Mystic Coffee - Case Analysis

Running head: MYSTIC COFFEE: CASE ANALYSIS
MYSTIC COFFEE: CASE ANALYSIS
Name of the Student
Name of the University
Author Note

1MYSTIC COFFEE: CASE ANALYSIS
Table of Contents
Introduction................................................................................................................................2
History of Mystic Monk Coffee.................................................................................................2
Strengths and weakness of Mystic Monk Coffee.......................................................................4
External environment of Mystic Monk Coffee..........................................................................5
SWOT analysis of Mystic Monk Coffee....................................................................................8
Corporate Level Strategy of Mystic Monk Coffee..................................................................10
Business Level Strategy of Mystic Monk Coffee....................................................................10
Structure and control systems of Mystic Monk Coffee...........................................................11
Financial analysis of Mystic Monk Coffee..............................................................................11
Recommendation......................................................................................................................12
Conclusion................................................................................................................................12
References................................................................................................................................14

2MYSTIC COFFEE: CASE ANALYSIS
Introduction
This paper is going to provide a case study analysis in details about the company,
Mystic Monk Coffee and conduct both internal and external analysis in order to suggest
suitable recommendations for the business in order help the business expand and fulfill the
desires and missions.
History of Mystic Monk Coffee
Mystic Monk Coffee is a very small-batch of coffee, roasted by the Carmelite Monks
in Wyoming. In Wyoming, Father Daniel Mary is considered to be the prior of Carmelite
order of monks in Clark, Wyoming. Father Daniel Mary had set forth a vision to expand the
monastery that they were currently residing in in order to establish a concrete direction for
the positive future and development of the Carmelite Monks. Father Daniel Mary visioned
the transformation of a very small house in which once around 13 monks would live together
into a beautiful and a huge monastery of 500 acres that could accommodate around 30
monks, a convent for the nuns, Gothic Church, retreat center so that they could lay people
and also for hermitage. Father Daniel Mary, in his mind wanted to purchase and acquire the
Irma Lake Ranch which was his most vital mission, he wanted to purchase this land in order
to grow and increase the monastery in terms of size. However, this vision of Father Daniel
Mary was very expensive as the Irma Lake Ranch costed $8.9 million which has created a
main obstacle for the vision which he wanted to turn into reality. Father Daniel Mary though
that the coffee company, Mystic Monk Coffee that was operated by the monks could be of
help and help in funding the purchase of this new desired ranch.
Mystic Monk Coffee was operated by the monks for the past one year where they had
been roasting coffee and this work of theirs had led them to earn around $75000 which Father

3MYSTIC COFFEE: CASE ANALYSIS
Daniel Mary has been thinking of using the fund to carry out his vision which is to buy the
500 acre land so that he can successfully expand the monastery. Currently, Mystic Monk
Coffee is mainly into the roasting business and it can be seen that they use fair traded, organic
and fair traded Arabic beans. The monks produce and develop ground caffeinated, whole
bean and varieties od decaffeinated beans in light, dark and medium roasts and also in various
flavours. The most popular flavour of the company was the Mystical Chants of Caramel,
Royal Rum Pecan, Mystic Monk Blend and Cowboy Blend. Mystic Monk Coffee does not
use any marketing strategies to market their products rather their sales happen due to the
positive reputation and word of mouth. Mystic Monk Coffee currently sells their fine roasted
coffee via their official website and sometimes through telephone orders and is mainly caters
to the Catholics who prefer drinking coffee. They sell 12 ounce of a bag of coffee for $9.95
and often provide their customers with offers like free shipping if they purchase more than
two or three bags of coffee and also provides them an option to their customers of joining
their coffee club where the benefit that the customer will receive one to six bags of coffee
every month. Mystic Monk Coffee alongside their coffee also sold gift cards, CD’s that
featured the Gregorian chants that are chanted in the monastery, coffee mugs and T-shirts.
The monks have changed the business model of Mystery Monk Coffee and have
expanded their business which helps them in providing wholesale sales of the products by the
brand in the churches and also sell their products to the local coffee shops which will help
them in generating more profits.
Mystic Monk Coffee generates decent revenue of around $56,500 per month in their
first year including the sales of the accessories that they provide online via their official
website. The gross profit margin of the coffee company that is operated by the monks
averaged at around 11 percent of the total revenues. This is how the Mystic Monk Coffee was
growing and developing since its inception. However, the vision of Father Daniel Mary is

