Analyzing The Business Practices Of Carmelite Monks: Mystic Monk Coffee

Background of the Company and Area

Analyse the business practices carried out at the Carmelite monks. 

The Carmelite monks are popular for selling and roasting gourmet coffee using a brand name as Mystic Monk Coffee (Carmelite Monks, 2017). The Production Company and brand is physically located in Powell, Wyoming on 31 Road Afw, Powell, WY 82435, USA. They can as well as be contacted on +1 877-751-6377. In Wyoming (mountain valley), a group of Carmelite Monks decided to find a way of benefitting and supporting their community which was growing. Through prayer and discernment this small group were inspired to start selling coffee beans online as well as roasting it. Mystic coffee was founded in the year of 2007, this was after the first some samples were roasted in the monastery Kitchen using cast-iron skillet. The company had small beginnings, it produces better quality coffee products that are sold online so as to increase market potential. There are currently over 13 Carmelite monks who are residing in that place and these are prayerful, worshippers, and have dedicated themselves to silence life. There were inquires which were made by different groups of individuals requesting to join them as monks and also participate in the production of coffee but space was a limiting factor. Because of requests made other people, there rose a need for expansion and shifting to a larger area. The need for expansion was suggested by Father Daniel Mary a leader of these Monks (Dale, 2008). This decision was to be implemented through purchasing 496 acre of land that has a ranch and some buildings. The cost of purchasing the land was approximated to $8.9 million dollars which become an obstacle to the monks and their production plant. Therefore the money for obtaining the property is obtained through donations where approximately $250 thousands was collected. Also some money is to be collected through coffee roasting were over $75 thousand is saved. Though there is a progress in the coffee roasting, there is still a long way for the Monks to go with their production.

There is improvement in the quality of coffee produced where by the current coffee is characterized by high quality and fair trade. The major brand of coffee which is dealt in is Arabica coffee, this type of coffee is bought from different suppliers from different regions. The major market for the products is in United States Catholics though there are some other individuals who are interested in these healthy products. The products are sold through the use of the internet and oral advertisement. Oral advertisement was the first applied method of advertisement but because of need for further expansion (Paul Timers, 2000), the use of internet to meet a wider market base was advised and used. The average estimated sales in a month for the coffee products is $56 thousand with expenses of over 89% of the revenue. Therefore the profits from the production occupy 11% of the revenue which means the firm spends much on expenses. These high expenses therefore lead to a need of them being minimized so as to cause maximization of profits and expansion of the roasting business. The vision set by Father Daniel Mary is to set up a new Monastery to accommodate a total of thirty monks; setting up a Gothic church, retreat center specifically for the lay visitors, and also setting up the Carmelite nuns’ convent as well as a large portion of land hermitage which is Irma Lake Ranch. The total expenditure for all of these is $8.9 million. The mission of the Monks in Wyoming is living a life of prayer and solitude while working so as to earn profits to make Father Daniel Mary’s vision a reality (Carmelite Monks, 2017). The Mystic monk coffee vision is to cause an expansion in its operations by purchasing new breweries capable of producing more and more coffee so as to generate funds for the new Monastery vision. 

Strategy

For quite a long time, more and more coffee drinker are enjoying this brand of coffee. They are characterizing this coffee as smooth and delicious, most of them became regulars immediately after taking their first sip and around 85% of the coffee orders to the company are repetitive which means are from same consumers. The reason for repetitive customers is because of the perfection strived by the monks to come up with better products. The brand has won a number of a wards from different and famous reviewers of coffee, one of them is Kenneth Davids who has highly rated the brand on his site known as coffeeReview.com. More than twenty-five of the gourmet coffee brands and blends from these monks are rated 90 points and above because of their perfection. The company uses a symbol of Monk taking coffee at the New Mount Carmel where there are establishments of the permanent monastery by the monks. The monks have also adjusted their production from just producing bagged coffee, they also producer the monastic double-handled mugs, single-serve monk-shots, premium Mystica teas, as well as offering the month subscription club. Some of the brand and blended categories sold by the company are: Paradiso Blend at 15 dollars, Colombian sold at 11 dollars, white Chocolate Macadamia Nut at 11 dollars, and Finals week Blend at 11 dollars (Miletsky & Smith, 2009). The Catholic monasteries should work hard in order to support themselves, most of them sell created gifts in order to support their monastic community. These Carmelites monks decided to give support to their monastery through providing the communities with fine cups of coffee. Laboring is the daily life of these monks and each day they rise up after 4 a.m. They spend the days through first taking prayers and contemplation, then later they start their laboring so as to earn what to eat. So as to successfully support themselves, they decided to carefully roast and make fine coffee beans. These fine beans are sold in a number of countries inorder to raise a good sum of money; some of these countries are form Asia, Africa, South America as well as the United States of America. The most African countries where these beans are sold are Rwanda and Kenya.

