Mystic Monks Coffee Memo
memorandum
TO: CHERYL TRAHMS
FROM:
SUBJECT: MYSTIC MONKS COFFEE CASE
DATE: 11/6/2013
SUMMARY:
The Carmelite Monks of Wyoming are interested in expanding their current monastery through the purchase of an $8.9 million ranch to accommodate more monks and provide a larger place to worship the Lord. The monks are planning to earn money for this 500- acre ranch through fund raising, donations and through sales that are generated by their Mystic Monks Coffee Company. Mystic Monks Coffee sells premium roasted coffee beans to the general Catholic denomination through a website that is operated by the Carmelite Monks. This web based company generates a low net profit of $6,160 each month and is in need of a stronger strategy to raise profits and ensure the purchase of the $8.9 million ranch in an adequate amount of time. Father Daniel Mary, the Prior of the Carmelite Monks, is using a differentiated feature strategy in hopes to raise enough money to execute their vision of a larger monastery.
Table 1- Mystic Monks Coffee Financial Data (per month):
Sales:
$56,000 Operating Costs:
Cost of Goods Sold:
Cost of Sales:
Shipping Costs:
Broker Fees:
Total Costs:
$20,720
$29,120
$16,800
$10,640
$1,680
$49,840
Net Profit:
$6,160
Table 2- Financial Analysis of Mystic Monks Coffee Shop (per month):
Gross Margin Profit
56,000-29,120 = 48% 56,000
48% of revenues to cover operating expense and yield a profit.
Operating Profit Margin (Return on Sales)
56,000-20,720 = 63% 56,000
63% profitability of current operations without regard to interest charges or income taxes.
Net Profit Margin
(Net Return of Sales)
6,160 = 11% 56,000
11% profit per dollar of sales.
Addressing Mystic Monks Coffee Case
The present situation that needs to be addressed in this case is to improve the strategies of Mystic Monks Coffee Shop in order to gain enough profit to purchase the
TO: CHERYL TRAHMS
FROM:
SUBJECT: MYSTIC MONKS COFFEE CASE
DATE: 11/6/2013
SUMMARY:
The Carmelite Monks of Wyoming are interested in expanding their current monastery through the purchase of an $8.9 million ranch to accommodate more monks and provide a larger place to worship the Lord. The monks are planning to earn money for this 500- acre ranch through fund raising, donations and through sales that are generated by their Mystic Monks Coffee Company. Mystic Monks Coffee sells premium roasted coffee beans to the general Catholic denomination through a website that is operated by the Carmelite Monks. This web based company generates a low net profit of $6,160 each month and is in need of a stronger strategy to raise profits and ensure the purchase of the $8.9 million ranch in an adequate amount of time. Father Daniel Mary, the Prior of the Carmelite Monks, is using a differentiated feature strategy in hopes to raise enough money to execute their vision of a larger monastery.
Table 1- Mystic Monks Coffee Financial Data (per month):
Sales:
$56,000 Operating Costs:
Cost of Goods Sold:
Cost of Sales:
Shipping Costs:
Broker Fees:
Total Costs:
$20,720
$29,120
$16,800
$10,640
$1,680
$49,840
Net Profit:
$6,160
Table 2- Financial Analysis of Mystic Monks Coffee Shop (per month):
Gross Margin Profit
56,000-29,120 = 48% 56,000
48% of revenues to cover operating expense and yield a profit.
Operating Profit Margin (Return on Sales)
56,000-20,720 = 63% 56,000
63% profitability of current operations without regard to interest charges or income taxes.
Net Profit Margin
(Net Return of Sales)
6,160 = 11% 56,000
11% profit per dollar of sales.
Addressing Mystic Monks Coffee Case
The present situation that needs to be addressed in this case is to improve the strategies of Mystic Monks Coffee Shop in order to gain enough profit to purchase the