Calyx and Corolla Case Analysis

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Mail Order

In this model, a customer places and order for the flowers to be delivered by mail. There are two main players in this market. One is FTD and the other is C&C.

FTD Business Model

FTD was a member-owned, worldwide cooperative of 25,000 florists. Its members took orders from local customers for delivery by member florists at other locations. Although there was a catalog of “FTD Bouquets” at every member location, there was no guarantee that the delivery florist would deliver the freshest flowers in their inventory. Typically a consumer would pay an extra $3.50 transmission fee per order and, depending on location and distance, an additional $6.50 for delivery. The advantage with this model was the convenience to order flowers and have them delivered. However, from a consumer stand point this model adds an additional step to the traditional model in the supply chain and adds to the price of the flowers.

1-800-FLOWERS Business Model

One of the largest members of FTD was a 1984 startup called “1-800-flowers”, which was becoming increasingly popular. When a customer calls 1-800-FLOWERS, one of 300 sales people in its telemarketing center would take an order and transmit it by FTD or another service to a network of florists around the country. Minimum orders were $35 and went up in $5 increments. The retail customer was charged a $2.96 relay fee and a $5.99 handling fee in addition to the price of the flowers. 1-800-flowers received a fee of 25% of the flower order from the delivering florist. Similar to FTD, 1-800-flowers offered convenience to order flowers and get delivered. From the consumer stand point this business model followed the most inefficient supply chain model. It added additional cost to the consumer on top of 7% FTD fee.

C&C Business Model

Calyx & Corolla represented a true departure from traditional channels of distribution by directly linking the consumer with growers and, thru Federal Express, growers with consumers. The C&C catalog included fresh flowers, dried flowers, a selection of plants such as bonsai, a variety of vases and other floral accessories. C&C price points started at $23 including delivery charge for a single stem of protea to $60 to $70 for bouquets of several dozen flowers. Also, they offered vases starting at $12. Most single items ranged from $30 to $40. The C&C model removed the distributor and wholesaler from the supply chain, and it invented the most efficient model in the flower business. It provided the best quality flowers to consumers which lasted the longest. At the same time, we can say C&C was not a well-known company to the consumer. C&C cannot deliver flowers the same day or next day. The consumer had to wait for two days or more to receive flowers. If C&C could provide option of same day and overnight delivery of flowers, then it would be able to compete with traditional florists and supermarkets as well.

Company SWOT Analysis

S.W.O.T. ANALYSIS

STRENGTHS

DESCRIPTION

Unique channel of distribution

Owades pioneered the concept of selling fresh flowers by mail by removing intermediary commissions in the supply chain. This came to be one of C&C’s biggest strengths in the flower distribution industry.

Innovative direct mail concept

Top of the line distribution and transportation arrangements. Able to take orders via telephone, fax, and mail.

Multiple suppliers

Orders were taken at a San Francisco central office, then, sent to 30 different flower growers around the U.S.

Beautiful flower catalogs

Catalogs illustrating the flowers being sold helped sales because consumers were able to see the product before committing to the purchase.

Federal Express

The best in the industry delivered the flowers all over the U.S. faster and more careful than anyone. C&C developed a contract with FedEx.

Fresher long lasting flowers

Due to fast distribution, customers received much fresher flowers. Fresher by about 7-10 days.

Low prices

Prices included delivery fee and were competitive with conventional florists.

Florists Telegraph Delivery (FTD)

Even when FTD had catalogs at every member florist (25,000), there was no guarantee that customers would receive the freshest flowers.

Cutting down delivery time

This separated C&C from rivals. They delivered roses within 1-2 days from the time they were cut. Anthuriums were delivered within 3-4 days. FTD delivered theirs in 1-2 weeks and 2-3 weeks respectively.

Owades' genuine care

Owades would visit growers to sort out problems, negotiate prices, and strengthen relationships.

Contracts with Growers

Great strategy to prevent growers from supplying any other mail-order retailer.

WEAKNESSES

DESCRIPTION

Not growing C&C’s own flowers

This would potentially affect C&C because many other distributors and wholesalers grew their own plants. Owades only engaged in distribution.

FTD's additional support

FTD also offered its members promotional and advertising support, supplies, educational programs, marketing research, publications, and credit card processing.

Winter seasons

This was huge because it dealt with mother nature. The winter is detrimental to flowers and its industry. It took Owades and her team lots of sleepless nights and combined efforts to deliver customers what they promised.

OPPORTUNITIES