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Mystic Monk Coffee Case Strategic Management Lekha Gupta Monroe College
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Introduction The case study is based on the Wyoming Carmelites monastery who decided to start their business named ‘Mystic Monk Coffee’ to support funding for buying the Irma Lake Ranch. The monastery was in Clark, Wyoming which was accompanying only 13 monks and was a 42-acre land. As the Carmelite people started getting requests from more than 500 people to join their monastery, they decided to purchase bigger land that could fulfil all their purpose. The land they found which is about 21 miles from their place is 500-acre and can accommodate around 30 monks and have church inside for praying purpose. The price for the land was $8.9 million. The monks could get few hundred thousand from donations but still they needed better option to get enough funds for the land. They came up with the idea of selling roasted coffee to people to collect funds and named it Mystic Monk Coffee. The sales were done first through word of mouth across all over the US. Then the monks opened their own website www.mysticmonkcoffee.com and started selling their coffee online. The green coffee beans were bought from Seattle broker at prevailing wholesale price per pound. The company’s main target audience was Catholics since more than 69 million Americans were members of the catholic church and therefore they understood better the need of monastery expansion and were willing to give donations too. Brazil being the largest producer of coffee in the world with 43.2 million 60 kg bags of coffee last year. The ground coffee in the US retail stores took the largest sales share with 45.8% in 2016. The coffee market is majorly dominated by Starbucks and Dunkin Donuts for those who
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likes to take ready to go coffee outside their home. The majority of people in America likes to drink coffee at home. Company Mission The company’s mission is to meet the requirements of funds needed to purchase the land that would fulfill all their monastery’s purposes. The main focus is through the Mystic Monk Coffee’s revenues and the donations received by the monks for their monastery. Their main goal is to reach the financial requirements of $8.9 million to buy the property that accommodates 30 monks, a gothic church, a convent for nuns, a retreat center, a hermitage. Company Objective To reach the goal of financial requirements which is $8.9 million by generating enough revenues from Mystic Monk Coffee company and donations to purchase the land. Vision Strengthen the whole church in America and a spiritual oasis for America. A spiritual oasis for Monks, Nuns and priests. Father Daniel Mary wants to provide better life to their people in his monastery-a peaceful secluded life by worshipping their God for lifetime. Company Strategies The mystic monk coffee will be targeting the catholic population of America since they will be understanding the need of buying the property and will be willing to help more by donations. Also, Catholic population in America is four times of all the Christians in America. They are buying the high value coffee beans from Seattle at fair trade value. They are usually
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selling their roasted coffee through the website and sometimes taking orders over the phone. They also started selling their coffee to churches and coffee shops in their locality to expand their business model. Mystic Monk Coffee’s customer value proposition is a saying to their target customers that ‘use their Catholic coffee dollar for Christ and his Catholic church’. SWOT Analysis High quality Fair trade/ Organic Arabica coffee beans. They are also offering different flavors, blends and varieties of blends in coffee. Therefore, they are targeting so many people with different kind of tastes. They are also selling other stuff on their website like Coffee mugs, T-shirts, CDs, gift cards. These are all the strengths of their company. Talking about the weaknesses, they are limited to produce only 540 pounds a day since, there are only few monks who are working to produce the coffee blends. Also, the manpower is less and they can only spend 6 hours in a day to work on mystic monk coffee because they are very much devoted to the prayers they do. Talking about the opportunities, since they are targeting large number of Catholic Americans, they can get help from them in the form of donations. Since, large number of Americans prefer their coffee in home, therefore, this company has greater opportunity to sell their ground coffee to these people. They are also providing coffee to people who have health and social concerns, therefore it’s a good opportunity for them to sell their organic coffee. The threats could include the competition from these dominating companies like Starbucks, Dunkin Donuts. Also, the coffee they provide is premium quality which is little
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expensive. Also, since the coffee comes with their religious background therefore, people from different religions may not be that much interested in buying the coffee.
