Company and Product Analysis Calyx

Company and Product Analysis

Calyx and Corolla has managed to enter a profitable niche on the gift market, by which it delivered fresh flowers to its clients through fast delivery services. At present, it is facing an expansion decision, following a period of consolidation. This report will analyze the strengths and weaknesses of the company, in terms of presence on the market, quality of staff and issues the company has faced in the last period of time. Further more, we will explore the possible solutions that the company faces and quantitatively analyze the options.

The first strength that the company has and that needs to be mentioned is the idea itself. As presented in the case study, Calyx and Corolla not only pioneered an idea, but were one of the few, if not the only company to be able to resist in the market. This comes to show that it was the only company mastering the business idea to a degree to which it is now able to explore an expansion possibility. The fact that the idea to link consumers and growers was a new concept meant that the company has an upper hand on its possible competitors.

The second important strength the company has is the partnerships schemes it has been able to carefully build in time. We are referring here to its business relationships with some of the important growers in the country and, just as important, with Federal Express. As seen, Calyx and Corolla represents only one of the three legs that sustain the table. Each of the other two plays a crucial role in the business and the way these business relationships are handled by the CEO and founder herself show their importance. First of all, the growers are carefully selected and the company only works with the best of them. Ruth Owades chooses to periodically visit them in order to maintain relationships and overcome problems. The relationship with Federal Express grew from Calyx being a minor account to servers being installed in the company's headquarters so as to be able to supervise and track orders.

The third important strength we need to refer to is the force and quality of the entire team operating at Calyx and Corolla. The sales staff and customer service representative ensured the quality of the most important relationship of all, that with the consumers. The letters received from the clients show the level of content and customer retention, mainly due to the quality of service representatives. The selection methodology, as well as the training and motivation schemes also played a role in finding and working with the most adequate people. Further more, Ruth Owades herself has an immense experience in the mail delivery field and is successfully backed up by Fran Wilson and Ann Hayes Lee.

Among the weaknesses, one can think of the seasonal aspect and the fact that the company needed to find solutions for problems that could appear along the way due to bad weather. The commitment to a client meant that the company needed to be able to distribute the required flower at any time, day or night, and any season. Nevertheless, unexpected weather conditions in California, for example, meant that other growers in warmer regions had to be found and used for the orders. This was an assumed risk, but nevertheless a weakness.

Other weaknesses may include the extreme dependency on Federal Express for the delivery part, although the company has also been using United Parcel Service for less perishable goods. The relationship with Fed seems however strong enough to be able to sustain any future changes in Fed's strategies.

Several aspects from the case study point out towards the fact that C&C resided almost exclusively on the gift market, with corporate clients and promotional "tie-ins" covering the remaining spectrum. In my opinion, there are two main opportunities worth investigating at the present time.

The first one, identified by Ruth as well, refers to the promotional tie-ins, where important opportunities could bring about significant incremental margins and new mail order customers. The market is not yet a mature one and people still have to get used to the idea of ordering the gift flowers from a catalogue rather than buying them themselves at the flower shop. One opportunity for the company is to capture more gift business and divert consumers' options from traditional florists.

On the other hand, the second opportunity, closely tied to the flower market, but with ramifications into other areas, refers to events such as weddings and funerals, less exploited until now, as well as corporate events and parties, practically any activity involving a decorating opportunity and where fresh flowers are needed. There are several advantages and disadvantages worth investigating when considering an expansion on the decorative market.

First of all, C&C needs to acknowledge that moving into the decorative business involves (1) a completely new set of competitors and (2) the need to be able to adapt the company's structure to the challenges a new market involves. To the latter, we may add the fact that a strong financial support is needed if the company is to be expanding on such a market. The most important challenge seems to be the new competition. On the niche market it has dominated so far, the company was able to dominate its competition by providing the best solutions. On the other hand, a new and larger market brings about stronger and better prepared competitors.

Among the advantages of such a solution, one may mention the new opportunities that a larger market presents. C&C can use the excellently well managed supply chain it has built on the market it currently operates and expand it to fit the needs and demands of consumers in the decorative markets. One may consider, for example, the need for fresh flowers delivered in due time for a wedding.

So, following this brief internal and external analysis, given the internal strengths of the company, most notably the team and the business relationships it has managed to form and consolidate, Ruth Owades should choose an aggressive growth strategy that should be directed not only towards the flower market, but also towards other segment in the decorating market. The main problem it needs to work out is the financial backing issues, as it is less likely that the company currently has the financial strengths to backup such an expansion.