What is Green Mountain's Business Model? What might you see as strategic issues for this company?

Business Model GMCR's business model was based on the classic razor-razor blade strategy. The company sold its Keurig brewers at or near cost and sold its K-Cups at a high margin. GMCR operated its business in three segments: the specialty coffee business unit (SCBU), the Keurig business unit (KBU), and the Canadian business unit (CBU). Each business unit produced and sold coffee, tea, and other beverages in K-Cups, and whole bean and ground coffee in traditional bags; they also produced and sold Keurig brewers. Their products were sold to retailers, distributors, and directly to consumers. The three segments marketed products to the at-home (AH) and away-from-home (AFH) markets. In addition to producing and selling products on their own, each division also worked with licensed partner companies to produce and sell brewers and K-Cups. The company earned royalty fees from these licensees for each brewer or KCup sold. Licensees sold K-Cups directly to retailers, distributors and other third parties, and to GMCR for resale to other customers. All Keurig brewers were supplied by a single manufacturer in China, and almost all orders were processed by M. Block \& Sons (MBlock), an Illinois-based supplychain management and distribution company. 14