Green Mountain Coffee Roasters Valuation Essay

6324 Words Nov 20th, 2013 26 Pages
Executive summary
Company overview
Business units Specialty coffee Keurig system Canadian Business Unit
Business Model Supply Chain Social Responsibility
Industry Environment
GMCR’s Competitive Advantage Quality, Convenience, and Choice
GMCR’s Growth Prospects National Sanitation Foundation (NSF) Approval Starbucks/Tazo Tea Strategic Partnership Snapple Partnership
SWOT Analysis Strengths Beverage Choice Options Sustainability Image Keurig Business Unit Weaknesses Single Supplier for Keurig Machines Single Order Processing Partnership SEC Investigation Opportunities Collaborations International Expansion Entry into Functional Drinks Market in the US Threats
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GMCR’s primary business model in terms of their growth strategy involves developing and managing marketing programs aimed at driving adoption of Keurig Single Cup Brewer in North American homes and offices. The strategy behind this lies in generating continuing demand for the single serve packs. To achieve this aim, the company sells their AH brewers at, near, or when factoring in selling expenses, sometimes below cost. The company also has licensing agreements with Jarden Inc. (producer of Mr. Coffee brand coffeemakers), Conair, Inc. (producer of Cuisinart brand coffeemakers), and Breville Group Limited under which these companies produce, market, and sell coffeemakers co-branded with Keurig.
GMCR has experienced rapid growth in the last few years, for instance posting a 116% increase in gross profit between the year’s 2010 and 2011. This amazing growth has been driven primarily by the growth and adoption of the Keurig Single Cup brewing systems and related K-Cup sales. In fiscal 2012, approximately 90% of their consolidated net sales ($3,859 million) came from the combination of single serve packs and Keurig Single Cup Brewers and related accessories.
Supply Chain GMCR has roughly just over 7,000 suppliers whom they contract with to be able to provide their high-quality products. As with any retail company, a reliable and resilient supply chain is

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