Corporate-Level Strategic Alternatives for Keurig Dr. Pepper (Keurig)
The purpose of this assignment is to summarize two strategic alternatives for your selected corporation based on individual research and team analyses.
Assume that you work as an analyst team lead at the company you have been studying throughout this course, and you are issuing a high-level communication to company CEO that summarizes your analysis. Based on what you have discovered regarding environmental scan issues, financial analysis issues, industry trends, etc., communicate a plan for implementing two strategic alternatives in an executive summary of 750-1,000 words.
Include the following in your response:
1. Based on your work this semester, synthesize and present key analytical findings about where the company is exceling and how or where it can improve. Refer to both your CLC and individual analysis in your summary.
2. Propose two creative yet viable corporate-level strategic alternatives. Critique the pros and cons of each alternative utilizing your analytical findings.
3. Select and defend the pursuit of one of your two viable alternatives. How does this alternative align with the firm's mission, vision, and values? How can management employ this alternative to create competitive advantage for the firm? Suggest next steps.
4. Based on your analysis, identify a business unit or activity within the corporation that you would suggest defunding in order to finance your strategic alternative, or provide an alternate funding source. Defend your selection.
5. Given your overall proposal, how do you suggest the company promote its culture, vision, and mission to maximize its chances for success in the industry? How might the company develop its servant leaders to endorse and exemplify tenets of the Christian worldview (CWV) in the workplace? Propose and defend at least one significant leadership initiative.
Keurig Dr. Pepper (Keurig) – Executive Summary
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Executive Summary
Keurig Dr. Pepper (Keurig) is a reputed American coffee appliance that captured a substantial market in the United States of America (US). The industry trend has been favorable for Keurig since the pandemic. The industry statistics suggest that more than 3 million American households purchased products manufactured by Keurig based on convenience and retail tech offered by the brand. Keurig reported a 10% increase in market capitalization, which is a positive sign to progress during shifts in social and economic paradigms (Gelski, 2021). According to (IB, 2021), American customers embraced K-Cup® brewers as a progressive trend during the pandemic. K-Cup® became a signature of modernization for households and corporate employees. The company installed approximately 25 million Keurig and K-Cup® functional beverage solutions in homes and offices. The market reach increased to 42% in FY2021.
The overall analysis indicates that Keurig operates in a competitive business environment. The COVID-19 outbreak worldwide introduced a paradigm shift in the global consumer market. Consumers are shifting widely to online platforms for purchasing routine products and utilities for household consumption. Besides, the strategic analysis identified that households’ demand for functional beverages, such as coffee, is rising worldwide. Customers are willing to pay a price premium for product convenience offered as a core value by household brands. Keurig adds value to functional beverages by making them ready-to-drink commodities for households.
Besides, Keurig must understand rising threats in the business environment. The company is operating under a competitive environment that contains internationally reputed brands. Consumer demands are high for functional beverage solutions, while the supply chain activities are strained to maintain brand upscaling in the long run. Keurig should realize the challenges emerging in the business environment before reallocating resources and pursuing expansion plans.
Additionally, Keurig operates under financial viability. The ratio analysis denotes that Keurig has 17% NPM, which is ideal for the current market situation. Keurig has a suitable current ratio, which needs improvement in the upcoming fiscal period to avoid liquidity challenges. However, the company has a debt-to-asset ratio of 0.51, which is alarming for investors. Keurig operates with more than 50% debt that could compromise operational sustainability during market penetration or expansion. Keurig should consider using profitability advantage to reduce deficits and improve working capital to remain operative in the long run.
Keurig must continue the momentum by capitalizing market and strengthening customer interaction through innovative marketing campaigns. Keurig has proposed two corporate-level strategies to accomplish the long-term objectives:
* Explore emerging markets, such as Brazil, Russia, India, China, and South Africa (BRICS), which would reduce coffee sourcing costs while expanding profitability. The fundamental advantage of market expansion is to allow K...