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Scenic Bouquet Company

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Scenic Bouquet Company

1. What problem or issue is the central focus of this case?
The purpose of this case study was to examine how Scenic Floral Inc. has survived in a highly
competitive floral industry. As a result of the company's rapid growth, it has drawn the interest
of other market participants. Case study analysis may be affected in some way due to the fact
that this company has engaged in a wide variety of issue and profit driven activities. Canada-
based Scenic Floral Inc. is at the center of this case. The company is an importer and distributor
of cut flowers in Canada and also processes roses for a Colombian corporation. Cut flowers of
the highest quality are distributed by this business, which specializes in meeting the needs of its
clients. Due to intense competition from growers selling directly to consumers, cut flower
distributors have chosen to focus on this niche market. Scenic had to fight for its survival as a
result of the Covid-19 pandemic, which had a significant impact on the floral sector.
In June 2019, Scenic had a pivotal business encounter with Petals West Inc., which set the stage
for the company's rise to wealth. Scenic was able to inject resources, equipment, and expertise
thanks to the corporation. Scenic's ambition of expanding to Ontario was furthered as a result. In
this regard, scenic has the choice of assessing its strengths and weaknesses as well as the
opportunities in Canada's floral sector in order to obtain a competitive advantage in the flower
industry.

How do the five forces apply to this case?

Flower companies are vying for the top spot in the sector and become the next corporate
powerhouse (Porter, 2008). To become an industry powerhouse, Scenic Bouquet must compete
with other companies to gain a foothold in the industry's consumer market. To compete in the
flower sector, many firms are all vying to be the best, which means that companies like
Company D have to be even more aggressive with their sales numbers to maintain profitability.
Additionally, most people are looking for a high-quality product at the lowest possible price in
today's consumer market. When the modern consumer is looking for a high-quality product at a
low cost, and when the various companies in the market are vying for the new revenue, the
prices continue to decline, which further diminishes the company's profit margin. The Scenic
Bouquet company is a fantastic example since they strive to find the best flowers at the lowest
price. A firm must keep an eye on the competition in its industry to keep up with market trends
and achieve solid financial growth. It is essential to keep an eye on the competition in the floral
market.
Expansion Opportunities for Newcomers in the Industry
New competitors are also a part of Porter's five forces model, although they have little
impact on Scenic Bouquet. Due to the capital-intensive nature of the sector and the fact that most
of the companies already in the market are already conducting business on a worldwide level,
Scenic Bouquet has little to no competition. Scenic Bouquet doesn't have to worry about
constantly changing competitors or focusing on smaller companies while examining its Porter
Five Forces strategy. This means Scenic Bouquet will mainly be competing against its 10 to 15
closest rivals at any given time, with occasional forays into the territory of an entry-level
opponent. Newcomers are a minor threat to Scenic Bouquet's business model, and they don't
deserve the same attention as other factors.
Suppliers wield tremendous influence
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As part of Porter's Five Forces concept, suppliers' overall power significantly impacts
variable and fixed costs. For a variety of reasons, flower vendors don't have much sway in the
market. Because of the oversupply of raw materials in the business, customers like Scenic
Bouquet have more negotiating leverage with their suppliers, resulting in lower costs for their
consumers. Supply, or the amount of inventory each supplier has, is another issue that has
impacted suppliers' influence. Because of the surplus of supplies from the suppliers, Scenic
Bouquet firm is in a weaker position because they are more desperate to sell their supplies to
their vendors. All of these aspects work together to produce a favorable and cost-effective
environment for Scenic Bouquet Company. A significant level of supplier monitoring will not be
necessary unless many suppliers decide to stop working in specific sectors.
Customers' Influence
The power of the customer, or consumer, force is one of the most significant forces in
Porter's Five Forces Model, which focuses on how much the customer may choose to influence
how the company functions and how much income the company can gain. One of the most
critical aspects of this force is the capacity of customers to switch products and consumer brands
if they are dissatisfied (Kustipia & Wulung, 2019). A long-time customer of Scenic Bouquet's
products may, for example, try and purchase one of the new products that are released online,
only to discover that the product they received did not meet their expectations. They may then
consider switching to other companies' products to see if they can meet their quality needs. If a
consumer has been using these items for a while, this may not be a typical occurrence, but the
product might still impact their future purchases or overall revenue streams. Customer power is
moderate to strong because customers can and often do influence some parts of the industry.
Product Substitutes Threaten
Suppose a consumer can easily move to another company's product for whatever reason.
In that case, this is the final force of the five points of Porter's Five Forces: the threat of
alternative products in the particular industry. To keep customers from transferring to another
company's products, the threat of substitute items is genuinely a moderate issue in the flower
industry (Burns, 2011). This issue must be thoroughly examined to ensure that customers are
happy and content. For consumers, switching from one floral product to another is a cost-
effective and straightforward process because of the business's great competitiveness and overall
accessibility of floral items. As a result of the fierce competition in the flower market, consumers
can expect to pay nearly equal costs for almost identical items, making it simple to switch brands
when they're not happy. As a result, customers have been able to pressure manufacturers to
reduce prices or improve quality to meet consumer demand (Sikorski & Karnicki, 2020). In the
case of Scenic Bouquet, the customer must ensure that their customers are satisfied with the
products and pricing to ensure that the client does not switch consumer items. Overall, I would
classify this as a moderate force because the client can transfer providers, but only if the
organization cannot keep its customers satisfied.
What are the broader environmental factors affecting the industry?
Climate is the most significant environmental factor influencing the sector. To maintain a steady
supply of flowers from flower farms, the climatic conditions in Canada must be favorable to
floral plants, which are grown there. Furthermore, because flowers are so perishable, they must
be kept at a low temperature in order to preserve them. In Canada, the climate is tropical, with
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long, frigid winters and short, cool summers. In order to preserve flowers in these conditions,
special storage facilities must be constructed.
General economic conditions have a direct effect on customers' ability to purchase products.
During times of Covid-19 pandemic, famine, drought, or political upheaval, people will not be
purchasing flowers but will instead be purchasing necessities such as food.
Influenced by political, legal, and regulatory factors, customers are unable to purchase goods.
High levels of corporate activity are linked to political stability and vice versa. The legal and
regulatory influences are those tactics that are put in place to ensure that the business's operations
are being properly monitored. Changes in population demographics owing to migration and the
resulting shift in cultural values mean that consumers are more likely to choose certain things
over others because of the influence of sociocultural factors. Scenic’s flowers may be unable to
be sold in other regions as a result of this. Ecological concerns take into account the probable
environmental impacts of a company's products throughout their manufacture and when they are
used by customers.
What is the focal company’s current strategy?