Financials of Mystic Monk Coffee tells that they have the Net Profit margin of only 11% which is very low for them to meet the goal. On an average, they are only making profits of $6,215 per month which is very low. The 540 pounds-per-day could be put in 12 ounces bag this would average about 45 bags of coffee per day that could be sold. These 45 bags could give profits up to $448 per day. Now they are planning to purchase new roaster which is 780 pounds per day if they work for 6 hours a day. This roaster can help them increase their sales 6 times. That means their annual sales could go up to $450,000. The monks should also negotiate with suppliers, carriers, etc to make the costs go down from 52% to 48%. Economies of scale will play in role in lowering operating expenses from 37 percent to about 33 percent since the overall cost per unit will be decreasing with the new number of units being produced. Locally roasted coffee is a huge fad right now. Also since they are monks it adds a certain mystique to the coffee, making it an even bigger seller. Their strategy is a winner especially if they invest in the larger roaster and continue to expand their business. Mystic Monk Coffee’s business model is to sell coffee to support their monastery. Mystic Monk Coffee prides themselves on hand roasted coffee, they want to spread prayer and meditation through the sales of their coffee. Mystic Monk Coffee’s profit formula is to continue to sell more coffee, through the use of additional marketing and purchase of a larger roaster. Mystic Monk Coffee offers a unique product that capitalizes on the trendy specialty coffee lines. They have a lower overhead
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than many other businesses since they are a religious business they do not have lease fees or salaries to pay which allows them to expand their product with a little bit of work. Mystic Monk Coffee’s business strategy is qualified as a winning strategy because the business (MMC) provides quality products that will attract loyal coffee consumers to their brand. The business also upholds potentiality in expanding their sufficiency of producing more coffee, as well as distributing them. Assessing their plan of purchasing a new coffee roaster that is large enough, they’ll be able to increase their coffee production. If they start to apply their plan of producing more, then their profit will really increase since they have the edge to compete in the market because they are known to produce specialty coffee which consumers are willing to pay a higher price (because MMC is made out of fair trade organic Arabic beans-just suitable for the consumers’ health and social concerns).
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Conclusion Father Daniel Mary’s plan to collect enough funds for the Irma Lake ranch by starting their coffee business and receive donations for expanding their monastery. They are trying to buy new brewer with higher capacity to increase their production and it will help them get more revenue than before. The Carmelite Monks needs to have large production of their coffee to meet their requirements of Net profit margin $8.9 million. Their idea to reaching out local stores and Catholic churches can be a good source for getting help from people. They might get enough funds by donations as well because the people will understand the value behind their coffee business. They provide healthy and best organic coffee and targets Catholic population of America which is four times of other religions in America. Recommendations Father Daniel Mary should increase the production of their coffee either by buying larger size of roaster or by increasing their manpower because it seems very difficult to reach their goal with the current amount of coffee being produced. They may need to negotiate with their suppliers and carrier company to lower down the price so that net profit margin increases. They really need to decrease their cost of production which is very high right now. They can also increase their business by doing international sales and asking for donations worldwide. They should sell their coffee in local retail and grocery stores. They may franchise their coffee business and make more profits instantly by training other staff. The people who are willing to join their monastery can work in the franchised store dedicatedly.
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References Buy Coffee Beans Online | Delicious Flavors. (n.d.). Retrieved January 17, 2017, from https://www.mysticmonkcoffee.com/ Carmelite Monks | Cloistered Carmelite Men's Monastery | Vocations. (n.d.). Retrieved January 17, 2017, from http://www.carmelitemonks.org/ Kenney, J. P. (2012). Mystic and Monk: Augustine and the Spiritual Life. A Companion to Augustine, 284-296. doi:10.1002/9781118255483.ch22 New Mount Carmel Foundation, Inc. (2013). Welcome to The New Mount Carmel. Retrieved from http://www.newmountcarmelfoundation.org/ Zuhlsdorf, J. (2015, August 11). Wyoming “Mystic Monk Coffee” Carmelites – Progress with their monastery! Retrieved from http://wdtprs.com/blog/2015/08/wyoming-mystic-monk-coffee-carmelites-progress-withtheir-monastery/ Wei, F., & Tanokura, M. (2015). Organic Compounds in Green Coffee Beans. Coffee in Health and Disease Prevention, 149-162. doi:10.1016/b978-0-12-409517-5.00017-6
