Executive Summary
Calyx & Corolla is a young company that offers a very unique choice for customers who are interested in buying fresh flowers. Fresh flowers industry valued approximately $9 Billion in the United States in 1990 with steady market growth rate of 7.7% since 1985. However, the market potential did not reach the top yet. US fresh flowers market still has more room to grow. Per capita consumption of flowers and plants in the US was $36 per year, while the average in Europe was $60.
Since a flower diminished its value everyday due to lacking of freshness, efficient distribution is the key to the flower industry. Calyx & Corolla has a distinctive way of delivering flowers to the consumers. Calyx & Corolla links its customers directly to the growers via the reliable delivery service of FedEx, whereas other companies rely on the traditional distribution channel which contains at least four layers: growers to regional distributors, regional distributors to wholesalers, wholesalers to retailers / florists, and florists to end-users. Thus, Calyx and Corolla can deliver fresher flowers to its customers bypassing those distribution processes. Calyx and Corolla also earns higher profit margin than its competitors due to its uncomplicated cost structure. For instance, Calyx and Corolla does not have to spread its profit to distributors and wholesalers.
FTD was the biggest player in the fresh flowers market. FTD was a member-owned, worldwide cooperative of 25,000 florists. Florists usually used FTD to provide delivery service beyond their service area. The florists who originated the order received 20%, the florists who delivered the order 73%, and FTD 7%. The powerful network of 25,000 florists was the main advantage of FTD to penetrate the ...