Calyx and Corolla Case ReportIntroductionCalyx & Corolla was a new entrant into the $8 billion floral industry in the United States in 1991. Through the use of air freight night shift (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. Through their efficient distribution system, Calyx and Corolla changed the way flowers were distributed to consumers.Strengths and WeaknessesI. StrengthsA. Good niche and good mission. Calyx and Corolla met a consumer need. Consumers wanted very fresh, long-lasting flowers and the company delivered. Efficient distribution was key in the floral industry and the company was able to shorten delivery to customers by bypassing intermediate 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 ordering, compared to 1-2 weeks for other FTD.B retailers and florists. Sales are growing at a faster rate than the cost of goods sold. The guidance for FY4 and FY5 also called for sales to grow faster than cost of goods sold. See chart for details (derived from Exhibit 1). Growth rate from 1988/89 to 1989/90 Growth rate from 1989/90 to 1990/91 Growth rate from FY 3 to FY 4 Growth rate from FY 4 to FY 5 Sales 4 .31 1.55 .49 .61 Cost of goods sold 4.14 1.52 .42 .58C. Good, creative catalogs containing attractive photographs, as well as educational information.D. High customer satisfaction. From Table 2, customers showed real satisfaction with the products and services of Calyx and Corolla.II. WeaknessesA. Business is very critically dependent on Fed Ex. If Fed Ex experienced a major disruption in its delivery system, flowers would not be delivered on time, leading to customer dissatisfaction. For example, if Fed Ex employees went on strike, there would be no equivalent alternative to Fed Ex for delivering flowers to customers. UPS, although an alternative, did not deliver perishable products in the same time frame as Fed Ex.B. Businesses also depended on information technology. If the systems failed for any reason due to viruses or a major power outage, the company would not be able to fulfill orders. The company should consider an external power supply.C. Suppliers are primarily concentrated in Florida, California and Hawaii. Calyx and Corolla suppliers/producers are not geographically diversified. If another freeze occurs, the company could have difficulty meeting customer demands. The company should consider other sources of producers/suppliers, such as producers in Mexico..