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Calyx and Corolla

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Calyx and Corolla Case Report

Calyx & Corolla was a new entrant into the $8 billion flower industry in the United States in 1991. Through the use of overnight air freight (Fed Ex), information technology, an 800 number, and a catalog, Calyx & Corolla was able to bypass three layers of distribution and provide fresh flowers directly from growers to consumers. As a result of their efficient distribution system, Calyx and Corolla changed the way flowers were distributed to consumers.

Strengths and Weaknesses
I. Strengths
A. Good niche and mission. Calyx and Corolla filled a consumer need. Consumers wanted very fresh and long lasting flowers and the company delivered it. Efficient distribution was the key to flower industry and the company was able to shorten delivery to customers by bypassing the middle distribution layers, and provide much faster deliveries than traditional FTD deliveries. For example, Calyx and Corolla delivered roses from growers to consumers within 1-2 days of purchase order compared with one to two weeks for other FTD retailers and florists.

B. Sales growing at a faster rate than cost of goods sold. Projected FY4 and FY5 also had projected sales growing faster than cost of goods sold. See graph for details (Derived from Exhibit 1).

Growth rate 1988-1989 to 1989-1990 Growth rate 1989-1990 to 1990-1991 Growth rate FY3 to FY4 Growth rate FY4 to FY5
Sales 4.31 1.55 .49 .61
Cost of goods sold 4.14 1.52 .42 .58

C. Good creative catalogs that have appealing photographs, as well as educational information.

D. High customer satisfaction. From Exhibit 2, customers showed genuine satisfaction with Calyx and Corolla's products and services.

II. Weaknesses
A. Business depends very critically upon Fed Ex. If Fed Ex had a major disruption to their delivery system, flowers would not be delivered on time,...

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