Mystic Monk Cafe Current Financial Situation
Introduction 2 3. Introductory note 2 3. History, development & growth 2 4. Analysis 4 4. Analysis of the issues facing Mystic monk 4 4. The prior and leader of the Carmelite Order is known as father Daniel Mary, who’s vision is to expand the order form its present four bedroom ranch family and adjoining 42-acres to a beautiful 496-acre ranch that would accommodate 30 monks. The proposed site would allow for a gothic religious, an abbey for Carmelite holy sister, a sanctuary center for guests, as well as a hermitage. The issue is that the proposed real estate for the „Mount Carmel’ site carries a sticker price of $8. million dollars, which is beyond the monastery's current financial capabilities. The order has two sources of income, one is through donations and the other is from a small coffee brewing company called Mystic Monk Coffee currently based from their Wyoming monastery.
Mystic Monk Coffee is relying on a portion of the 69 million Catholics in the U. S. and hoping they will choose Mystic Monk Coffee instead of other popular coffee companies. In addition, Mystic Monk Coffee wishes to buy a large coffee roaster for $35,000 when the current coffee roaster is not even at capacity yet. In the expanding process, Mystic Monk Coffee wants to maintain production in the Rocky Mountains and export coffee to different parts of the country. There are not different options for different parts of the country. Overall, Mystic Monk Coffee uses a global strategy to operate its coffee business and targets a specific market of coffee-drinking Catholics in the U. S. The company uses the same marketing techniques all over the country and offers the same product (four types of coffee).
The company currently has net profits of 11 percent of revenues (around $6,215). The case as well offers that they are in need of the cash, but they lack appropriate extrapolation technique. When this idea is related to Howard Schultz's idea, then it is clear they need to reorganize their notion once more. It is only through well-organized thoughts that companies might simply achieve their goals. Clarifying this concerning to Schutz, he was vibrant and precisely clear comprising the appliances for appraisal and the path to be taken. When thoughts are elucidated, it is important to the individuals realizing it, since they will know the particular things that they need to do. From Mystic Coffee’s instance, it is not deceptive that Father Daniel Mary has organization targets or definite objectives.
Conversely, he has an aim of being capable of affording the land property even if it is one of the enduring objectives. Mystic Monk Coffee’s tactical achieving tactic comprising the fact that its policy really fits the present state of the organization even though not for forthcoming strategies. Mystic Monk Coffee’s has produced numerous maintainable internal strengths, which are above average even not as superior as those of modest performances as compared to other companies (Hoskisson $ Hitt, 2008). Mystic Monk Coffee also has a sound financial improvement, which needs to progress in the market and the company’s economic strength. Threat of substitutes The threat of substitutes for Mystic Monk is high as customers can choose other drinks other than what is offered.
There is also the threat of indirect substitution such as recreational centers and parks. Rivalry There is fierce rivalry among firms. Mystic Monk faces competition from other established coffee shops such as McDonald’s and Starbucks. Bargaining power of suppliers The suppliers have a low-medium bargaining power. Weaknesses: The Carmelite Order currently has the production capacity of five hundred and forty pounds in day and the demand will soon surpass the manufacturing capacity. The production is also limited due to prayer and meditation throughout the day. Advertisement is primarily by word of mouth. There are consumers who would try the coffee because it is of high quality and good price but do not know about it. The Monastery lacks support and funds It has distribution channels that are shallow The production capacity is usually limited by time that is devoted to silent mediation and prayers The production capacity if the Mystic Monk Coffee roaster is restricted to 540 pounds in a day.
This is printed on the web site. Company Vision Of the four overall planned methods that a corporation may trail as discoursed in the first chapter (page 8-9), which one appears most associated with Father Daniel Mary's strategy? Endeavoring to be the company's low-cost benefactor. Outcompeting competitors on the source of distinguishing feature. Increasing a benefit based on contribution more value for the cash. Concentrating on a fine market position within an organization. Financial ratios The organization has some financial objectives on the incoming cash flows, the profit margin and the percentage of income. This is to attain its objective of reaching $8,900,000, where if the coffee shop does not increase its net annual profits, this would be attained in a period of 115 years.
The market for the product has been growing at an annual constant rate of; Fair trade; 8. and Organic 32% per annum The current profit margin stands at 11% and for it to make $8. million, it will roughly take 112 years. The main issue here is that there isn't adequate HR to produce the type of output necessary for that type of funding. In my opinion, MMC should bring on more monks that are capable of roasting the coffee to try to maximize output. Another option would be to outsource all roasting altogether, which may increase output and increase the profit margin if the process was streamlined. Beyond the chosen focused differentiation strategy itself, a clear lack of strategy for the company is another issue I have brought to light.
According to the case information, the vision is based solely upon raising the necessary funding for the Irma Lake Ranch real estate. Strategic issues such as lack of HR, limited production, high costs of goods sold, low profit margins, and the current marketing mix will all need to be addressed in order for the company to sustain healthy operations going into the future. Works cited Upshot(TM) solution empowers brands and roasters to enter single-serve coffee market. Mar 20). PR Newswire Billings gazette, mont. entrepreneurs column. Doerhoff, B. Lillge, L. Lucier, D. Manning, R. Orcutt, C. us. Retrieved 10 April 2016, from http://docslide. us/documents/mystic-monk-coffeejulia-stepanian. html Thompson, A. Crafting and executing strategy: the quest for competitive advantage : concepts and cases (18th ed.
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