Mystic Monk Coffee PDF

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Case #1 Mystic Monk Coffee 1. Father Prior has established a future direction for the monks, he intends to grow the monastery by purchasing the Irma Lake Ranch through profits from Mystic Monk Coffee. His vision for MMC is unclear according to the case, but he knows they have a competitive advantage over some secular businesses. The mission of the Carmelite Monks of Wyoming is to live a life of prayer and worship. 2. He has objectives and goals, but I would say that according to the information in the case, he has not set definitive objectives or performance targets.

3. Father Prior is under a couple constraints when it comes to achieving his vision – financial and adhering to the monastic lifestyle. To hit the financial goals, they use high quality coffee beans, so they can price their product on the premium end. Additionally, they will provide a variety of flavors as well to appeal to different consumer preferences. They also received a donation that will give them a decent start in acquiring the $8.9 million needed to buy the ranch. As far as the constraints that the monks live by, that actually gives MMC a competitive advantage. Knowing that the product was roasted at a monastery by monks is different than any other product. Also, MMC is able to use the influence of the large following of the Catholic church to gain sales. 4. MMC is definitely a sound company with compelling marketing, but I would not call it a money maker. 11% net profit margin will not accumulate $8.9 million very quickly. There is the opportunity to purchase the larger roaster, which would up the production capacity to 130 lbs per hour, which is almost what MMC is currently operating at per day due to the monastic constraints that Brother Elias operates under. (He can work 6 hours per day, their current roaster can produce 540 lbs per day OR 22.5 lbs per hour (540lbs / 24 hrs = 22.5lbs/hr) which ends up equaling 135lbs per day.) If the monastery purchases the new roaster, the new production value is essentially 6 times what they were previously operating at. The labor that would go into this large of an increase would almost be impossible to maintain due to their monastic duties. The business model itself is quite sound, but I do not think the goal is realistic, considering they are basically profiting $5,000 per month. 5. A winning strategy must pass 3 tests: the fit test, the competitive advantage test, and the performance test. a. The fit test – I think it passes. The market is booming with specialty coffees, and the growth rate of 32% from 2000-2007 to get to $13.5 billion speaks for itself. Additionally, the influence that the Carmelite monks may have over the Catholic church is notable as well. The congregation will likely support the cause and continue to do so.

b. The competitive advantage test – Pass. The product is unique as mentioned above in the sense that it is made at a monastery by monks. The company has $56,500 in monthly sales which is proof that it is popular. c. The performance test – This is 50/50 for me. Objectively, yes, the company is performing well. 11% profit margins could probably be increased with some tweaking and increased demand. The other side of that is performance in regards to the final goal. I would say no that the company is not performing at a level that would be considered sufficient to eventually reach their goal of purchasing the ranch. Overall, I would say that the strategy is a winner. The last test is the only one that I am not sure it completely passes. 6. Based on my understanding of the case, it seems as though the foremost goal is to be able to purchase the ranch to make the New Mount Carmel. With this being on the forefront, my recommendations will revolve around quickly increasing profits to reach that goal. (I will add here that if I felt like the ranch was not of such importance, I would say to lower their goals for the time being.) Some of my recommendations are as follows: a. First, I would really utilize the network of Catholic followers to see if they will contribute to the New Mount Carmel Foundation. The donation aspect could really help knock a chunk out of the funds needed. b. Second, purchasing the new roaster will help as well. Based on the numbers discussed above, in simple terms, the profits could increase by a factor of 6. c. Third, and in support of the second point, Father Prior will absolutely need to hire additional help to support the new roaster and labor involved. d. Lastly, I would decrease the 18% commission to websites, as that number is just far too high and not sustainable....