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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

companys 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 companys mission is to meet the requirements of funds needed to purchase the land

that would fulfill all their monasterys purposes. The main focus is through the Mystic Monk

Coffees 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 Coffees 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 its 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 Coffees

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 Coffees 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 Coffees 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, theyll 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 Marys 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-with-
their-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