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Strategic Choice and Evaluation

The purpose of the paper is to evaluate alternatives an organization must consider to realize growth. Apart from grand and generic strategies, the paper illustrates that most organizations use directional, adaptive, market entry, competitive and implementation strategies. The paper will identify the best value discipline, generic strategy, and grand strategy for Keurig, a coffee maker company situated in the United States.

Strategic Choice

Keurig is one of the leading companies of single cup brewing systems in the United States. Its brewing systems combine both the pressurized hot water brewer and the varieties of the k-cup portion packs (Anja, 2009). The feature is designed to preserve the products freshness. Grand strategies combine the stability, retrenchment, expansion, market development, concentration, innovation, product development, vertical and horizontal integration, joint venture, concentric and conglomerate diversification, liquidation and divestiture strategy (Hiyappa 2013). All these strategic alternatives are assumed as grand strategies. Similarly, goals, functional strategies, and policies are also referred to as grand strategies.

The goals of Keurig are to grow the brewer sales in all the three channels and also further increase the awareness of the proposition value among the customers (Anja, 2009). Alternatively, Keurig implements an environment management system whose purpose is to foster efficiency. Several organizations usually do so for strategic and economic purposes, and while doing so they fail to acknowledge the fact that these purposes may require various levels of EMS (Anja 2009). Moreover, organizations fail to consider the process through which their employees among other stakeholders will come to accept the new changes that are to be implemented. This has led to systematic failures. The company should therefore, implement the change management strategies that will determine how to implement the change and how the employees are to receive them (Skarzynski and Rufat-Latre, 2011).

In terms of the functional strategies, the human resource department should converse the changes to the human resources and ensure that the employees are taught on the changes in order to overcome the resistance to change. The human resource department makes sure that the company runs successfully hence, the importance of Keurig involving them in the communication of the changes including the implementation part (Skarzynski and Rufat-Latre, 2011). Thus, grand strategies offer a key guideline for the specific strategic and functional business tactics. It concentrates on raising sales of the current products with regards to the distribution channels.

Keurig embraces a grand strategy while marketing the current products by changing the promotion strategy. The company sends out coupons to all residencies that provide some of their products to the customer at a discounted price to create customer loyalty (Skarzynski and Rufat-Latre, 2011). Consequently, the company is ranked as the most influential brewing companies in the U.S. The company should continue focusing on environmental analysis because an unstable environment raises business risks.

Generic strategies need certain skills, resources, and organization arrangements in order to successfully implement the business. Small businesses focus on low costs while at the same time maintains product quality (Hiyappa, 2013). Cost leadership, differentiation, and focus are the three common generic strategies while market penetration, product development, and diversification are the grand strategies. Due to the level of competition and market risks, the organization can use the product differentiation strategies in marketing the brewing system based on speed and convenience. In addition, the pricing strategy should be implemented as it does not have a direct impact on the customers. The price can range from $129-199.

Retail marketing looks to be the best strategy in marketing the brewers directly to the consumers. The company should however, exert more effort on the product’s advertisement because the products are designed for home use as well as business/office use. This will consist of TV commercialization including the use of radios and magazines (Rubin 2012). The company can also adopt the roasters public relations to initiate the new brewing systems in the market. This result may be that the company is unfamiliar to consumers, but the brands are made popular.

Evaluation

The company has been able to manage and develop fits brands to a high quality level that the competitors have encountered difficulty in trying to imitate the company (Larry, 2008). The skillful management of the brands has enabled Keurig to gain competitive advantage. Under product development, the company has to hire and maintain several employees in order to run successfully. The company has been able to realize success in the American market because of the skills that are applied during product development (Larry, 2008). Notably, other companies take years to gain sustainability, thus an advantage to the company. As a result, Keurig’s achievement is based on product excellence and the strategies.

There was a deficiency in the company’s nationwide policy due to the lack of an action plan. This changed when the company recognized that is not only required a national approach to its strategy but also an approach that aligned with the American context (Adams, 2005). This was the only way to continue being competitive in the market place. As a nationwide company, it had to solve the environmental problems in a way that was consistent with its national strategy. The company had to adopt a policy of corporate social responsibility in Africa as way of giving back to the society. This normally helps in uplifting the corporate image resulting in any brand’s famousness (Adams, 2005). The company has taken its role in social responsibility by contributing to the societal welfare within which it operates.

Keurig’s commercial models are currently in thirteen percent of American workplaces and moiré than twenty five percent of those in Boston (McGinn, 2011). During the 2010 financial year, the company sold more than $330 million worth of brewers ranging $79.95 to $249.95 each. The company’s real money though, emanates from its “K-Cup” coffee capsules selling more than $800 million worth of those in 2010. The company is currently owned by Vermont-based Green Mountain Coffee Rosters, continues to rise (McGinn, 2011). The top management admits that they are surprised by Keurig’s success. They never expected it to be so broadly accepted as it is currently. The company’s challenge is figuring out how to maintain the demand.

The primary patents that protected Keurig from competition expired last year and that enabled imitators to start selling low-priced knock offs. In terms of differentiation, the first thing to be realized on entering the six-storey glass building just off Route 128 in Reading is a wall unit which contains fifty six different kinds of k-Cups (McGinn, 2011). These are made from flavored coffees to chaise to energy drinks, and beside them is a counter lined with different Keurig brewers.

Ginter (2013) states that an organization can adopt directional, adaptive, market entry, competitive, and implementation strategies. Such strategies should be sequentially addressed with each subsequent decision more specifically defining the organizational activities (Ginter, 2013). Directional, adaptive, market entry, and competitive strategies constitute strategy formulation and shows how the organization will define and try to attain its vision and mission. Implementation strategies consist of the goals and plans for the organizational entities to attain the strategies (Ginter 2013). Therefore, an organization must first set up and arrive at a consensus on its vision, mission, core values and strategic goals. These are referred to as the directional strategies.

Keurig’s mission is to be the leader within specialty coffee industry; this is by selling of high-quality coffee with an innovative renowned coffee brewing systems; that will provide a superior coffee experience. This is followed by the adaptive strategies, which must be identified and are the channels to attain directional strategies (Ginter, 2013). Adaptive strategies deal with the scope of operations and specify how the organization will reduce and expand among others.

Conclusion

Generic strategies need certain skills, resources, and organization arrangements in order to successfully implement it. Cost leadership, differentiation, and focus are the three common generic strategies while market penetration, product development, and diversification are the grand strategies. Due to the level of competition and market risks, the organization can use the product differentiation strategies in marketing the brewing system based on speed and convenience. In addition, the pricing strategy should be implemented, as it does not have a direct impact on the customers. This means that the company should make use of generic strategies in order to gain competitive advantage.

References

Adams, J. (2005, Aug 01). Keurig gives a media taste of its coffee-brewer superiority. PRweek,

8, 19.

Anja, B. (2009). The SWOT Analysis. GRIN Verlag, Publisher.

Ginter, P. (2013). The strategic management of healthcare organizations, USA, John Wiley & Sons.

Hiyappa, B. (2013). Strategic management and business policy, Booktangote.

Larry, B. (2008). Green Mountain Coffee Roasters, Inc. House wares Executive Magazine.

McGinn, D. (2011). The Buzz machine,

Rubin, B.F. (2012, Nov 28). Corporate news: Green mountain stock soars. Wall Street Journal.

Skarzynski, L., and Rufat-Latre, P. (2011). Lesson to jumpstart disruptive innovation. Strategy & Leadership, vol. 39, No. 1, 5-10.

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