise the targeted consumers about the benefits of the system as well as its uniqueness. Essentially, the purpose of business is to satisfy the needs of the customers profitably and this is a process which should not be rushed as it can be costly to this organisation. Penetration of this particular market should be done stage by stage where the response of the customers can be carefully assessed so as to ascertain the effectiveness of the system in this segment. e) There is need to review their premium prices in as much as home coffee market is concerned.

Consumers in this segment can afford to buy prestigious kitchen appliances such as espresso machines and measures to distinguish the brand from other products should be put in place. It will become easier to penetrate this market after first establishing the brand in the office coffee market. When this brand is successful in the office market segment, the people who work in the offices can play a major role in spreading the message to their counterparts in their neighbourhoods which will be an effective marketing strategy.