Situation Analysis:
Value chain analysis at C&C and traditional florists:
In a typical flower industry, growers are mainly engaged in selling flowers to distributors. After that, these distributors sell flowers to the wholesalers. The next participant in the chain that got a product is a retailer and then ultimately to the consumers. In many cases, distributors and growers are the same company or individual. When growers and distributors are the same persons, one stage in the overall value chain decrease and distributors get engaged in selling flowers to the customers on a direct basis.
Figure 1: Traditional distribution network
On the contrary, C&C is engaged in an extremely simplified version of supply chain. C & C deliver its flowers directly through its growers, and that is the basic reason behind the freshness of flowers. Growers itself make the flowers packed and sent it through courier service (FedEx). In this way, the company has successfully differentiated itself by giving extra fast and efficient delivery service. In addition to this, eliminating layers help the company to decrease its cost as well.
Strengths and weaknesses of the Calyx & Corolla:
Strengths
The strengths of the company include quick delivery and to ensure that the customer get fresh flowers always. The company in order to become competitive, delivers directly to the customer cutting the cost of intermediaries and providing a product at a cheap price. Product illustration via a catalog gave the company an edge by making the selection easier for the customers. To be in the good books of the customer, supported the offerings with money back guarantees and offered low prices in high peak season.
Weakness
Lack of control over the shipment method put the company at a weaker side because the company cannot control the quality of the flowers. The company highly depends on Federal Express to deliver the products carefully. High dependency of the company over the Federal Express can also result in losing customers as the company does not control the quality delivery of the product. Inefficiency to meet the orders when the demand is high because the company is only isolated in the US. Not meeting the demand will result in dissatisfied customers. Chances of losing customers as the company does not have any physical arraignment for displaying the product.
Core competencies:
The core competencies of C&C include its relationship with the growers. Since the company has provided the growers the opportunity to increase their sales chart by providing them a new distribution channel and reaching more customers than they are already handling. Moreover, the company gave the growers an opportunity to do business in the off season as well, thus increasing sales and gathering more profits. These opportunities provided by C&C to the growers made the growers attracted to do business with the company and providing quality product and services to the company. Secondly, good relationships with FedEx is also key for the company’s success. FedEx has the responsibility of delivering the product, and in order to make sure that the customer get exactly what was delivered, the company must pay attention to sustaining good relationships with the FedEx. Adding to the core competencies of the company was its sales staff and the customer service representatives. These people were responsible for dealing with the customers and providing them good service from the placement of the order till the delivery. The company’s ability to hire people with sufficient knowledge about flowers along with an interest in the field in order to facilitate the customers in an efficient manner. Furthermore, the senior management was deeply involved in designing new product lines and staffing and providing training to the new employees, which added another core competency in the C&C’s cart. Also, the company was facilitating the growers by providing label and cards and also vases assuring a unique and uniform quality while delivering the product.
Porter’s five forces Analysis:
The porter five forces model examines the market conditions with respect to the ease of doing business. It examines the extent to which different market forces are capable of driving demand and controlling profit terms for the companies in the market. It also determines the extent to which external forces may affect the performance of companies in the respective market...............
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Describes a new record of $ 8 billion flower industry in the United States. Combining the use of overnight air freight (Federal Express), Information Technology, Room 800, and the directory of the cup and Corolla had to change the way the flowers have traditionally been distributed, bypassing three layers of distribution and the provision of very fresh flowers direct from producers to consumers. Frame the question of how to run the company should grow. "Hide
by Walter J. Salmon, David Wylie Source: HBS Premier Case Collection 31 pages. Publication Date: November 1, 1991. Prod. #: 592035-PDF-ENG
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