Introduction To HBS Case Study

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REV : JUNE 9 , 2 0 0 4

Professor Paul W. Marshall and Research Associate Jeremy B. Dann prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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Nick Lazaris waited patiently at the stoplight, knowing he had plenty of time to make the early meeting at his Wakefield, MA office. This morning, Lazaris—President and CEO of Keurig, Inc.— would bring his top management team (Exhibit 1) up to date on problems developing in the company’s relationships with two critical vendors. The problems had already caused delays in the full roll-out of Keurig’s revolutionary coffee brewing system.
Whenever he wondered if the term “revolutionary” was a bit too strong to describe his company’s products (Exhibits 2 and 3), he usually found quick re-affirmation of the potential impact the new system—which according to the company’s slogan could produce “coffee house taste by the cup.”
Lazaris grinned when he saw the driver of the car next to his fumbling with a biscotti and a large cup of coffee from Starbucks while talking on a cellular phone. He liked to bring up anecdotes such as
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However, at the closing meeting, some complications arose. “It was unlike anything I had dealt with during all of my time in venture capital,” said MDT’s Kernan. “Peter Dragone pulled me aside and said that he and Dick Sweeney [a product development consultant who was slated to join Keurig full-time when funding was finalized] were having doubts about Ian’s abilities to run the company going forward.”
“It wasn’t a power play,” recalled Dragone. “Ian was a fantastic idea guy, but he wasn’t a businessman. Dick and I just didn’t believe he could be a good manager for a $1 million investment.”
The deal went forward with the management structure intact, although the discussion with Dragone
899-180 Keurig
put Kernan—Keurig’s new chairman—on guard for potential problems. Greenwood chafed under the new arrangement and often disagreed with Kernan on what the firm’s priorities should be. After several months of being stonewalled on information requests and seeing little in terms of

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