4MYSTIC COFFEE: CASE ANALYSIS
expensive and thus he has been considering maximizing the coffee roasting business in order
to fulfill his vision of establishing a big and beautiful monastery for the monks.
Strengths and weakness of Mystic Monk Coffee
Mystic Monk Coffee is seen to have several strengths that have led the company to
generate decent amount of profits and revenues without the application of any kind of
marketing strategies. One of the major strengths of Mystic Monk Coffee is the products they
sell. It has been seen that the company is selling and providing high quality and organic
Arabic beans that are in huge demand because of the benefits of the coffee bean. According
to scholars, in recent times, the buyer behavior of the people has shifted and they highly focus
on purchasing organic products for their health benefits (Rana and Paul 2017).
The other advantage of the Mystic Monk Coffee is the variety of flavours that it
provides to their customers. Sonenshein, Nault and Obodaru (2017) states providing different
flavours of a product in a business have become very important in the food processing
industry as it helps in meeting the demands of diverse customer base who have different
preferences in terms of quality and taste. The company provides free shipping with the
purchase of more than two to three bags which is another strength which has led many people
to purchase more than three bags of coffee that has contributed to the sales of the company.
According to scholars, free shipping is one of the major strategies that online companies have
been using to influence the buying behavior of people as it plays with the psychology of the
people that they have saved the cost of shipping (Aragoncillo and Orus, 2018).
One of the important strengths or power of Mystic Monk Coffee is the positive
reputation they have garnered among the people which has led to the growth of the company.
It can be seen that the company does not incorporate any marketing strategies and despite of
that the company performs pretty well in the market. It has been seen that the main marketing

5MYSTIC COFFEE: CASE ANALYSIS
of the company happens by word of mouth. Li et al (2018) states positive reputation of a
product or a service is beneficial for an organisation as it leads to word of mouth which helps
in the marketing of products and services of an organisation which is highly effective. This
word of mouth is a kind of marketing which has led to the development of Mystic Monk
Coffee over the past year.
However, the company has some weaknesses as well which leads to the company
acquiring a marginal profit. This is one of the weaknesses of the company as the profit which
is generated is not adequate enough to gain funds in order to buy the place which is desired
by Father Daniel Mary, Irma Lake Ranch. The other weakness which can be identified is that
Mystic Monk Coffee does not incorporate any marketing strategy in the business. According
to scholars, marketing strategies are extremely important for businesses as it helps in selling
products and services by making the customers aware of the unique selling point and
spreading awareness of the brand (Morgan et al 2019). The other weakness of the company is
that ShareASale participation program generally allows affiliates to mention or refer the new
affiliates and make an earning of a commission about 56 percent of the new affiliate. This
makes the Mystic Monk Coffee spend a lot of money on unnecessary promotional tool which
has been affecting the business and is contributing to the meager amount of profits which can
cause hindrance to the vision which is buying the ranch for the growth and development of
the monastery.
External environment of Mystic Monk Coffee
There are several outside influences or factors which compose the external
environment and impact the operations of an organisation. It is important to analyze the
external environment of the Mystic Monk Coffee for the sake of identifying the
environmental threats and also the opportunities. According to scholars, external environment

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has a critical role to play in shaping the future an organisation and helps in keeping
organisations ahead of their competition (Váchal, Pártlová and Straková 2017). For one to
analyze Mystic Monk Coffee’s external environment, the Porter’s five forces model or
analysis will be used in order to identify as well as analyze five forces that are competitive
and have the capability to shape the industry and also help in determining the strengths and
weaknesses of the industry (Lumbanraja, Dalimunthe and Hasibuan 2019). It is also useful
and helps to adjust the strategy of a business to suit the competitive environment of the
business and improve potential profit.
According to the model the five forces that create a competitive environment are the
following:
Competitive Rivalry
Mystic Monk Coffee has very low competitions in the market. The major competitors
of the company are First Colony Coffee and Tea, Seattle’s Best, Green Mountain Coffee
Roasters and Milestone. All the competitors of the company are coffee wholesalers and
brands that produce high quality coffee to the people. It has been seen that United States has
a huge demand of coffee which has led the country to have coffee shops at every corner of
the streets (Bulavtceva et al 2016). However, the coffee that is served in majority of the
coffee shops do not provide high quality and make sure that there are people in the making
and have been on the rise and also on the situated power which may or may not comply with
the studious and a
Supplier Power
According to scholars, the supplier power determines the fact that how easy it is fir
the suppliers of a company to increase the prices. It can be seen that the supplier has low to

