Calyx and Corolla is a new company in the fresh flowers market. They have pioneered theconcept of selling fresh flowers by mail. In its short lifetime, C&C has established strongrelationships with many large growers, who cut flowers when ordered, thereby increasing the lifeof the buds tremendously over typical florist shops whose buds may already be a week old when purchased. They have also developed a strong relationship with Federal Express, who is their primary distributor. Federal Express has a well-established brand name, known for speedy, on-time, and reliable delivery, giving C&C’s promise for freshly delivered flowers credibility amongcustomer who are unfamiliar with C&C’s brand.C&C reaches customers through a catalogue, which is mailed out to repeat customers and rentedmailing lists. Individual consumers are more familiar with competitors such as FTD, who has anational network of florists. C&C’s top executives, however, are no strangers to the mail-order business, which gives them at least somewhat of an edge.Instead of going for a full summary we would take up different models to split open the case.Firstly we try to look at the Calyx and Corolla in light of Porter’s frameworks.
Porter’s five forces industry analysis:
Calyx and Corolla (C&C) is a company started by a entrepreneur, Ruth, M. Owades in 1988which delivers flowers to the end customers using the courier service provided by Fed ex.Customers are provided with an option to order fresh flower and bouquets from a four-colorcatalogue by placing an order to the company, which also shows floral bouquets, plants,preserved designs, and corporate gifts. The fresh flower order goes immediately to one of 30growers in the C&C network, who picks and packages the flower and ships them via FedEx.The flowers arrive fresher and last about 10 days longer than flower ordered from stores-bestretailers. The credit for such an efficient value chain goes to the sophisticated system andC&C strong alliances with FedEx and the grower. Calyx & Corolla was primarily a mailorder company, but management is now considering expanding their market and is unsure of how they should proceed. FTD
florist network is one of the major competitors of Calyx &Corolla which has a member owned worldwide co operative of 25000 florists
.The calyx & Corolla top management team has exceptionally talented members like Owadesand Lee but the things that the company is concentrating upon is that of the future strategy of the company to tackle various externalities faced by the company in future due to arrival of IT as a very strong medium. Again to capture significant market share they will have to spendspecific amounts on the advertisement therefore it will have to assess the financialimplications of spending heavily on the advertisements. Moreover what should be thestrategy to advertise is also an issue because the catalogue medium was already fetchingresults then would it be safe getting into aggressive indirect advertising.
VALUE CHAINBefore Calyx & Corolla:
The industry was highly fragmented at each and every level, where small family run businesswere the major players. The channel of the flowers from the field of a grower to the consumeris depicted in the above flowchart. The consumers were buying 59% of flowers from theflorists; supermarkets were holding a share of 18% in this market.
Payments: Growers were paid by the distributors after a span of 60 to 90 days and distributorswere paid by the whole sellers on the same terms. Retailers had to pay in cash as they were
FTD stands for Florists' Telegraph Delivery
The members of FTD took orders from local customers for delivery by member florists at other locations.
The data has been taken from the case facts given in the Calyx&Corolla case