TO: CHERYL TRAHMS
SUBJECT: MYSTIC MONKS COFFEE CASE
The Carmelite Monks of Wyoming are interested in expanding their current monastery through the purchase of an $8.9 million ranch to accommodate more monks and provide a larger place to worship the Lord. The monks are planning to earn money for this 500- acre ranch through fund raising, donations and through sales that are generated by their Mystic Monks Coffee Company. Mystic Monks Coffee sells premium roasted coffee beans to the general Catholic denomination through a website that is operated by the Carmelite Monks. This web based company generates a low net profit of $6,160 each month and is in need of a stronger strategy to…show more content… Although their strategy is ambiguous the ambition of the monks and position in a growing market make it easy to believe that the future financial performance will be better than its current performance. If Mystic Monks Coffee reduces the costs shown in Table 1 the profit margin will rise and the objective of earning $8.9 million will be easier to obtain.
Mystic Monks Coffee Operations
The Carmelite Monks spend over 8 hours a day praying and only 6 hours working. Although there are no labor expenses because the Monks are maintaining the company operations there is still a large gap in the productivity of this company. The Monks have a coffee roaster that can produce up to 540 pounds a coffee per day but because they are only working 6 hours a day they are only producing 135 pounds per day. The Monks sell about 4,250 pounds of coffee beans per month but have the capability to produce and sell over 14,000 pounds of coffee per month. Part of their business model includes the thought of purchasing a new coffee roaster so that they could increase production but as we can see that is not necessary until the Monks can allocate more time to working and produce at least 500 pounds per day.
Mystic Monks Business Model
The business model of Mystic Monks Coffee is to continue selling high quality coffee beans to their consumers in order to gain profits and maintain their value proposition with the Catholic consumers. These Catholic consumers have a strong