Keurig Essay

Keurig was established in 1992 by Ian Greenwood and Peter Dragone in the aim of bringing new technique for brewing coffee. At the beginning, Greenwood intended to create portion packs of premium coffee which could stay fresh inside. And they choosed  “Keuring” (“excellent” in Dutch”) as the name of their company. In 1995, MDT and Food Fund invested $1 million (45% of stake) after they rejected Keurig in 1993. In that time,  Larry Kernan was appointed as the Chairman in order to prevent company from potential problem.Due to the Ian’s lack of bussiness skill and management, Peter Dragone replaced Ian Greenwood as the New CEO of Keurig. In 1996, MDT and Food Fund added another $1 million invest in Keurig and owenership raised up to 58%. In June of 1996, Ian was fired because he is diffcult to collaborate with other teammates. Nick Lazaris, has experience in consumer products industry, became the CEO of Keurig in February of 1997.

Lazaris and board of directs refined Keurig’s overall business model and reassessing the concentration of company(Customers, Channels and Distribution. First of all, Chris Stevens,Keurig’ Vice President for Sale and Marketing, started to develop Office Coffee System(OCS) which could generate at least $1.4 million each from 1,700 OCS distributors. The second action was pushing their product into Food Service such as restaurants, convience stores and other establishments. Furthermore, they also planned to enter the consumer market although this segment could present new puzzles because of the disconnection bewteen where to buy and which coffee to buy.

Beside, Keurig is facing a strong competition from several large companies such as Filterfresh,  Café System 7 and Flavia, each of them has their competitive advantages.  During the development of the K-Cup Packaging Line, the trouble appeared which is their manufacturing partner MTS required Keurig pay additional $180,000 for the first unit. After this, Keurig started to find possiblity of contracting with another vendor to make next two packaging lines. In April Keurig management assesed their sourcing options such as Pilgrim(would delay 2 months), Quantum Industries( a quarter late) and Amalgamated Technologies( 4 months later). At the end, Lazaris and Sweeney intended to build a long-haul with suppliers and.