Strategic Management of Mystic Monk Coffee

This study focuses on the strategic development, management, and operations of Mystic Monk Coffee. It includes internal and external analysis, SWOT analysis, and business and functional level strategies.

STRATEGIC
MANAGEMENT

TABLE OF CONTENT
Introduction.................................................................................................................................................3
Introductory.............................................................................................................................................3
History, development and growth............................................................................................................3
Analysis.......................................................................................................................................................4
Internal strengths and weaknesses...........................................................................................................4
External environment..............................................................................................................................5
SWOT Analysis.......................................................................................................................................7
Business and functional level strategies...................................................................................................9
Recommendations.....................................................................................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12

Introduction
Introductory
The present topic will be focusing upon the strategic development, management and
operations of a coffee production brand the “Mystic Monk” founded in the year 2007. This study
will include internal and external analysis of the company within its analysis part and will also
highlight the importance of different business and functional level strategies for Mystic Monk.
This report will present the SWOT analysis of the company with an in depth discussion to its
threats and opportunities through Porter’s Five Forces model.
History, development and growth
The order of Carmelites has its origin on Mount Carmel. Carmelites are the reverent and spiritual
group Roman Catholic formed by people heading towards holy places and pilgrims. They prefer
to have a life of isolation and peace at Mt. Carmel prior to turning into a renowned order of the
Church. The Carmelite religious community of Wyoming was founded by Father Daniel Mary.
The order of Mount Carmel of Wyoming was allowed to leave the monastery for therapeutic
needs and in case of death of near ones. A total of 13 preaches residing near the Rocky
Mountains in small house and dedicated in worship of Wyoming Carmelite monastery.
Subsequently reaching in Wyoming, Father Daniel Mary decided to acquire a considerable land
area, a new Mount Carmel. The Carmelites are known for selling gourmet coffee under the name
of Mystic Monk Coffee. Father Daniel Mary has a clear vision of expanding the monastery by
buying a 500 acre ranch. But could not afford the required capitals or price money to buy that
Ranch. Hence, they decided to overcome this issue by increasing their funding options and tend
to sell more coffee products.
At present, the roasting business uses high standardized quality, fair trade Arabica and organic
Arabic coffee beans. The most popular flavors were Cowboy Blend, Royal Rum Pecan and
Mystical Chants of Carmel. These all varieties were sold via the monastery’s website. Their main
targets were the U.S Catholic consumers who drank coffee and wished to support monastery.
The monastery has earned $75 thousand dollars with the development of Mystic Monk Coffee.
The Carmelite monks have $250,000 in donation and they earn $75,000 per year through Mystic
Monk Coffee. MMC’s net profit is 11% within the industry. Majority of sales are made through
online via MMC’s website and telephone orders accepted. The mission of Carmelites is to live a

peaceful life and making Father Daniel Mary’s vision achieved. Donation was received by the
monks that had helped them to increase the level of production and operations.
Analysis
Internal strengths and weaknesses
Low and poor sustainability as compared to the other competitors is one of the most considerable
weaknesses of Mystic Monk. Therefore, there is a need to enhancing its current business model
to gain an ample and desired amount of competitive advantage.
Strengths
The peak point of their strengths lies on the fact that they use highly standard and grade fair trade
coffee beans. Their production includes whole-shell coffee with caffeine and caffeine free coffee
with variant delightful flavors. Such wide variety of coffee is capable to fulfill the demands of
every coffee lover.
They have number of coffee products in different tempting flavors which is quite appealing and
attracts broad range of coffee preferences. With the provision of high quality and diversified
coffee products, Mystic Monk also inhibited a strength of skilled founders which has made its
operations ran smoothly.
More than 69 million US residents were catholic member and the Mystic Monk company target
the same segment of American catholic population who preferred coffee and wanted to
contribute to the monastery’s mission (Bradley and Botchway, 2018). Mystic Monk Coffee has
its unique approach towards coffee’s marketing in which to appeal more catholic towards it’s
“use their catholic coffee dollar for Christ and his catholic church” was publish on MMC’s
website so as to increase their productivity.
Its marketing function is carried out through posting advertisements on its official website.
Majority of its sales is also conducted through its website and telephone orders are also accepted
but on special requirements only (Kim and Lee, 2017). There are many other non- catholic
coffee drinkers but are health and social conscious and approximately thirty million people in
United States who prefer coffee so the coffee businesses can easily target the customers there.

Weakness
The weakness of Mystic Monk vary on the basis of its operations, lack of resources and lack of
business plan to raise the quality of existing products.
Poor inclusion of technological support and poorly equipped operational infrastructure has
slowed down its production capacity. The production plan of company has a maximum limit of
approximately 550 pounds per day due to the lack of new roaster with high production capacity.
Each monk work time is limited up to 6 hours a day. Apart from this there are many activities in
which they have to necessarily indulge themselves like prayer time, silent meditation and
worship. The monk’s was focused and primarily indulged with spiritual activities and spent eight
hours on prayer each day.
Low professionalism can be seen in achieving “continuous” competitive advantage and profit for
further business regulation (Aerts and et. al., 2017). Current profits are still not sufficient enough
to generate funds to reach up to the vision of company of purchasing Imra Lake Ranch.
Poor team work and team management of the company is its weakness that must be a serious
concern of the company. Only one person making the coffee reduces the operational excellence
of company and adversely affecting its internal management system.
Monk culture is all about devotion towards God, leading peaceful life, meditating but they do not
have business acumen (Brnjas and Tripunoski, 2016). Therefore, they do not have a properly
designed business plan and is severely limited to face some commonly occurred business issues
but not the advanced one.
Its limited marketing function is another weakness of the company which may become a
problematic issue in upcoming future. It is highly rely upon marketing through its official
website rather than social media platforms.
External environment
Porter’s Five Forces Analysis

The external environment of any industry can be determined by undergoing Porter’s Five Forces
Model which includes the threats of buyers and suppliers. In the context of Mystic Monk, the
external threat can be accounted by directly assessing its threats in terms of buyers, suppliers and
substitutes.
Threats of entrants
The threat of new entrances for Mystic Monk is moderate because it is already established brand
of coffee makers and has high market reputation. Therefore, it is a threat for new entrances due
to the implementation of its suitable business model and targeting functions.
Threats of substitutes
The threat of substitute for Mystic Monk is high due to the already established and preferred
brands like Starbucks, McDonalds, and Dunkin’ Donuts etc. Moreover, the population of US
highly preferred to have self brewed coffee at home which is also a certain type of threat for the
company and can be an influential factor for losing a large proportion of the customer (Brnjas
and Tripunoski, 2016). Moreover other than coffee, there are many similar drinks that can
become a substitute of Mystic Monk coffee. Therefore, it is a severe threat for the company
which is quite difficult to manage.
Competition rivalry
Rivalry for the selected brand is also high due to different new entrances and other successful
coffee shops which share an extreme competition with Mystic Monk (Gorgoglione, Petruzzelli
and Panniello, 2018). Along with it, there are many other coffees producing brands which are
giving competition to Mystic Monk Coffee and many of them do oppose for having religious
beliefs attached to it.
Bargaining power of suppliers
Bargaining power of suppliers for Mystic Monk is high due to the introduction of companies like
Starbucks, Dunkin’ Donuts, and McDonalds etc. Mystic Monk is facing issues related to its
suppliers as they are hiking their cost of supply. With this high bargaining power of suppliers,
Mystic Monk need to invest more in developing strategic business connections with its suppliers.

There is a need to increase more sustainable business model to increase the chain of suppliers
and distributors (Bradley and Botchway, 2018). Its suppliers were raising the costs of supply
and distributions which is going to affect its supply management system. Due to increasing
competitors in the same field, the suppliers are continuously getting high number of options to
approach other established and profitable brand.
Bargaining power of buyers
Mystic Monk inhibits a high bargaining power of customers or buyers due to the presence and
evolvement of other coffee producers with more strategic market analysis (Han and et. al., 2018).
Coffee producing brands have started to provide more advanced and delightful flavors in
comparatively moderate or similar prices as Mystic Monk. Hence, with this high bargaining
power of suppliers, the company may not achieve desired profit.
The above discussed threats or external environment of Mystic Monk, it is cleared that the
company still need to work on its strategies to overcome such unavoidable threats. The company
most importantly needs to focus upon the increasing ineffectiveness within its own internal
inefficiency with respect to lack of resources and manpower.
Similarly, opportunities related to the brand can be assessed by the help of identified internal
competency of the company. It may attain the interest of children by business expansion into
bakery products (Samper, Giovannucci and Marques Vieira, 2017). It can globally market its
products and increases brand recognition with the use of other social media marketing platforms.
Further opportunities can be assessed by the help of SWOT analysis of Mystic Monk.
SWOT Analysis
On the basis of the above discussion of threats, opportunities internal strength and weaknesses,
the SWOT analysis of the company can be conducted.
STRENGTH
It has been producing its products with high quality material and organic beans which his highly
demandable and preferable. It has number of flavored coffee products to provide delightful
options to its customers. Presence of skilled labors has made its operations easy for development
of any new business plan. All the additional gift hampers and products like T- shirts, coffee mugs

and other items to attract the customers digitally (Kurdi, 2018). The company has a strong aim to
target almost about 60 million populations through its products. It is also developing the items
like spiced tea to target customers of India and other emerging markets.
WEAKNESS
Mystic Monk do not have sufficient man power to operate its business activities which is a
serious issue that need to be rectify by the company. Other than this, poor planning related to the
market segmentation and customers targeting has delivered it poor opportunities for business
expansion. It has restricted and limited its customers’ targeting functions to the Catholics
population of US only (Ferreira and Ferreira, 2018). The poor team management and absence of
suitable provision for technological advancement is a weakness of the company. It will adversely
influence the growth rate of Mystic Monk in comparison to other emerging and abruptly growing
coffee brands.
OPPORTUNITY
Mystic Monk may have the opportunity of restructuring its services as per the culture of local
population. The expansion of its business model to target local coffee shops is an opportunity to
gain more profit margins. Furthermore it can also enhance its business model for the production
other food or bakery products to target a new segment of customers (Campos-Vega and et. al.,
2015). The coffee company Mystic Monk has an opportunity to enhance its existing business
model to target the customer who prefers tea over coffee in countries like India. It can raise its
partnership with different fund raising organizations or companies to restructure its business
outlet (Ferreira and Ferreira, 2018). The opportunities related to business activities such as
strategic acquisition of Imra Lake Ranch improve its revenue sales and generate additional
income through tourism.
THREATS
Mystic Monk may have number of threats at present as well as future that need to be reduced the
inclusion of more strategic business model. The company has various threats due to the
increasing and changing lifestyle and demands of customers (Mason, Cole and Goza, 2017).
People have become health conscious and generally prefer green tea or some other form of

herbal drinks other than coffee. Therefore, Mystic Monk needs to produce the components of tea
to attract tea lovers also. Nearly 150 Million people in America consume coffee and out of which
89% of US coffee consumers find it convenient to prepare or have the coffee at home by
themselves rather than purchasing. Packaged coffee for home brewing is easily available and
typically carried a retail price $7= $10 which is also a threat for Mystic Monk coffee.
On the basis of above discussion, the company could raise its production to another level with
the inclusion of suitable business model and advanced market analysis (Abdel-Basset, Mohamed
and Smarandache, 2018). There are certain strategies that have been opt by Mystic Monk to
develop its business, functional and operational excellence.
Business and functional level strategies
Business level strategies are generally refers to the development of overall business in terms of
all the different units of company. Whereas functional level strategy deals with the day to day
operations of all its departments like marketing, finance, Human resource etc.
As per the vision of company, it had an aim to acquire Irma Lake Ranch which could be able to
possible due to lack of capitals. Other than this, it has a vision of continuous development of its
production to increase profit margins (Furrer, 2016). This strategy can only be possible by
increasing its dependency on new technology and laying emphasis on procurement of new
roaster for high amount of production.
Mystic Monk has developed different business strategic actions through its strength to overcome
its weaknesses and threats (Dietz and et. al., 2018). Mystic Monk had undergone for the
expansion of its business to become a wholesale suppliers of coffee beans which will provide it
an opportunity to extend its reach to local suppliers.
The functional level strategy of Mystic Monk with respect to its product development is the
adoption of “differentiation strategy” for its product development and manufacturing. It has
incorporated such business strategy to increase its range of products with high level of
diversification as per the need of customers (Kang, 2016). With the adoption of differentiation
strategy, the brand has attained customers’ loyalty and interest. It includes the innovation in its
products according to the taste preferences of customers from different countries. For example,

the company has introduced “Chai spiced tea and black tea” to target and attract Indian
customers (Cai, 2018).
Functional level strategy of Mystic Monk was to approach a higher model of roaster with high
production capacity to increase its current production capacity. Along with this, Mystic Monk
was also trying to devise a plan for increasing its financial gains by indulging into the more
advanced business partnerships.
Recommendations
Recommendations can be made to alter and develop existing business and functional strategies.
Based on the above discussion, certain recommendations can be made for Mystic Monk coffee in
terms of its business and functional level strategies. The company needs to design a strategic
product development framework to retain its customers in such an increasing competition. As far
as the functional level strategy is concerned, the company may undergo for in depth analysis of
its customers’ changing demands and preferences. The company may also opt for a new product
development business of any other eatery which is best suitable with coffee. In this way it can
attract and target a wider segment of customers (Brnjas and Tripunoski, 2016). For example,
Mystic Monk must develop its plan of delivering bakery items like cakes, pastry, biscuits,
cookies which may become a successful means to target children and young generation as well.
Along with it, Mystic Monk must actively involve into the offers and delights on the occasions
like Christmas and they must develop a new marketing policies to reach more and more
customers through online as well as offline platforms.
The company may also sponsor some gatherings with a theme based on peace, harmony and
religious talk to promote its brand and to increase its partnerships with other monastery as well.
In terms of business expansion, the company may expand its business to other countries also. It
can target the customers of China and other emerging markets which have a comparatively low
availability of delightful coffee options (Campos-Vega and et. al., 2015). It can also approach to
the other channels of partners or monasteries to provide significant and required help to company
for fund raising that can helpful in conducting business activities like acquisition.

It should highly rely on increasing its supply and production branches to the local shops of the
country. This may help the company to raise the desired profits margins. Moreover the company
may also devise its customers’ targeting plan on the basis of their cultural diversity and taste
preferences according to it (Abe, 2017). The functional level strategy of the company is slightly
poor as compared to other competing brands. Employees of Mystic Monk are bounded with
religious customs which has delivered it a poor option of conducting business operations hence,
they do not tend to approach different segment of employees other than monks. The company
can opt for a non- secular employees’ or labors’ selection procedure to deliver an uninterrupted
service to its customers.
Conclusion
The presented report has summarized that the business plan of expansion of Mystic Monk Coffee
need to be improved for targeting the customers of different area or country. The above
discussion ahs represented the fact that Mystic Monk has some serious weak points such as not
selecting labors or employees out of the monk community which is producing loss to production
capacity. Other than this, the report has also devised the fact that dependency on social media
marketing may prove to be a best possible solution for Mystic Monk to easily target its
customers globally. Furthermore, the report has also laid emphasis on the fact that Mystic Monk
has highly focused upon the product differentiation strategy to attract its customers.