7MYSTIC COFFEE: CASE ANALYSIS
medium power in terms of bargaining (Mburu 2016). It is viewed, Mystic Monk Coffee does
not deliver with a lot of suppliers and highly depends on one broker only who can in the long
run have a medium bargaining power however; the overall industry is seen to grow massively
and allow the suppliers to have control over the market.
Buyer power
Buyer power determines the power of the customers and indicates the size of the
buyers. According to scholars, when there are large buyers of a product or a service but in
few numbers then the customers are likely to bargain the prices down (Fabbri and Klapper
2016). At the moment, Mystic Monk Coffee has very few customers whom they cater to and
who purchase their products through word of mouth and thus it can be seen that the buyer
power of the customers is pretty high.
Threat of Substitution
The substitute products of Mystic Monk Coffee are available in the market in
abundance and that too at cheaper rates. The Mystic Monk Coffee can be replaced by other
coffee brands and also other drinks that are being introduced in the market. According to
scholars, the substitute products are considered to be dangerous and detrimental for the
business of a company as it under threat constantly of being replaced (ÖZTOPÇU 2017). The
high threat of the substitute can lead Mystic Monk Coffee to gain low profit because it limits
the profits of the industry by providing low process on products because of the fear of
customers making alternative choices in the market. It can be seen that it can affect the
potential of the industry in terms of the growth and also reduce the profitability margins.
Threat of New Entry

8MYSTIC COFFEE: CASE ANALYSIS
There are many coffee companies that have been coming up in the market and have
been marketing their products to garner the attention of the people. Lewis (2017) states threat
of new entry usually refers to the ease of the access of companies to enter into an industry or
a market. It has been seen that there are many companies that have been coming up with
premium quality coffee beans and many people have been brewing coffee in their homes
which makes the threat of new entrants for Mystic Monk Coffee high.
SWOT analysis of Mystic Monk Coffee
In order to conduct an internal analysis it is important to conduct a SWOT analysis
which will help in providing the strengths, weakness, opportunities and threats. According to
scholars, SWOT analysis is highly significant as it helps organisations to examine the
positive as well as the negative aspects of an organisation and helps in determining the fact
that how organisations can compete in the existing market (Phadermrod, Crowder and Wills
2019).
Strengths
 High quality, premium and organic
roasted coffee
 Variety of flavours
 Offers like free shipping with a
purchase of two or more bags
 Positive reputation
 Word of mouth
 Online shopping
Weakness
 Low profit margin
 Lack of marketing strategies
 Use of affiliate marketing network
like ShareASale
 Limited hours in the operation
 No experience
Opportunity
 Expand their business and integrate
new products
 Franchising
 Collaborate with large retail
companies
 Use advertising and marketing efforts
Threats
 Various established brands
 Change in the demands of the
consumers
 Variability of the market prices
 Alternatives of substitutes in the
market
Table: SWOT analysis of Mystic Monk Coffee

9MYSTIC COFFEE: CASE ANALYSIS
It can be seen that Mystic Monk Coffee has several benefits like the quality of their
products, the variety of flavours they provide, online shopping and positive reputation which
has been achieved due to word of mouth which has helped the company gain a competitive
advantage in the market however, there are many weaknesses that the company has been
facing which is very low profit margin which hinders the company to gain sufficient profits
which will help in fulfilling the vision and the mission of Father Daniel Mary. The company
is seen to have other weaknesses as well like limited hours put into the roasting of coffee,
lack of experience in the field of business and also the lack of marketing strategies that can
possess a huge threat due to the lack of brand awareness and many also have negative
impacts on the expansion of the business. The less hours put in the operation of roasting
coffee will lead to less production which will hamper the vision that is set forth by Father
which is to expand the business.
However, Mystic Monk Coffee has several opportunities which they should consider
in order to expand their business and also operate the business in a successful manner. The
company should come up with new products which may help in providing customers with
other range of products which might attract them. According to scholars, franchising helps in
expanding business without the risk of cost of the equity or debt (Madanoglu, Alon and
Shoham 2017). Thus, this will help the company in increasing their size and growing the
business efficiently. The company needs to use more marketing and advertising methods