The Mystic Monk coffee firm has a strategy, this strategy targets the catholic population in the united states of America as well as countries so as to make profits. The strategy also consists of offering and selling the products online especially using their website. The marketing and advertisement of the products is conducted using affiliating online companies and social media platforms such as Facebook so as to expand the market of the product (Gottschalk-Mazouz, 2008). The firm also has a strategy of further expansions through buying land worth $8.9 million, this would be achieved through accepting donations and carrying out sales on the product so as to fundraise. Recently the firm expanded its model of business through conducting whole sales to the Catholic Church members and coffee shops. They have a strategy of reaching out to their customers through provision of quality products, this has been useful in expanding the market potential of the firm. They are also targeting the niche market therefore the firm is profit-oriented so as to support the different members within the community. So as to raise more and more profits, the firm invested in purchasing a new roaster so as to increase on quantity and quality of production to attract more customers.

Issues/Problems That Are Analyzed

Before looking at the different problems and challenges which face the Mystic Monk coffee firm, there are also strengths and privileges that are enjoyed by the firm during the production of coffee.  Some of these privileges are; the MMC is characterized with production of high quality, organic and fair Arabica coffee beans and therefore this give it a privilege of ready market. It only takes a consumer to take once of their coffee and will keep daring for more. They are also in position of offering variety of brands, roasts, flavors, and blends therefore appealing to larger range of preferences for different coffee takers. Coffee drinkers who are not necessarily Catholics are also enjoying the coffee claiming that their coffee is healthy, because of socialism factor and need to support the monks these also keep buying the coffee which is advantageous to the monks. The other privilege is that the company has a ready market for the products within the United States of America Catholics and also other Catholics within other locations.

Though the monks are enjoying privileges from there production such as great support from the public, they are faced by a number of issues or challenges some of which are arising from there locality while others distant. Some of the problems that are affecting the monks when carrying purchasing and finning coffee are,

There is a problem of many expenses; these expenses are incurred on different activities and some of these activities are online advertisements since it is the major platform for selling the product, expenses on finning the coffee beans so as to make them ready for market, expenses on purchasing these Arabica coffee beans from the Seattle to process and distribute them under Mystic Monk coffee. These expenses are further increasing because there is a vision by Father Daniel Mary to expand the brotherhood to over 496 acres to improve production. The expenses cover almost 85% of the collected revenue which means the company gains only 11% from the revenue collected.

The other problem is capacity within the company, the current monastery produces only 540Ibs in a day. This capacity cannot necessarily meet the required market potential; the low capacities are assumed to be rising from the high expenses that are incurred when buying the coffee beans from sellers so as to process them into finished products, the other cause is the limited resources within the area which also could be the major cause of failure raising enough money so as to achieve the goal of expansion to increase on capacity.

The other issue or challenge affecting the monks and the coffee production is lack of proper tactics and planning strategies for evaluating their vision of diversification in production (Gamble, 2013). Though the resource are few in the area, it may not be the core problem; the core problem may be failure for the existing monks to strategically plan how to manage these resources for better production (Beynon, 2004). The goals of achieving the vision are not accurate and clear enough for leading a better course. It’s always significant to people to implement clarified ideas only if they are sure of what is to be done; the reverse is true, idea clarified may be hard to be implemented because people are not aware of what to be done and therefore there are high chances of failing to meet the visions and goal set forth.   

Given the fact that the company focuses and is specialized in the coffee industry, there are many other companies that are stronger and deal in the sale of the same commodity. This gives competition to the Mystic Monk Coffee. Some of these companies may include Maxwell, Newman’s own, and Folgers, to mention but a few. These companies may not directly deal in coffee industry as a specialty but still they cause a threat to the company since thy are capable of producing the same quantity of coffee produced by Mystic Monk coffee company. Additionally the market of coffee is shrinking, taking early coffee is fading in this current generation. The older generation used to take coffee before rushing for work but currently individuals are focusing so much on energy drinks and caffeinated drinks. Therefore the company should look for ways of expanding its self because it is small and can be easily replaced by other bigger companies with a higher production capacity (Graham et al., 2000).

Every Business is run and started through strategic management and planning. Currently the Mystic Monks are trying to raise $8.9 million so as to buy a ranch so as to promote diversity. This plan is spear headed by their vision bearer father Daniel Mary. A number of individuals think that the reason why the visions have failed is because of few resources. The truth is that it’s not about resources, it’s about improper tactics and strategies applied by the monks while applying their vision for example making an expansion and how to diversify their production, poor follow-up on visions makes the coffee plant to lag behind and face stiff competition from others. A good strategic plan of a business contains different elements which are very helpful in attracting potential business managers and financers for the company to meet its objectives. A good vision or goal is always formulated in line with the desire of meeting the company’s market place. Although a business plan does not consist of goals which are useful in defining the company, it defines the different elements that are similar to the goals and can be advantageous to the existing Business opportunities. The coffee company needs funds for expansion but there are inferior and improper fund extrapolation methods. It’s only through well-organized ideas that firms achieve and attains goals easily and quickly.

