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Running head: MYSTIC MONK COFFEE

Mystic Monk Coffee

MYSTIC MONK COFFEE

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Mystic Monk Coffee

Mystic Monk Coffee (MMC) is a business that was started by a group of 13 monks led by
Father Daniel Mary, the prior of the Carmelite Order of monks in Clark, Wyoming. MMC
averages about $56,500 per month in its sale off specialized coffee. Its cost of sales averaged
about 30 percent of revenues, inbound shipping costs accounted for 19 percent of revenues, and
broker fees were three percent of revenuesfor a total cost of goods sold of 52 percent.
Operating expenses such as utilities, supplies, telephone, and website maintenance averaged 37
percent of revenues. Thus, MMCs net profit margin averaged 11 percent of revenues. Father
Daniel Mary had formed a vision of acquiring a large parcel of land in which he located a 496
acre ranch for $8.9 million and building a monastery with accommodations for thirty monks, a
retreat center for lay visitors, a Gothic church, a convent for Carmelite nuns, and a hermitage
(Thompson, Peteraf, Gamble, Strickland III & Jain, 2014).
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 MMC? What is
the mission of the Carmelite Monks of Wyoming? Father Daniel Mary has established a
future direction for the Carmelite Monks by wanting to recreate Mount Carmel in the U.S. Rocky
Mountains. His vision for the monastery is to transform the small brotherhood of 13 monks
living in a small home used as a makeshift rectory into a 500 acre monastery that would include
accommodations for 30 monks, a Gothic church, convent for Carmelite nuns, a retreat center for
lay visitors, and a hermitage. Father Daniel Mary does not have a clear vision for MMC other
than wanting to use the income from MMC to fund the purchase of land for the new monastery.
Although he stated that with the purchase of a new larger roaster capable of producing 130pound-per-hour more to increase the production; he still shows no clear vision on how to achieve

MYSTIC MONK COFFEE

the maximum production of the equipment. If you were to compare Father Daniel Marys vision
of wanting to make more money through MMC to Howard Schultzs vision for Starbucks on
how he wanted to bring the Italian Espresso bar experience to America, which showed the
stakeholders the intended direction of where the company was headed. The main mission of the
Carmelite Monks was to pray and worship God.
Does it appear that Father Daniel Mary has set definite objectives and performance targets
for achieving his vision? No it does not appear that Father Daniel Mary set definite objectives
and performance targets for achieving his vision. The only main goal that Father Daniel has was
trying to raise the funds to purchase Lake Irma Ranch for $8.9 million. It only states that the
monks could purchase a new roaster for $35,000 which would increase production, but there is
really no supporting evidence that the monks or Father Daniel Mary have thought this through on
how to actually achieve more production or the extra man-power that will be needed to achieve
this goal.
What is Father Priors strategy for achieving his vision? What competitive advantage
might MMCs strategy produce? Father Daniel Mary main strategy for achieving his vision is
by relying on mostly charitable contributions to the monastery and from profits received from
MMC. MMC uses high quality fair trade Arabica and fair trade organic Arabic beans which
allows them to produce a variety of blends, roasts, and flavors to appeal to a broad range of
coffee preferences that helps them produce a number of tangible and intangible benefits for their
customers. One of the competitive advantages MMC has is that the Catholic Church has about
69 million members in the U.S. which they hope will spread by word of mouth with their loyal
Catholic customers. Although the quality of MMCs coffee is good, they will not be capable of

MYSTIC MONK COFFEE

sustaining an advantage in the industry. The one advantage that they do have is its monastic
relationship will make it difficult for its competitors to imitate.
Is MMCs strategy a money-maker? What is MMCs business model? What is your
assessment of MMCs customer value proposition? Its profit formula? Its resources that
enable it to create and deliver value to customers? MMCs strategy could be a money-maker
but at the current level of production and hours worked daily to produce what is sold now really
limits their ability to buy Lake Irma. MMCs business model is really suspect, although it has a
compelling customer value proposition; it really never really lays out a clear plan on how it will
actually achieve the increased production needed to raise the $8.9 million. As far as its profit
formula, MMC has no labor expense. The companys cost of sales of 30 percent, broker fees of
three percent, and shipping cost of 19 percent contribute to a cost of goods sold of 52 percent.
MMCs current sales along with 11 percent net profit margin will not allow them to generate
enough in earnings within a reasonable amount of time to raise the $8.9 million. Their resources
would include the purchase of a new roaster to increase production but I feel that because of their
monastic constraint would prevent them from being able to keep up with the amount of daily
production required to deliver value to its customers. The only way that their current business
model would work, is for Father Daniel Mary to scale back his vision and use the revenues to
better support what they already have.
Does the strategy qualify as a winning strategy? Why or why not? With the evidence that
has been shown, MMC with the average monthly income of $56,500 and its loyal following
among Catholic consumers has the potential to have a sustainable competitive advantage. If
Father Daniel Mary and MMC want to see a dramatic increase in sales and earnings to help fund
the purchase of Lake Irma, the business model must be revised.

MYSTIC MONK COFFEE

What recommendations would you make to Father Daniel Mary in terms of crafting and
executing strategy for the monasterys coffee operations? Are changes needed in its longterm direction? Its objectives? Its strategy? Its approach to strategy execution? Father
Daniel Mary must first realize that in order to achieve his goals of building the new Mount
Carmel, that over have the funds needed will have to come from donations. He first must realize
that in order to fully utilize the production capabilities of a new roaster that he will have to
increase the normal six hours of work to 12 hours per day. With the added production and sale
possibilities, MMCs net profit margin could improve from 11 percent up to 19 percent. The
increase in profits could mean a net annual income of $718,000. With that potential annual
increase plus the $250,000 initial donation, his vision for purchasing the land could be achieved
in 12 years. Some other factors that could shorten the amount of time it takes could be to
contract out the production and shipping by a company such as First Colony Coffee and Tea. By
doing so they could gain new followers from that company which would increase revenues.
Companys like First Colony Coffee and Tea has the resources necessary to produce and ship
larger volumes of coffee that would increase their revenues. They may also be able to help get
MMC into other retailer stores that could possibly want to sell that brand of coffee to its
customers. They should try and target more coffee shops with large Catholic populations to help
boost their overall sales. Father Daniel Mary should also look into more advertisement, but by
going into business with a contractor they could possible help them to improve on their current
business model, strategy, and execution.

MYSTIC MONK COFFEE

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References

Thompson, Jr., A., Peteraf, M., Gamble, J., Strickland III, A., & Jain, A. (2014). Crafting
and Executing Strategy: The Quest for Competitive Advantage, Concepts and Cases (19th ed.,
pp. 2-45). New York: McGraw Hill Education.