Case Mystic Monk Coffee

Case: Mystic Monk Coffee Assignment Questions 1. Has Father Daniel Mary established a future direction for the Carmelite Monks of Wyoming? What is his vision for the monastery? What is his vision for Mystic Monk Coffee? What is the mission of the Carmelite Monks of Wyoming? Yes, Father Daniel Mary would like to establish “a new Mount Carmel in the Rocky Mountains.” He has a vision to buy a 500-acre ranch, Irma Lake Ranch, to house more monks and create a bigger monastery compound. He has no clear vision for Mystic Monk Coffee, other than to using the profits to help buy the ranch, which has a hefty price tag of $8.9 million. The mission for the Carmelite Monks of Wyoming is to increase the brotherhood from 13 to 30 monks who want to live the rest of their lives in the monastery while understanding, “the reality of the vows of obedience, chastity, and poverty and the sacrifices associated.” 2. Does it appear that Father Daniel Mary has set definite objectives and performance targets for achieving his vision? Yes and no, Father Daniel Mary does not have set performance targets, but he has a set objective to use the profits from Mystic Monk Coffee to buy the $8.9 million ranch. There are plans to grow Mystic Monk Coffee soon, by buying a new roaster and expanding their business model, but nothing specific to support the vision of “a new Mount Carmel,” and officially make it a reality. 3. What is Father Prior’s strategy for achieving his vision? What competitive advantage might Mystic Monk Coffee’s strategy produce? Father Daniel Prior’s strategy is to use Mystic Monk Coffee as a way people can support the Wyoming Carmelites. Those who want to aid in the vision for the new ranch can buy the coffee and accessories. Their competitive advantage is that of using high-quality organic beans to create a range of specialty coffees. By having an established premium coffee business in a growing sector of the retail coffee industry, Mystic Monk can see steady annual financial growth of 32%. 4. Is Mystic Monk Coffee’s strategy a money-maker? What is MMC’s business model? What is your assessment of Mystic Monk Coffee’s customer value proposition? Its profit formula? Its resources that enable it to create and deliver value to customers? Mystic Monk Coffee is a money-maker, but not enough to achieve the Irma Lake Ranch vision. Their business model relies on selling coffee to people with a religious background. A large enough customer base can be created by primarily benefiting from word of mouth by Catholic parishes, in which 69 million Americans are associated. However, singling in on Catholics who drink coffee, can create a more niche market that limits the full potential of Mystic Monk Coffee. The profit formula has a net profit margin of 11%, calculated by all expenses equaling 89%. The creation of a product that uses specialty, premium, fair-trade beans delivers value to customers because of the social and health benefits associated with fair-trade. Alongside that, free shipping with the purchase of three bags of coffee and a “coffee club” for frequent customers, can give much appeal and additional value in comparison to competitors. 5. Does the strategy qualify as a winning strategy? Why or why not? No, this strategy is not a winning strategy. Although there are profits, $75,000 a year is not enough to buy the ranch in a timely matter. With a $250,000 donation and annual income of $75,000, it would take nearly 115 years to have the money for the ranch, therefore making the current strategy defective. Although a group of Cody, Wyoming business owners created a fund to assist the monks’ cause, information about the amounts raised are unknown, and thus should not be relied upon in any way. Focusing on the growing premium coffee market, and capitalizing on people who want to, “use their Catholic coffee dollar for Christ and his Catholic church,” has allowed for success, but not nearly the amount that the monastery is looking for. 6. What recommendations would you make to Father Daniel Mary in terms of crafting and executing strategy for the monastery’s coffee operations? Are changes needed in its long-term direction? Its objectives? Its strategy? Its approach to strategy execution? Explain. The market for coffee beans is there, but Mystic Monk must increase their roasting operations significantly to reach their goal. I would recommend first to expand the market to a larger audience, beyond that of just the Catholic population. I believe many more people would want to support a unique brand that has a worthy mission. That can be done by limiting the referral affiliate percentages and using more money to market Mystic Monk Coffee to a wider audience, like creating social media platforms in today’s age of technology. They could really focus on the wholesale sales nationwide as well. Secondly, I would immediately buy the roaster and add at least a second monk to increase the daily output. By allocating more monks instead of hiring outside employees to help with roasting operations, there is no wage expense and the whole operation stays true to the mission and foundation of Mystic Monk Coffee. There are 150 million coffee drinkers in the U.S., with 89% of those brewing coffee from home. If the net profit margin can be increased by cutting down expenses, an expansion of Mystic Monk’s market to target more coffee drinkers in general, and an increase in the daily output of product, then I believe the vision of buying Irma Lake Ranch can be successfully completed.