Mystic Monk Coffee
MBA 688: Business Strategy and Stakeholder Responsibility
Professor John C. Byrne, Ph.D.
February 23, 2015
Presented by Mashal Shaikh
Executive Summary More funds are needed to establish the new Carmelite Order than exist. Thus, a summary of revenue sources, expense statements, and the business model of Mystic Monk Coffee is presented. The coffee industry is also analyzed. Characteristics of Mystic Monk’s Coffee and how that affects its revenue generation is discussed. An analysis on increasing production capacity and subsequently reaping increased revenues is discussed. Finally, recommendations for converging to full production capacity and revving up marketing are given.
Father Daniel Mary aimed to establish a new Carmelite Order of the Monks in the Rocky Mountains. The current order includes a ranch home on 42 acres to accommodate 13 monks. The monks are considering Irma Lake Ranch, a 496 acre property with a 17,800 sq ft remodeled residence, caretaker house, guest house, hunting cabin, and dairy and horse barn, for $8.9 million. Considering the scope of the revenue generating business and donations they have received, Father Daniel Mary must determine how to fund the new establishment. While the existing operations generate revenue, the monks must increase product capacity and increase volume to generate more sales of coffee to amass enough funds to purchase Irma Lake Ranch.
Summary of Facts Currently, the Carmelite Order has a donation of $250,000 from the community. Local business owners have also started a foundation to amass donations in the monastery’s name. In the first year, Mystic Monk Coffee grossed $75,000. Its total revenue per month is $6,500. Cost of goods sold is 30% of revenue, inbound shipping is 19%, and broker fees are 3%. As operating expenses are 37% of revenue, the margin for the coffee business is 11%. The monks pay a coffee bean producer in Seattle the prevailing wholesale market