FI402B Quiz 3 on Keurig Case Due 10/27/2015.

FI402B Quiz 3 on Keurig Case Due 10/27/2015.
Name(s) _______________________________________________________ Team_____
Submit before class, individually or as a team, keep a copy for yourself, and be prepared to explain in class. Write a word document, double spaced, 12 point (like this document) no more than 4 pages, except for charts, pictures or spreadsheets. Use the case only for all your answers. Keurig Case Discussion Questions, each worth 20 Points for all the parts:
1. Prepare a business model chart showing the members of the Keurig ecosystem and what
their responsibilities are and how they relate to each other.
2. Prepare a value assessment for each member – what profits can they expect from being a
member of the Keurig ecosystem. Assume that there is 1 packaging line supporting 1500
brewers which generate 10,000 K-Cups of demand per year and a royalty of 5 cents to
Keurig (case facts).
3. What advice would you give to Nick regarding his dealings with MTS, the packaging
line vendor? How would you negotiate with them? Which vendor would you select for
the packaging line? – why?
4. What advice would you give Nick regarding the selection of a brewer vendor? Which
vendor would you select? – why?
5. How does the valuation change with the rounds of financing in 1995-1997? How much does management own after each round? What are the roles of the VC’s, founders and management? Are the founders fairly rewarded?