10MYSTIC COFFEE: CASE ANALYSIS
which will help in spreading brand awareness and make people notice the brand.
Collaborating with large retailers will help the companies get a lot of exposure in the market.
The alternatives, presence of established brands and the price is a huge threat to the
company as this can make people choose alternatives and can hinder the growth and
development of the company in terms of operations as well as sales.
Corporate Level Strategy of Mystic Monk Coffee
Corporate level strategies of a business are when the decision made by the business
affects the whole company (Richards et al 2019). It has been seen that the main strategy of
the company is to sell to the Catholics of the United States and to come up with new flavours
which help in satisfying the needs of the customers. It can be seen that the company used
customer value proposition as a strategy as it provides its customers with benefits like high
quality, organic roasted beans, free shipping if one buys two or three bags of coffee and also
provide membership to a coffee club. It can be seen that this company targets a very niche
market which affects the whole company in terms of their operations as well as sales.
Business Level Strategy of Mystic Monk Coffee
Mystic Monk Coffee is seen to use the differentiation strategy as their business level
strategy. According to scholars, the differentiation strategy is when businesses take steps to
develop unique strategies in order to come up with unique services or products in order to be

11MYSTIC COFFEE: CASE ANALYSIS
distinctive from other products or services in the market (Widuri and Sutanto 2019). It can be
seen that Mystic Monk Coffee uses this strategy and produces high quality roasted coffee
beans and also provide different accessories via their website, provides different pricing
range and many more. Iqbal (2016) states differentiation strategy paves way for loyalty
among the customers and products. This has made Mystic Monk Coffee to cater to a niche
target audience successfully.
Structure and control systems of Mystic Monk Coffee
It can be seen that the company does not have any proper structure like other
companies do however a proper control system has where the monks are only allowed to
produce roasted coffee beans within a specific time. The structure of the company is
somewhat flat where there is no higher authority present and the people are highly involved
in the decision making process which can be seen to be aligned with the strategies taken by
the company. It can be seen that because of the limited production and the high quality
products, the company focuses only a specific and niche target market.
Financial analysis of Mystic Monk Coffee
S.No Particulars Amount per month (in
$)
i. Total revenue 56500
ii. Cost of Goods Sold (COGS)
iii. Cost of Sales (CoS) (56500*30%) 16950
iv. Shipping cost (56500*19%) 10735
v. Broker fees (56500*3%) 1695
vi. Operating expense (56500*37%) 20905

12MYSTIC COFFEE: CASE ANALYSIS
vii. Total COGS (iii+iv+v+vi) 50285
viii. Net profit (i-vii) 6215
It can be seen that the company has total revenue of $56500 and the total Cost of
Goods Sold for the company in a month is $50285. The profit margin for the company stands
at $6215 per month which shows that it has financial stability.
Recommendation
Mystic Monk Coffee needs to expand their business successfully in order to gain more
profits for the vision and thus in order to expand they can consider the following strategies
that will help the company in their success.
 Mystic Monk Coffee should come up with more products so that they can attract
many customers to make a purchase.
 They should consider franchising which will help them in expanding their business in
a viable way.
 Incorporate traditional as well as digital marketing strategies to create brand
awareness so that people get to know about the products.
 Collaborate with large retail companies which will help in increasing the accessibility
of the products which may help in boosting the sales of the company.
 Come up with various pricing strategy so that is affordable to majority of the people.
Conclusion
Mystic Monk Coffee is one of the companies that provide high quality and organic
roasted coffee beans to their customers and is operated by monks and it has been seen that the
prior of the monks aims on establishing a monastery. The monks already operated this coffee
brand however; in order to fulfill and meet the desire Father Daniel Mary considered

13MYSTIC COFFEE: CASE ANALYSIS
expanding the business in order to acquire profits to purchase the land. It can be seen that
Mystic Monk Coffee has several benefits as well as weakness and even threats that can
hinder the growth of the company. Thus, it is important for the company to consider the
recommendations and making viable decisions which will help in the expansion of the
company and also ensure the vision set forth by Father is successful.

14MYSTIC COFFEE: CASE ANALYSIS
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