How? Advantages to Firm Advantages to Customer
Value Creation C&C launched a unique flower delivery system by buying flowers directly
from growers, convincing them to retail, and shipping directly to customers via Fedex.
C&C’s top management nurtured one to one relationships with 30 geographically
dispersed growers with onsite account support for administrative tasks (e.g. stringent
packaging, top-notch handwriting)
Top management team comprised of veterans in flower industry (Owades), customer
service (Wilson), and catalog marketing (Hayes). Cost Focus: By incorporating value
chain directly into its business process, C&C had a competitive cost advantage with COGS
at 25% compared to FTD’s COGS at 60%.
Minimize market fluctuations: Two-way information flow on demand and excess capacity
between growers and C&C increased sales and offset seasonality for both.
Barriers to entry & imitation: C&C’s exclusive contracts with growers prohibited growers
from supplying to any other mail order retailer. Customer Focus: C&C delivered flowers
fresher by 1-2 weeks (than conventional florists) to customers at a very competitive price.
Customer Experience: C&C provided high aesthetics and stringent quality packaging
besides customer awareness to amplify shelf life or dcor. Positive press in leading
magazines maintained and attracted customers.
Value Preserv-ation C&C established a critical relationship with Fedex, a natural process
“fit”, because customer perceived time reliability synonymous with Fedex.
C&C established cost control and freight cost forecasting by negotiating with Fedex a
price that varied a little with weight. Decrease Customer Churn: Delivery drivers became
