The choices that consumers make range in involvement from low to high involvement – we don’t invest...

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The choices that consumers make range in involvement from low to high involvement – we don’t invest the same degree of effort into buying a coffee in the same way that we buy laptops. Many of the choices we make on a daily basis are driven by habit and executed without much thought or feeling. Habits thrive on predictability. However, the market demands growth and competitors are constantly evolving, so many managers focus on continually adjusting and overhauling their offering and brand messages. As a result, a tension often arises. In a reflection, consider the following questions below:

In their HBR article, Lafley and Martin argue that successful firms should strive to develop “cumulative advantage.” In contrast, McGrath argues that habits are important but they are subject to disruption when the industry is unpredictable.
1. What do Lafley and Martin mean by the concept of cumulative advantage? How might it apply to the coffee context?
2. How would you characterize the coffee industry? Is it a classical strategic setting, as McGrath describes in her piece? Or are we at an inflection point?
3. Is Keurig in a good position to capitalize on cumulative advantage? Why or why not?

At the time of the case, thinking about the office coffee market, how does Keurig make money? Who are Keurig's partners? What do they care about? How do they make money?

Keurig is considering a move into the home coffee market, and a major decision point is whether or not to proceed with a single K-Cup for all markets or to create a second product (Keurig Cup) for sale in the home use market. Should Keurig go with a one-product or a two-product strategy? Why?

keurig-nc1wgsqu.docx mcgrath-4ow2yo2t.pdf lafley-martin-2-i2wp1upe.pdf

Jose · Accepted Answer

Management 
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What do Lafley and Martin mean by the concept of cumulative advantage? How might it apply to the coffee context?
According to their definition, "cumulative advantage" is what you gain when a buyer chooses your brand for repurchase with little or no consideration put into the transaction.They write that in the search of a competitive advantage, brands frequently push new features and innovations, which actually lead to the elimination of cumulative advantage. Because it encourages the consumer to think before making a decision, it breaks the habit of picking a brand without thinking.They argue that brands should prioritise cumulative advantage over competitive advantage.
How would you characterize the coffee industry? Is it a classical strategic setting, as McGrath describes in her piece? Or are we at an inflection point?

The choices that consumers make range in involvement from low to high involvement – we don’t invest the same degree of effort into buying a coffee in the same way that we buy laptops. Many of the...

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