MYSTIC_MONK_COFFEE_Case_Analysis Essay

Charissa Mae G. Amper BS in Management – IV MGT 190, MTh 1:00 – 2:30pm

MYSTIC MONK COFFEE

1st Individual Report

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Does the Order have a mission and a vision? Does the coffee venture have a mission and a vision? If so, identify it.

The mission of the Order is obviously to respect, love, and pray to God. Father Prior Daniel Mary had a vision for the Carmelite Order. It is to make a new Mount Carmel in the Rocky Mountains by “transforming 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, a convent for Carmelite nuns, a retreat center for lay visitors, and a hermitage” CITATION Tur10 l 13321 (Turnipseed, 2010).

However, it was not stated in the case that the other Carmelite brothers had the same vision for the Order. It is not clear if the other monks also wanted a new Mount Carmel or if they are just in favor of their traditional monastery life.

I think that the mission of the monks’ coffee venture was to provide Mystic Monk Coffee, produced using high-quality fair trade/organic Arabica beans, for the coffee drinkers of the U.S. Catholic population. In the case, it was not also clearly stated that the coffee venture of the monks had a vision.

Has Father Daniel Mary set definite objectives and performance targets for achieving his vision?

Father Daniel Mary had his overall goal of gaining money to be able to buy the Lake Irma Ranch for $8.9 million. Nevertheless, he and the monks didn’t set specific short-term objectives or long-term goals and performance targets for achieving the vision. I think they had a strategy, but they didn’t have clear objectives to accomplish to further achieve their vision.

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What is Father Prior’s strategy? What competitive advantage might Mystic Monk Coffee’s (MMC) strategy produce?

Father Prior’s strategy is focused differentiation strategy, wherein unique products or services are offered to a narrow market CITATION Foc12 l 13321 (Focused Cost Leadership and Focused Differentiation, 2012). In the case, MMC is producing and selling a wide variety of coffee flavors, blends, and roasts to satisfy the different coffee preferences of the coffee drinkers of U.S. Catholic population. Father Prior was depending on donations to the monastery and profits from the MMC to earn more money for the purchase of the Irma Lake Ranch. The Mystic Monk Coffee is produced from high-quality fair trade/organic Arabica beans. Promotions were done through word of mouth by the loyal customers. Sales were made mostly online, sometimes through telephone orders. Advertisements were done through the MMC Affiliate Program and the ShareASale participation program, which resulted to more sales. MMC also expanded by including “wholesale sales to churches and local coffee shops” CITATION Tur10 l 13321 (Turnipseed, 2010). Lastly, T-shirts, gift cards, CDs, and mugs were sold in their website.

The focused differentiation strategy of Mystic Monk Coffee would be able to produce a competitive advantage. The wide variety and high quality of MMC’s coffee beans and especially, the image of the monks would really benefit the customers, thus encouraging more Catholics to become a customer. Remember that the target market of MMC are the coffee drinkers among the U.S. Catholic population, which consists of more than 69 million Americans. The large size of this target market would make MMC more profitable. Last but not the least, it would really be hard for MMC’s competitors, even Starbucks, to copy the monastic relationship between the Order and the target market, who are Catholics as well.

What is MMC’s business model? Asses the customer value proposition and the profitability.

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In my previous answers, I have already described the business model of Mystic Monk Coffee. To put it simply, high-quality and wide variety of coffee are sold to the coffee drinkers of the U.S. Catholic population through their own website and telephone. Promotions, advertising, and more sales were done through word of mouth, affiliate program, ShareASale, expansion, and product line extension. The business model also included the plan of purchasing a new larger coffee roaster so as to increase production and more importantly, sales.

MMC has a strong customer value proposition for a lot of reasons. First, they provide specialty coffee to the customers since it comes from high-quality fair trade/organic Arabica beans. Second, they also have a wide variety of coffee flavors, blends, and roasts that would surely satisfy the different tastes and preferences of the target market. Customers who would purchase three bags of coffee could also save money since MMC offers free shipping to them. Lastly, the most important benefit is the monastic relationship present between MMC and its Catholic customers.

Mystic Monk Coffee may have a strong customer value proposition, but it lacked something in its business model. There is a flaw, especially with regards to profitability. MMC doesn’t have cost advantage, which is “superiority achieved through factors such as access to cheaper inputs, efficient processes, favorable location, skilled workforce, superior technology, and/or waste reduction or elimination” CITATION Web15 l 13321 (WebFinance, 2015). This is because of MMC’s limited production, as a result of lack of production time, lack of labor, and lack of roaster capacity. The eleven percent net profit margin of MMC’s first year in operation is not enough to be able to earn $8.9 million, such large amount of money for a quite short period of time. Only one monk is in charge of the coffee production and even if a new roaster will be purchased, much labor is still needed. MMC would probably not be able to purchase Lake Irma Ranch for its new Mount Carmel because of the weaknesses of its business model.

References

BIBLIOGRAPHY Focused Cost Leadership and Focused Differentiation. (2012). Retrieved from 2012 Book Archive:

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Turnipseed, D. L. (2010). Mystic Monk Coffee.

WebFinance, Inc. (2015). What is cost advantage? definition and meaning. Retrieved from BusinessDictionary.com: