Father Daniel Mary, a monk in Clarke, Wyoming, has a vision to move and ultimately expand the Carmelite brotherhood to a 496 acre monastery (Irma Lake Ranch). Here, he could accommodate new men into the brotherhood, and build his business establishment. For the past year Father Mary and his brotherhood have been purchasing Arabica coffee beans from Seattle, to distribute under the name Mystic Monk Coffee. The problem that arises is the capacity that the current monastery can produce (540 lbs/day). There are also many expenses the monks face while currently operating. If the monks could move to Irma Lake Ranch, many problems could be resolved; unfortunately, there are financial barriers to purchasing the ranch. An execution plan needs to be developed to realize the opportunity of purchasing Irma Lake Ranch.
•Healthy organic Arabica beans
•Accessories and tea are also advertised on web site
•Online shopping and shipping
•Variety of coffee flavours available
•Markets favourably to catholic people who take up much of the population
•Organic coffee could be a trend
•Monk’s do not have business experience
•Limited capacity at current location (540 lbs/day)
•Highly addictive due to caffeine content
•Production is limited due to prayer and worship
•Beans are purchased instead of grown
•Poor revenues (11%)
•Increase marketing and advertisement
•Collaborations with large companies (Tassimo, Keurig)
•Distribute in grocery stores
•Integrating new products
•Environmental conditions (weather)
•Economic conditions (recession)
•Established competition (Folgers)
•Currently depend on donations
There are two main options that Father Mary could choose to execute. The first option is to forgo the purchase of the ranch and continue operations in Clarke, Wyoming, since he does not have the down payment needed to finance the ranch. The second option would be to ask the current owners of the ranch if they would be willing to gift half the land to the monks with no monetary repayment, and the half owing could possibly be on a lease to own contract. In return for such a generous donation, the current owners of the ranch could act as shareholders in the company. Discussion of the Alternatives
Option 1 – Remaining in Clarke, Wyoming
Father Mary could decide to forgo the opportunity at Irma Lake Ranch and continue operating at a limited production in Clarke Wyoming. Since the main focus of the Carmelite monks is spiritual and the majority or their day is dedicated to prayer and worship, then staying where they are could be beneficial due to the fact that the coffee business is not their main priority. Staying where they are means they can still dedicate the time needed to their faith and meet the quota of 540 lbs/day. Here they are still making a small net profit of 11 percent of revenues, and donations. Since the monks do not leave the monastery very often, they do not need a lot of disposable income, so they could continue to live in Clarke, Wyoming comfortably.
The downside to this option is that the coffee company will never be able to expand. They will only ever be able to make 540 lbs/day with an 11 percent profit margin. If the customer base becomes larger, coffee will be on back order from Seattle. This could lead to problems with customer retention.
Option 2 – Irma Lake Ranch
If Father Mary was able to purchase Irma Lake Ranch, this would offer great opportunity for Mystic Monk Coffee. Production capacity could be almost unlimited, if the time was put towards it. The space here could be used to grow their own coffee beans, which would help to reduce costs associated with buying from Seattle. The monks could also use the 496 acres to expand to other markets like livestock and harvesting...