Calyx and Corolla Case ReportIntroductionCalyx & Corolla was a new entrant into the $8 billion U.S. flower industry 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 levels of distribution and deliver 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. StrengthsA. Good niche and mission. Calyx and Corolla filled a consumer need. Consumers wanted ultra-fresh, long-lasting flowers, and the company delivered. Efficient distribution was key to the flower industry, and the company was able to shorten delivery to customers by bypassing intermediate distribution layers and providing 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 to one to two weeks for other FTD.B retailers and florists. Sales grow at a faster rate than the cost of goods sold. FY4 and FY5 also expected sales to grow faster than cost of goods sold. See graph for details (derived from Appendix 1). Growth rate from 1988-1989 to 1989-1990 Growth rate from 1989-1990 to 1990-1991 Growth rate from 3rd year to year 4 Growth rate from 4th year to year 5 Sales 4.31 1, 55 .49 .61 Cost of goods sold 4.14 1.52 .42 .58C. Good creative catalogs with eye-catching photography and educational information.D. High customer satisfaction. From Exhibit 2, customers have shown genuine satisfaction with Calyx and Corolla's products and services.II. Weak PointsA. Business is very critically dependent on Fed Ex. If Fed Ex had a major disruption to their delivery system, flowers would not be delivered on time, resulting in dissatisfied customers. For example, if Fed Ex employees went on strike, there would be no equivalent alternative for Fed Ex to deliver flowers to customers. UPS, while an alternative, did not deliver perishable products as promptly as Fed Ex.B. Business also depended on information technology. If the systems were down for some reason due to viruses or a major power outage, the company would not be able to fulfill orders. The company should consider external power.C. Suppliers were primarily concentrated in Florida, California and Hawaii. Calyx and Corolla suppliers/growers are not very geographically diverse. If another deep freeze occurs, the company may struggle to meet customer demands. The company should consider other sources of growers/suppliers, such as growers in Mexico.