AEM1200 Keurig Case - William Ashton Case: Keurig and Green...

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William Ashton Case: Keurig and Green Mountain RoastersCalianne Schmidt[email protected]TA: Jason Steinberg (jss467)[email protected]Keurig, Incorporated, a Massachusetts-based firm aiming to perfect theportion-pack system of brewing exceptional coffee, now faces the opportunity to form alicensing agreement with the premium coffee brand Green Mountain Coffee Roasters.Analysis of the alternatives to a negotiated agreement between GMCR and Keurigindicates that GMCR holds the stronger position of the two. GMCR is a veteran coffeedistributor with experience in business operations of coffee sourcing, roasting, anddistribution. The firm already sells coffee to various distributors and consumers, therebyable to earn profit without collaboration with Keurig. Keurig, however, is merely atechnological company that creates the coffee brewing machines. The company wouldoutsource its coffee even under its own brand, True North. This process would be moreexpensive than GMCR cups by $0.01 while also causing Keurig to incur full coffeeproduction and packaging costs. However, a partnership with GMCR would cause directcosts to be incurred by GMCR and Keurig would not need extra staffing or supplies forits own facilities. Such a partnership would also eliminate shipping costs for Keurig.

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Term
Fall
Professor
PEREZ,P.D.
Tags
KEURIG, Royalties, minimum royalty keurig

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