Corporate-Level Strategic Alternatives for Keurig Dr. Pepper (Keurig)

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 adva...