Gomez, Mara & Mendoza, Martin MAY 30, 2014

TEAM PAREF - STRAMAN K31

CASE 01 - MYSTIC MONK COFFEE

1. 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?

Yes, Father Daniel Mary established his own vision for the future of the Carmelite Monks
of Wyoming. He envisioned a new monastery that could accommodate 30 monks, a retreat
center for lay visitors, a Gothic church, a convent for Carmelite nuns, and a hermitage on a
large portion of land called Irma Lake Ranch that costs $8.9 million. The vision for they Mystic
Monk Coffee is to expand its operations through the purchase of a new brewery which would be
capable of producing more coffee therefore generating more funds for the vision for the new
monastery. The mission of the Carmelite Monks of Wyoming is to live a life of solitude and
prayer while working to earn profits in order to make the vision of Father Daniel Mary a reality.

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

Yes, Father Daniel Mary has set definite objectives and performance targets for
achieving his vision. Since the acquisition of the Irma Lake Ranch posed something of a
financial obstacle thus creating the need to set objectives and performance targets. Considering
that Mystic Monk Coffee failed to generate enough money needed for the payment of the Irma
Lake Ranch it was decided that the first objective was make the production of coffee higher
which meant investing in a larger roaster since the older roaster they had been using had limited
capacity. Buying a new roaster would be the performance target, the new roaster would greatly
increase the production; in a day the average roaster produced about 540 pounds of coffee, but
with the new roaster this would increase to 780 pounds (6 hours of work X 130 pounds per hour
= 780). Aside from the increase in production capability, they also decided to improve the
distribution of the coffee; initially it was through word of mouth that people heard of the Mystic
Monk Coffee, but majority of their sales were made through their website.

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

The father adopted a strategy to generate profits from the Mystic Monk coffee in order to create
the new Mount Carmel. Therefore, Father decided to purchase a roster which can produce with
high capacity. The new roster could produce 540 pounds of coffee per day with a capacity of
producing 130-pound coffee in an hour. The high quality of coffee with a wide array of blends is
the competitive advantage of the Mystic Monk Coffee. His brother Java roasts organic and high-
quality Arabica beans into four different blends that include Cowboy Blend, Mystic Monk Blend,
Chants of Carmel and Royal Rum Pecan.

Secondly, he used marketing strategy to accomplish the vision to buy the Irma Lake ranch. He
decided to provide easy and quick Mystic Monk Coffee access to a large number of people. The
customers were able to avail the coffee through the online website as well as Phone call.
Therefore, the main competitive advantage for the Mystic Monk Coffee over their rivals was
providing easy and quick coffee access to its customers. Therefore, they have a niche target
market for their coffee products because of promoting word of mouth marketing strategy.

4. 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?

Yes, MMC’s strategy is a money-maker because they have a niche target market - US
Catholics - although it doesn’t generate the required amount for Father Daniel Mary to reach his
goal for the monastery. MMC’s current business model involves a two-part plan. The first by
investing in a new coffee roaster that will be able to roast 130 pounds per hour instead of per
day and the second by being able to set up wholesale sales to churches and coffee shops.
MMC’s customer value proposition is good because because the product itself is of high quality
and is up to par with the target market’s standards. Having a wide variety of flavors is also
another plus. The profit formula is positive but then being limited to having only 6 hours a day is
one of the major constraints MMC has for their plan on reaching their goal. Limited manpower,
work hours, and marketing strategies are also part of the constraints.

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

If we compare MMC strategy as their strategy to earn the profit, then we can say that
they have the winning strategy. But if we compare it with their objective for the MMC, then it is a
very slow winning strategy. Considering the external situation, it is winning strategy where they
would be able to have a significant number of loyal customers for the long run. But considering
the internal situations, they are losing numerous opportunities to increase their profits. They are
running good which is apparent from the increased profit and number of customers every year.
But looking at their goal to attain enough funds to fulfill the main goal, then they have a failing
strategy. It is because 11% profit is too low to reach $8.0 billion in short time. It will take
numerous decades to earn this huge money if they will run with the same strategy.

6. 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.
 As discussed previously, MMC has winning strategy for earning profit but not to
fulfill their goals. So, below are some recommendations that would help them to
accomplish their goals.

 They need to take time to decide how to implement the new strategy to
accomplish the goals.
 If they are buying a new roster with high capacity then they should also increase
the working hours as well as the workforce.
 They should not limit to the website only or the sales. It is necessary to reach
different churches and stores to provide a large number of options to the consumers
to purchase their coffee.
 They can improve their current status through marketing and advertising.