Tag Archives: Lyft

Cases

Why Americans stick to Keurig while the world prefers Nespresso

Leave a comment

After arriving in California, I was struck by a coffee pod brand completely unfamiliar to me: Keurig. Despite owning a Nespresso coffee machine at the office and a De Longhi espresso machine at home, I was surprised that I had never seen or heard about Keurig before.

In California, Keurig machines are everywhere. The brand holds 41% of the single-serve coffee machine market in the United States and is estimated to have three times the sales of Nespresso nationwide.

However, Nespresso is the leading coffee capsule brand in most other markets. In Korea, it dominates the coffee machine market with a 52% share.

The biggest advantage of Keurig is that many coffee companies produce pods or capsules compatible with its machines. Brands like Starbucks, Peet’s Coffee, and Dunkin offer options for Keurig users. Additionally, Keurig machines and K-Cups are generally more affordable than Nespresso machines and capsules.

However, Nespresso has gaining market share in the United States. Since introducing the VertuoLine system, which brews full-size coffees in addition to espresso, Nespresso increased its US market share to 14.4% in 2023 up from 11% in 2022. During the same period, Keurig’s share declined from 56.2% to 53.1%. The competition between the two brands is intense and dynamic.

Does this mean cultural differences explain their dominance in different markets? Do Californians value variety and quantity, while Koreans appreciate premium experiences?

Cultural differences are unlikely to be reasons. The real explanation is much simpler: people rarely switch from the brand they first encounter. Californians often start with Keurig because it is the most accessible option, while Koreans are introduced to Nespresso through advertising. Once preferences are formed, they tend to stick.

Each brand’s popularity may not be driven by taste or luxury but by who enters the market first. This is why Uber holds an advantage over Lyft in ride-hailing services and why Waymo continues to thrive while Cruise failed in the self-driving car industry.

***

Reference

Carpenter, G. S., & Nakamoto, K. (1989). Consumer Preference Formation and Pioneering Advantage. Journal of Marketing Research, 26(3), 285-298.

Examined whether pioneering advantage could arise from the process by which consumers learn about brands and form their preferences (PFs). In 2 experiments with 103 MBA students, hypothetical emerging markets were constructed, varying the order of brand (computer software packages or down quilts) entry across Ss and the types of competitors that subsequently entered the market. Analysis showed that PFs were influenced by the order of brand entry. Moreover, the PF formation process produced a PF structure that made a pioneer’s market share largely invulnerable to competitors, even if switching costs were minimal and brands could reposition.

Cases

Uber and Lyft: More than just a ride

7 Comments

At San Jose International Airport, app-based ride share services like Uber and Lyft dominate the curbside scene. Travelers lining up next to the Uber signs look for their cars while taxis become rare.

During the CES 2025, the Uber/Lyft pick-up area at Las Vegas airport was also crowded with people eager to check in their downtown hotels.

Similarly, at Stanford University Hospital, designated areas show that ride share is now mainstream in California.

While many view ride hailing services such as Uber and Lyft as modern conveniences replacing taxis, I see them as cafes such as Starbucks or Tim Hortons where people meet and talk. Over the past two months, I learned a lot about California from numerous drivers.

Some drivers were quiet, but others shared their stories. One driver at San Jose said he worked as a software marketer for 20 years and remembered meeting Steve Jobs. Another driver at Mountain View worked two jobs to support his family. A driver in San Diego was a history teacher driving to make ends meet. Another in LA said he was preparing a birthday party for his son.

In the US, many people do things by themselves and might feel lonely. But inside these “moving cafes,” there is a chance to meet someone and talk. It might help people feel less lonely for a short time.

***

Reference

Talmage, C. A., Knopf, R. C., Wu, T., Winkel, D., Mirchandani, P., & Candan, K. S. (2021). Decreasing loneliness and social disconnectedness among community-dwelling older adults: The potential of information and communication technologies and ride-hailing services. Activities, Adaptation & Aging, 45(2), 89-117.

This study explores self-reports of 241 older adults (aged 63–95) regarding loneliness and social disconnectedness, and the potential for information and communication technologies (ICT) and ride-hailing services to mitigate these phenomena. The samples are drawn from four older adult living communities in Maricopa County, Arizona. Lonelier older adults and older adults desiring greater social connections with friends, family, and outsiders appear to use ICT less and might benefit from ride-hailing services more than their less lonely and more socially connected counterparts. These findings are nuanced and depend on ICT device, type of ride-hailing service, and purpose of use. While desires for ride-hailing services were generally low, these services show promise in alleviating loneliness and increasing social connectedness, especially as older adults prepare to cease driving. Advice for implementing interventions and strategies to decrease the loneliness and increase social connectedness of community-dwelling older adults is elucidated and shared.