Dutch Flower Cluster Case Study Solution
Major Challenges
Dutch Flora industry is facing different major challenges which create more hurdles for the flower cluster. One of the major challenges that flower cluster face in Dutch flora industry in Netherlands is instance competition by the various competitors in the market. Due to the growing demand of the flowers, various companies enter in the market to earn better margins. The dominating players in the market that are supposed to be threatening the Dutch flora industry in Netherlands are Colombia (the world second largest flower producer after Netherlands) with a global export of 13% market share in 2008, Ecuador, Germany and China. The growing demand and the existence and entrance of the various players in the market is consider to be one of the major challenge of cluster. Another challenge face by the cluster is shrinking in profit margins due to high transportation cost. After cultivation the flower must have to be reached to the end consumer with in shorter period of time due to this reason grower has to send the flower immediately to the whole sellers, retailors and the supermarkets by using the efficient mode of transportation. For the quickest mode of transportation the grower has to pay higher prices in order to send their flowers to the end consumers, which ultimately shrinks the profits margins. Another major challenges for the cluster is the unfavorable climatic conditions. Due to unfavorable climatic conditions the growers are obliged to use greenhouse and other technology in order to produce efficient quality of flower which require high gas and energy cost and resulting in increase in cost.Fluctuation in the prices of fossil use which is used in green house put pressure on the cluster. The low interest for the auction is also supposed to be one of the major challenge for cluster. The customer, whole seller and retailors directly link to the grower in order to save its overhead expenses.Rapid technological development such as use of internet application and remote buying is one of the major threat for the flower auction. Customers require different types of flower on different occasions, managing the demand and to export flower by maintaining the quality and perish ability, increasing the cost of the flowers and the overhead cost at different levels of clusters.
What would you recommend?
Recommendation
It is recommended that in order to reduce the threat of competition, the Dutch flower industry would introduce its products in different market with an aim of improve customer base and maintain its competitive position. The continuous technological innovation would reduce the effects of environmental changes on the production of the flowers. Due to reduction in auction participation, Dutch flowering industry would provide the incentives in order to regain the interest of participation. The industry should also introduce the online applications for selling its flowers. The industry would also find new methods of the flowers’ cultivation of that would improve the quality and reduce the cost. Additionally, the growers should improve its quality of flowers and produce new varieties in order to improve the customer base and to earn better profit margins………
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