Keurig Green Mountain's Merger

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Keurig Green Mountain’s Acquisition of Dr. Pepper Snapple has led to the creation of a newly merged company Keurig Dr. Pepper. This paper will analyze the merger, the nonalcoholic beverage industry that both companies compete in, as well as the strategies that both companies have had prior to the merger and how those strategies change in a combined venture. The overall value of the purchase will be looked at as well as any benefits that can be achieved for the Keurig brand by acquiring Dr. Pepper Snapple.
Keurig Green Mountain’s (KGM) Acquisition of Dr. Pepper Snapple Group (DPS)
On 29th January 2018, Keurig Green Mountain and Dr Pepper Snapple announced that they were to merge through a laid down agreed procedure. Under the approved …show more content…

New firms that want to sell beverages can be attracted by higher returns made by the Keurig Dr. Pepper. The new firms can decrease the profit made by Keurig Dr. Pepper. If the profit falls below zero, it can throw Keurig Dr. Pepper firm out of the market. To avoid this, Keurig Dr. Pepper (KDP) must employ unique strategies on how to create a barrier for entry of new rival firms into the market (Stone, 2018). The KDP has to make all necessary steps to maintain their market share. Such steps include utilizing their creditworthiness to acquire bank loans that can help the firm to expand and dominate the market ( Rahman et al., 2015). The organization can also lower prices of their products to create unfair competition with newcomers. The organization has huge capital to avoid low prices to attract many customers and discourage them from buying from recent firms. Keurig Dr. Pepper should also maintain favorable customer loyalty to ensure that customers will not shift and buy other substitutes from brand new business organizations. KDP will also set differentiated beverages for customers in a great way (Rahman et al., 2015). The uniqueness of their products will create a competitive environment with the other products from the rival …show more content…

Pepper Snapple. However, KGM is the firm that got more power in the newly formed business entity. They had to change some part of their strategy to accommodate the Dr. Pepper Snapple. Contrasting strategies between the two may lead to a better overall strategy if the merger of the two companies proves to be successful. Dr. Pepper Snapple has long operated on the cost minimization strategy as it has tried to stay competitive in the soft drink industry with the likes of Coca-Cola and PepsiCo. Combining this cost strategy with Keurig’s strategy of developing strong supplier relationships and strong core values can move the new Keurig Dr. Pepper company forward in the

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