Mystic Monk Coffee Case Analysis

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?

Father Daniel Mary has established a future direction for the Carmelite Monks of Wyoming which is to expand their numbers and services while continuing their worshipping of God. He wants to re-establish Mount Carmel in Wyoming “for the glory of God” (Turnipseed, 2011, p. 389).

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To achieve this goal, Father Daniel Mary envisioned a larger new monastery accommodating up to thirty monks (as opposed to thirteen) and including a retreat center, a nun convent, and a hermitage on a 500-acre piece of land called Irma Lake Ranch (Turnipseed, 2011, p. 389). However, since the land costs $8.9 million and the monastery currently lacks the necessary funds, Father Daniel Mary plans to rely on the monastery’s coffee business and monks to execute his plan (Turnipseed, 2011, p. 388).

His vision for Mystic Monk Coffee thus assigns primary responsibility to the enterprise in raising the necessary funds while delivering high-quality fair-trade product to its customers. The Carmelite Monks of Wyoming are the final element in Father Daniel Mary’s vision for the monastery. They are to live a life of solitude, prayer, and worship and support the operation of the monastery by producing coffee (Turnipseed, 2011, p. 389).

Does it appear that Father Daniel Mary has set definite objectives and performance targets for achieving his vision?

On the one hand, it appears that Father Daniel Mary has a clear vision and set of goals for his monastery. It is, in a way, true, as he has some definite objectives: he knows which piece of land to buy, he knows what structures he would like to build on it, he knows how many monks the monastery will accommodate, and so on. Father Daniel Mary also recognized the financial obstacle that his planned expansion posed, and has considered the ways to overcome it.

Moreover, he already has some resources – both finances, equipment, and labor – to utilize in his project. At the same time, Father Daniel Mary has not set clear performance targets for achieving his vision. Performance targets are specific, or measurable and observable, goals that an organization needs to achieve within a certain time period (Boyne & Chen, 2007). As of now, the only goal that Father Daniel Mary has set is purchasing the roaster to improve the capacity of the monastery to produce coffee. However, even with the enhanced capacity, it will take decades for the monastery to gather the necessary funds to buy the land. Thus, the plan is not yet actionable and detailed enough.

What is Father Prior’s strategy for achieving his vision? What competitive advantage might Mystic Monk Coffee’s strategy produce?

Father Prior’s strategy for achieving his vision largely revolves around capacity-building of the monastery’s coffee-making equipment. The intended purchase of a new roasting machine will be a significant contribution as the roaster will allow the monastery to produce 780 pounds (130 pounds/hour X 6 working hours) instead of 540 pounds of coffee a day. Moreover, the monks expanded their marketing model to target secular customers and make wholesale sales to churches and coffee shops (Turnipseed, 2011, p. 391). This step is highly important as it allows the monastery to expand their market and potentially reach a broader target audience (non-Catholic coffee drinkers).

Wholesale sales can help the monastery reduce their shipping and delivery costs which currently amount to $128,820 ($56,500 X 0.19 X 12) a year at 19 percent of the revenue. Accounting for almost one-fifth of the revenue, delivery expenses can and should be reduced. Since the coffee produced is fair trade, its quality is the main competitive advantage of the Mystic Monk Coffee’s strategy. The product also has a specific appeal to a particular target audience – Catholic coffee drinkers – who are likely to purchase this particular brand.

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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?

Overall, the Mystic Monk Coffee’s strategy is a money-maker: currently, it yields the profit of about $6,215 a month ($56,500 X 0.11) and, after the purchase of a new roaster, the profit can reach as high as $9,000 ($56,500 / 540 X 780 = $81,600; $81,600 X 0.11). This number is calculated without taking into account that some costs such as the website maintenance expenses and telephone bills are fixed. The monastery will be able to break even within approximately one year after the purchase ($35,000 / 12 = $2,900 a month).

Mystic Monk Coffee uses a direct sales business model whereby it conducts marketing and selling of its goods straight to the customers – that is, via an online store – as opposed to an actual physical location (Belch & Belch, 2011). The company’s customer value proposition is its high-quality fair-trade coffee offered at a rather reasonable price, plus the associated sentiment of supporting a religious organization. It is a solid proposition given its consumption-conscious target segment. However, the profit formula of the company is seriously underdeveloped, as it only reaps about 11 percent of the total revenue. Overall, the organization has enough resources to create and deliver value to the customers, but it needs to improve its distribution mechanisms.

Does the strategy qualify as a winning strategy? Why or why not?

Assuming that the organization operates on a non-for-profit basis, one could say that its current strategy qualifies as a winning strategy to maintain the monastery’s existence. While the profits are comparatively quite low, they suffice to cover day-to-day expenses of the monastery, especially considering that this is not the monks’ primary occupation. The product has a sustainability and authenticity appeal that is currently in vogue, and the entity enjoys a certain degree of customer loyalty thanks to its religious affiliation.

However, given the vision of a new monastery imagined by Father Daniel Mary, the strategy is far from being a winning strategy, if Father Daniel Mary wants to finish the monastery in his lifetime. At the current profit margin, assuming that the monastery does not receive significant donations, it would take decades for the monks to save enough funds to purchase the land. Consequently, the strategy is not a winning one.

What recommendations would you make to Father Daniel Mary in terms of crafting and executing strategy for the monastery’s coffee operations? Are changed needed in its long-term direction? its objectives? Its strategy? Its approach to strategy execution? Explain

To achieve his vision of a new monastery, Father Daniel Mary needs to craft an actionable and measurable execution plan with clear deadlines and performance targets. First of all, equipment purchase is not the only way for the monastery to improve its production capacity. Right now, the monks spend only six hours on manufacturing – while it is understandable that this is not their primary occupation, it is nevertheless possible to introduce a flexible schedule whereby the monks would take turns working and praying so they can still do both. Direct selling as a business model may not necessarily be the most beneficial for the monastery as a large portion of the revenue goes to cover the shipping fees.

Father Daniel Mary should consider negotiating a deal with the delivery company or expanding their product’s presence in retail stores and coffee shops. As far as marketing is considered, the company may focus on its sustainability appeal to tap into a broader consumer segment, as opposed to mainly Catholic customers. Overall, the organization needs to move from its current somewhat passive approach to a growth and profit-oriented model as to ensure it collects enough funds for the land purchase.

References

Belch, G.E., & Belch, M.A. (2011). Advertising and promotion: An integrated marketing communications perspective (9th ed). New York, NY: McGraw-Hill.

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Boyne, G.A., & Chen, A.A. (2007). Performance targets and public service improvement. Journal of Public Administration Research and Theory, 17(3), 455-477.

Turnipseed, D.L. (2011). Mystic Monk Coffee. In A. Thompson, M. Peteraf, J. Gamble & A.J. Strickland (Eds.), Crafting and executing strategy: The quest for competitive advantage – Concepts and cases (pp. 388-391). New York, NY: McGraw-Hill.

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