Father Mary is always compared to Schultz because both of them are vision bearers in places where business is not expected. For the case of Howard Schultz’s, he had a clear vision, it was accurate and clear with inclusions of the evaluation mechanisms as well as the course to be taken. The ideas where classified, significant, and easy to implement since the different individuals are aware of what steps were to be taken. Therefore there are needs for change by the mystic so as to prevent them from lagging behind. Some of the reasons why they are lagging behind are; concentration on one type of business as well as serving a single population of Catholics intensively. Secondly the monks have made use of the land opportunities therefore yielding less profits (Armstrong & Kotler, 2014).  Lastly the Monks are too conservative such that they donot include other parties in their business.

Some of the internal factors that influence the Mystic Monk’s coffee company are the organization structure, company image, brand awareness, financial resources, and operational capacity and efficiency (Spitz, 2003). This coffee company has a good public Image because of E-commerce where it advertises and carryout trade of goods and services through the use of the internet. Their Image is too appealing to the United States coffee taker Catholics and other Catholics from other regions of the world for example Africa. Given the fact that the company only specializes in production of coffee, it would hardly meet its production visions. This is because there are a number of other companies which produce coffee and not under specialized basis. These are large companies and as said earlier they cause a great threat to the monks because they are capital intensive and can easily shadow the coffee company by either buying it out or producing quantities of product higher than that of a company. Specialization is not a best form of production though it is very essential in the production of quality products; the habit of taking coffee is quite fading a lot in the current generation therefore there is a need for diversity as suggested by Father Daniel Mary who wanted to purchase another land at $8.9 million to run a ranch farm, this would be useful in fighting specialization and causing diversity.

The monks who are dealing in the coffee production devote little time for production since some of the time is devoted to silent meditation, worship, and prayer. This gives little dedicated to work by the monks which is approximately six hours in a day and this becomes a key factor in causing limited production of approximately 540 pounds in a day. This daily production is a major problem since on current sales, it creates an 11% profits margin on net, therefore there is no possible way this could generate the needed $8.9 million dollars through earnings. And of this rises through lack of a clear business plan by the coffee group. 

The Company has failed to utilize its resources and capabilities. Resource of the company refers to those assets that are owned by the organization and these are categorized under three major types which are tangible, human, and physical resources (Moskowitz, 2006). The capabilities of a company refers to the complex skill patterns that are useful in the utilization of the available resources so as to obtain the needed end results within the organization. The capabilities and resources are too essential to the organization for the case of competitive advantage. A business capability can also be viewed as what is needed to be done by the company so as to be in position of executing it business strategy.  Similarly, capabilities can refer to process, people, and technology gathering as well as their collection for a given specific purpose (Lamont & Christopher, 2001). Mystic Monk coffee company has a number of capabilities and resources, these are very useful in the smooth running of the business and company activities. The resources of the company include the presence of monks who provide labor for the company, the availability of market where these products are being sold, the availability of space in the mountains of Wyoming, and other resource for the business. The different capabilities that the company enjoys are extension of the market to the different parts of the world including parts of Africa, Asia, and South America. The monks are also whiling to offer labor to the business which facilitates production, the advantage of advertisements especially through the use of the internet is also a capability of the business (Spicar, 2014), the good management of the business since it was raised to give support to the monk community as well as the profits are shared among themselves for their wellbeing.

For better improvement of services and production, MMC would work upon the conduction of their services for example improving on the number of working hours and workforce (Eddy, 2013). Some of the different recommended activities that should be carried out by the company are;

 The coffee company should reduce on their conservativeness, MMC only use laborers who are only brothers and these brothers allocate most of their time praying, praising, and meditating thus allocating less time to run the enterprise. Therefore to avoid the sacrifice of prayer time to produce more product, it is necessary for them to employ other members of the community who will dedicate time for production of coffee beverages since some activities take a lot of time for packaging and roasting to accomplish (Weinberg, 2005).

There is need for equipping the monks with adequate skills and knowledge about the production process so to make them in be position to handle the future increasing demands of the product. The new skills include how to apply the new coffee roasting technologies for better production and generation of high incomes (Ryu, 2017).

 The coffee company should be in position of purchasing a coffee roaster that would handle the increasing demands of the product. The new coffee roaster would be in position of applying the up-to-date technologies that would enable production of better quality products by the monks (Henrich & Henrich, 2007).