References
Abdel-Basset, M., Mohamed, M. and Smarandache, F. (2018). An extension of neutrosophic
AHP–SWOT analysis for strategic planning and decision-making. Symmetry. 10(4). p.116.
Abe, D.K. (2017). Rural Isolation and Dual Cultural Existence: The Japanese-American Kona
Coffee Community. Springer.
Aerts, R. and et.al. (2017). Conserving wild Arabica coffee: Emerging threats and
opportunities. Agriculture, ecosystems & environment. 237. pp.75-79.
Bradley, O.J. and Botchway, G.O. (2018). Communicating corporate social responsibility (CSR)
in the coffee industry: an examination of indicators disclosed. Sustainability Accounting,
Management and Policy Journal. 9(2). pp.139-164.
Brnjas, Z. and Tripunoski, I. (2016). Situational analysis in the function of developing company
competitive advantage. Bulletin of economic research, pp.134-153.Padmanabhan, V., 2018.
Cai, M. (2018). The Characteristics of Chinese and Westerners—From the Comparison of Tea
and Coffee Culture. Lecture Notes on Language and Literature. 1. pp.10-16.
Campos-Vega, R. and et. al. (2015). Spent coffee grounds: A review on current research and
future prospects. Trends in Food Science & Technology. 45(1). pp.24-36.
Dietz, T. and et.al. (2018). Indicators to compare and assess the institutional strength of
voluntary sustainability standards in the global coffee industry. Data in brief. 19. pp.570-585.
Duke, D. (2018). Porter’s Five Forces and the Coffee Industry. Management Teaching
Review. 3(3). pp.241-251.
Ferreira, J. and Ferreira, C. (2018). Challenges and opportunities of new retail horizons in
emerging markets: The case of a rising coffee culture in China. Business Horizons. 61(5).
pp.783-796.

Furrer, O. (2016). Corporate level strategy: Theory and applications. Routledge.
Gardens, D.B. and Krishnan, S. (2018). Ensuring the genetic diversity of coffee. In Achieving
sustainable cultivation of coffee (pp. 87-100). Burleigh Dodds Science Publishing.
Gorgoglione, M., Petruzzelli, A.M. and Panniello, U. (2018). Innovation through tradition in the
Italian coffee industry: an analysis of customers’ perceptions. Review of Managerial
Science. 12(3). pp.661-682.
Han, H. and et.al. (2018). Drivers of brand loyalty in the chain coffee shop
industry. International Journal of Hospitality Management. 72. pp.86-97.
Kang, H. (2016). Technology-Focused Strategic Planning In Service Businesses. Franklin
Business & Law Journal, 2016(1).
Kim, S.H. and Lee, S. (2017). Promoting customers’ involvement with service brands: evidence
from coffee shop customers. Journal of Services Marketing. 31(7). pp.733-744.
Kurdi, M. (2018). Analysis and Business Development Strategy Agroindustry
Herbal. AGRICULTURAL SCIENCE. 2(1). pp.45-56.
Makita, R. and Tsuruta, T. (2017). Fair trade and organic initiatives in asian agriculture: The
hidden realities. Routledge.
Mason, A., Cole, T. and Goza, N. (2017). STARBUCKS: A CASE STUDY OF EFFECTIVE
MANAGEMENT IN THE COFFEE INDUSTRY. Journal of International Management
Studies. 17(1).
Mighty, M.A. (2017). “We Likkle, but We Tallawah”: Maintaining Competitive Advantage in
the Crowded Specialty Coffee Market. Journal of international food & agribusiness
marketing. 29(1). pp.70-91.
Niemuth, S., Hamann, L., Luschnat, K., Smolarz, P. and Golombek, S. (2014). CSR in the coffee
industry: Sustainability issues at Nestlé-Nespresso and Starbucks. Journal of European
Management & Public Affairs Studies. 2(1). pp.31-36.

Samper, L., Giovannucci, D. and Marques Vieira, L. (2017). The powerful role of intangibles in
the coffee value chain. Economic research paper. (39).
The application of human resource management policies within the marketing organization: The
impact on business and marketing strategy implementation. Industrial Marketing Management.
69. pp.62-73.
Tognetti, F. and Nguyet Nguyen, H.T. (2018). Sustainable Business Practices and Customers’
Engagement in the Swedish Coffee Industry: A case study of Löfbergs.