Case #1 – Mystic Monk Coffee
- Describe the 5 competitive forces in the industry.
- Draw up a strategic plan for this industry. Include all major players.
- What are the key success factors in this industry?
- Which of the five generic strategies best describes the organization’s strategy? Why?
- Please provide your own recommendations for the organization.
Mystic Monk Coffee
5 COMPETITIVE FORCES IN THE INDUSTRY
Power of Buyers
The bargaining power of buyers is high due to the availability of different coffee substitutes. In the competitive coffee market, buyers switching is quite low. Regarding taste, price, and available options are available
Power of Suppliers
The power of the supplier is high. Mystic Monk Coffee depends on the concentrated supplier. Availability of high-quality coffee ingredients is possible due to a focused supplier strategy. It also justifies the differentiation.
Threat to Substitutes
The threat to substitute is a strong force. Many coffee makers or sellers exist in the competitive landscape. Coffee products are everywhere, and depending on customer segmentation, different products at different processes are capable. Big coffee giants contain loyal and satisfied customers, and it depicts the customer preferences.
The threat of New Entrants
Moderate business and supply chain has made it a moderate force. Apart of it, the firm has to sustain a good brand image in the coffee market. It looks moderate because it depends on a firm’s capability and resources.
Competitive Rivalry
Competitive rivalry is high due to the existence of significant coffee firms. Major competitors are Starbucks, Costco Coffee, and Subway. Thus, it seems tough to sustain the image in the stiff competition despite containing a different ideology (Nguyen).
STRATEGIC PLAN OF THIS INDUSTRY
The strategic plan of the company is to increase sales, generate revenues, and expand the business in different US regions. The firm wants to enhance its competitive positioning, and religious factors can help to contain emotional and sentimental attachments with people. It can open ways for the management of the company to get an edge over other coffee shops (Nguyen).
THE CRITICAL SUCCESS FACTORS IN THIS INDUSTRY
Essential elements of success in this industry are in the limelight. For Instance, the firm can gain success by meeting customer needs. Customer-oriented strategies can facilitate becoming a relevant firm in this industry. Also, efficient supply chain and production is a crucial source to reduce the business cost and create a good impact on profitability. Firms are looking to reduce the cost and keep the high profit margins. The differentiation in the coffee industry is a success factor. Coffee companies aim to differentiate both product and business. Making coffee products different from other companies shapes customers. These customer perceptions go in the favor of companies (Nguyen).
COMPANY’S GENERIC STRATEGY
The generic strategy of Mystic Monk Coffee is a broad differentiation. The management aims to make coffee products, which are tough to imitate by other companies. Broad differentiation is possible through streamlining the quality and ideology. A religious association such as the Wyoming Catholic mug is a unique idea, which differentiates the brand (Rummelhoff). This generic strategy has been set by the company management to get a competitive advantage. However, with time and evolvement, the firm may change its generic plan to keep the edge and emerge as a strong force in the competitive coffee industry. So far, broad differentiation is successful.
RECOMMENDATIONS FOR THE ORGANIZATION
Due to religious background, the company can grab the customer range. However, the firm must come up with a good strategic plan in this industry. For Instance, Mystic Monk Coffee must have to develop a product line that can serve several customer segments. Possibly, the firm may lose customers due to religious association. It must create a division of the business that can serve the general public in urban areas. Selling coffee online for churches and other religious places may limit business operations. Thus, creating the business division and serving customers through a broad range of products is a right approach to claim the competitive advantage (Ray).
Work Cited
Nguyen, Tien. “5 Trends Spotted at the U.S. Coffee Championships.” Food Republic. Food Republic, 24 February 2015. Web. 22 November 2018. http://www.foodrepublic.com/2015/02/24/5-trends-spotted-at-the-u-s-coffee-championships/.
Ray, Steve. “Mystic Monk Coffee.” Catholic Convert. Catholic Convert, 5 February 2009. Web. 22 November 2018. https://www.catholicconvert.com/blog/2009
/02/05/mystic-monk-coffee-by-jerry-usher/.
Rummelhoff, David. “Giveaway: Mystic Monk Coffee & Wyoming Catholic Mug.” Epic Pew. Epic Pew, 13 October 2015. Web. 22 November 2018. https://epicpew.com/giveaway-mystic-monk-coffee-wyoming-catholic-mug/.
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