The monks would increase on the level of advertisement not only in the catholic believers but also all over the world. Better advertisement does not consider differences in races and religions, it focuses on increase of sales and attraction of more customers to generate more revenue (Krajewski et al., 2005). Therefore the monks should put better advertisement into practice if they need increase in sales and revenue (Behal & Sareen, 2014).

According to the formulated business plan (Beckett, 2012), Father Daniel Mary relied almost half of the $8.9 million purchase cost to be originating from donations. He should also be in position of utilizing the allocated resources to him from the Catholic Church so as to find main donors who are willing to contribute to the purchase of the New Mount Carmel. Given the profit formulae = sales-(operating expenses + affiliate commissions + total of goods sold) (Ferrel & Hartline, 2012). Without introduction of the new roaster the monthly profits made by the monks is $6,215, this is arising from the 540 pounds of coffee produced daily which could amount up to $448 daily. Through the introduction of a new roster, there would be an increase in the daily production basing on the daily working 6 hours. The daily output would be estimated to 780 pounds daily. Therefore there would be an increase in the sales of the organization. This would also increase the monthly and annual incomes as $75,000 and $450,000 respectively given the fact that the demand are adjusted to match the production (Meyer, 2007). 

When there is an increase in production, the coffee company should be in position to communicate and negotiate with the coffee suppliers, coffee brokers, and shippers in better terms so as to cause a reduction in expenses so as to be in better position of increasing profits. The current cost of goods by the company is at 52 percent and therefore negotiations by the shippers and suppliers would reduce this cost slightly (Stamford, 2014). The Economies of scale would be crucial in reducing the total operation costs and expenses from an estimate of 37 percent to at least 32 percent because of there would be overall reductions in cost in each unit being produced (Paul, 2007). The increase in the productions would be essential in the increase of the net profits when the total expenses are also cut. The expenses on commission paid to affiliate websites should also be reduced since it would be less beneficial to the company (Pettit, 2012). In other words, Mystic Monk Coffee should use email messages requesting for opportunities from catholic churches to involve themselves in the business. One of the suggested ways these churches could involve themselves is through advertising the different activities conducted by the company run on internet to the church members. Churches should also allocate advertising banners on their sites talking about Mystic Monk coffee. Additionally the vision of the coffee company should be talked about and also emphasizing about the serving of coffee at the different catholic conferences.

For my Career, there are bigger Plans to be achieved. After finishing this course and graduation, I will acquire capital either from seeking a job position from a business company or acquire it from possible relatives or friends. The possible areas I would be employed are marketing, Human Resource, business consultancy, finance, and procurement (Ibarra, 2003). After acquisition of capital and adequate real world business skills for two better years definitely I will start a cake baking company (Moffatt, 2008). The minimum amount of capital needed would be $50,000 dollars and 20 employee with adequate skills in baking and 20 marketers for the start. The company would be having set on targets of producing better quality goods, the goods produced should also be original to differentiate them from already existing products (Strenger, 2008). The company would be in position to own a website that would be used for advertisement and sales of the products. After the expansion of the business, I would go back to school for advancement in business. some of the characteristics of the type of employee that I would like to employ are; passionate employees  and these will be in position of producing better quality work through pleasing the customers as well as being creative. The second attribute is being open-minded who think outside the box, the employees should possesse an ability to prioritize and focus, they should be in nimble and flexible in their work to meet the market demand, lastly they should be in position to balance entrepreneurial spirit, willingness and ability to take advice from others. The company by all means has to grow by providing better quality of products.

 When expanding the business, one of the factors considered is conducting market studies, this would be very useful, it will be used as a benchmark for conducting the expansions. It will also be used in determining the business geographical location (Rouse, 2006). It is very useful to allocate a business in an area where there is market for the commodities produced though the internet is also an important tool in marketing. The larger the market the greater the expansion and the lower the market, the lower rate of expansion. I will also consider the need for more employees, it is necessary to know whether the business would need additional employees and make the necessary changes so as to make the expansion useful. Another factor is to examine capital structure (O’Sullivan & Steven, 2003). The size of capital will also determine the size of expansion of my business. The greater the capital with less debts and credit, the higher the size of expansions and the higher the debts of the business, the lower the business expansion (Armstrong & Kotler, 2014). Also at times it’s useful to consider the legal obligation. The expansion at times require statutory requirements such as increase in the taxes which are imposed on the business. These taxes differ by the type of business being run. Other most useful factor I will consider while expanding my business is the skills of the different employees as long as there time management during production. Skill is very important because it could be used to determine whether the skilled personnel could possibly meet the needed changes as well as production time increase or decrease. 

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