Verified Document

Green Mountain Coffee The Coffee Industry Is Essay

Green Mountain Coffee The coffee industry is only moderately attractive. The bargaining power of buyers is relatively high for a few reasons. There is a fairly low level of differentiation in the coffee business, so consumers are apt to substitute one coffee for another if the price is not right. In addition, the bargaining power of suppliers is relatively high, since coffee is traded on the global commodities market. Green Mountain does not have the size to move the coffee market, although some competitors like Nestle might. There is only a moderate threat of substitution, since coffee's attractiveness is both the caffeine and the ritual. Tea is the closest substitute, and it is possible that cigarettes could be a substitute, though it is more likely that they will be a complement. The threat of new entrants is high, since there are few serious barriers to entry. This has worked in Green Mountain's favor. The intensity of rivalry with the industry is moderate. Coffee is dominated by a handful of companies, but most are conglomerates who can exit the business. All told, the coffee industry is at best moderately attractive, with medium to high pricing pressures on all sides.

2. In order to generate revenues and profits in this challenging environment, Green Mountain...

The company's coffee is not particularly differentiated, but the methods it uses to bring its coffees to market are. The unique packaging and the brand image that Green Mountain has cultivated contribute to this differentiation, and these sources of differentiation appear to be the main selling points for Green Mountain. Green Mountain is most assuredly not a price leader, but it could be argued that Green Mountain is a niche player. I do not believe that Green Mountain's long-term strategy is geared to them being a niche player, however. I believed that they are seeking to cultivate the mass market, and that makes them a differentiated player. That they support this with multiple points of differentiation only lends credence to this theory.
3. Green Mountain has a unique approach to the coffee business, and is building its brand. The product is also a source of strength, and so is the company's management team. Among its weaknesses, however, include its relative lack of buying power compared with major competitors, the size of its sales force and its relative lack of capital. Green Mountain must succeed as a differentiated player because it lacks the size and scope to compete any other way.

There are some interesting…

Cite this Document:
Copy Bibliography Citation

Related Documents

Kuerig Coffee Systems and the Single-Serve Coffee Market
Words: 1874 Length: 4 Document Type: Case Study

Coffee Roasting Companies Coffee Roaster Companies The single-serve coffee market is the fastest growing of the coffee industry. The case is dated 2004 and in the interim eight years, the industry has changed dramatically -- customers now favors single-serve flavored coffees, the single-serve coffee brewers have acquired a cool cache, and no pre-brewed, pre-prepared, pre-packaged stigma remains. This paper is based on a review of the Harvard Business Review Case Study: Keurig. How

Starbucks Continues to Define Coffee
Words: 2161 Length: 7 Document Type: Essay

Business and Corporate Strategies Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion. The most influential competitive business-level strategy that Starbucks has put in place is differentiation. Starbucks focused on creating an aspirational and consistent brand that would translate to

Business Description Green Delight Is
Words: 2356 Length: 9 Document Type: Business Proposal

The company's numerous small local suppliers will help Green Delight to benefit from efficient production costs, which will further allow the company to introduce available prices. Product Description Green Delight intends to offer a diversified range of prepared and packaged organic foods. The main categories of products that will be manufactured and commercialized by Green Delight include: frozen entrees, sauces, salad dressings, soups, desserts, and snacks. The ingredients used in preparing the

Antigua Guatemala Coffee
Words: 5779 Length: 18 Document Type: Business Plan

Antigua Guatemala Coffee Antigua Guatemala International (AGI) will be a manufacturer and exporter of Guatemalan coffee to Japan and the global. AGI will use a new system in the food and beverage industry to offer Antigua Guatemala coffee in a time-efficient and convenient way. AGI will provide vendors, retailers, and cafes with the ability to buy freshly brewed Antigua Guatemala coffee. It will be a high quality option to the institutional

Analysis and Assessment of Caribou Coffee in Order to Identify a...
Words: 3279 Length: 10 Document Type: Essay

New Marketing Strategy for Caribou Coffee Situational Analysis Company Analysis Strengths Weaknesses Opportunities Threats Marketing Proposal Marketing Mix Product Pricing Placement Promotion To survive firms need to adapt and change in line with the general marketplace. Many successful firm have been able successful deal with dominant competition and high levels of challenge. One firm which faces these challenges is Caribou Coffee, although the second largest coffee house chain in the U.S. it is an underdog when compared to Starbucks, with just over 400

Shifting Trends in the Food
Words: 2541 Length: 9 Document Type: Term Paper

How Fast Food Restaurants are Reacting to the Shift to More Organic Foods: To remain competitive, fast food restaurants have had to turn to innovative products, often redeveloping their product lines, to meet the changing demands of consumers for organic foods specifically, and healthier foods in general. The demand for organic foods has been the mechanism for industry evolution. As noted, McDonalds phased out their supersize menu items, in response to society's growing health concerns. In

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now