Calyx & Corolla
What is the gap in market structure for Calyx and Corolla's business model?
The traditional distribution chain for the fresh flower market is: grower, distributor, wholesaler, retailer and finally the consumer. As a result of the number of participants in this structure, a flower may be as much as seven to ten days old before it is available for sale in a retail store. Additionally, the industry participants do not confine themselves to a single role. For example, most growers distribute some flowers directly to local or more distant wholesalers, and many distributors and wholesalers engage in some of their own production. The fragmentation within the channels of distribution results in a rather inefficient distribution system. This gap in the fresh flower market structure was noticed by Ruth Owades who capitalized by creating Calyx & Corolla (C&C), which is a true departure from traditional channels of distribution. The business model of C&C is as follows: orders from customers are received by telephone, fax, or mail at the central office in San Francisco and then sent via fax or computer to the thirty flower growers who supply C&C. The growers, in turn, pack and ship individual orders and send them directly to consumers by Federal Express. As a result, C&C is able to substantially reduce the time it takes to deliver flowers to the consumer's door, typically only a few days after the flowers have been cut.
2) Evaluate the strengths and weaknesses of C&C versus a conventional business retailer? What market segments is C&C most suited to take advantage of?
Strengths of Calyx & Corolla compared to a conventional flower retailer: 1)
The most obvious strength and the greatest competitive advantage that C&C has when compared to a conventional flower retailer is the ability to deliver fresher longer lasting flowers. As a result of pairing growers with Federal Express, C&C is able to deliver flowers within a couple of days of being cut...
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