The Scenic Bouquet Company's current objective is to build a broad portfolio of flower
processing and distribution and extend to other more desirable regions, as well as to improve the
proprietary expertise of floral products. In other words, the company's present strategy is to
continue growing its tactics and technologies in the manufacture and distribution of floral
products in order to obtain a competitive advantage in the floral industry. The Scenic Company
has been able to outshine its rivals by focusing on a small buyer segment and their capacity to
out-compete the rivals by providing the customers with excellent floral products that match their
taste and demands better than those flowers that are directly supplied to consumers by growers.
Scenic's high-quality blooms have bolstered the company's profit margins in the market. As a
result, Scenic has been able to keep up with its consumers' rapidly shifting tastes and
preferences. A multi-brand approach has also been employed by the corporation, in which the
same product is marketed under different brand names in order to increase its marketability to
customers. The corporation has also invested a significant amount of time and money in the
management of agricultural produce in order to reduce the risk of spoilage.
How well do the focal firm’s resources or capabilities (e.g., competences) distinguish it
from its competitors as well as contribute to value creation?
As a result of Scenic's ability to expand its product range from one Colombian farm to four, it
has a distinct advantage over other enterprises in the field that lack this capability. A rise in net
income from $7130 in 2018 to $ 118451 in 2019 has boosted the company's value-creation.
Roses from a Colombian farm were being processed by Scenic every week. Taking in the stuff,
chopping it, and putting it in pails of water before packaging and shipping it to Metro's
warehouse earned the company between $9 and $10 each case. Scenic saved money on trucking
costs by using the same freight business to transport its own products. When Metro launched
promotions, the volume rose to 500 to 1,000 cases each week.
More diverse and larger quantities of flowers had to be imported to expand the product offering.
Aside from roses, chrysanthemums, and carnations, there were a plethora of less popular cut
flowers that Scenic could obtain in Colombia if it developed its supply network there. Scenic
might also use Niagara Peninsula flower producers to get kalanchoes and other similar blooms
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for their displays. Together, the Van Weeldens had decades of experience in the region, which
resulted in a great reputation among local growers.
What is the focal company’s competitive advantage?
The Scenic Bouquet Company specializes in producing floral products that satisfy the needs of a
wide range of consumers. In this regard, Scenic's flower products were favoured by consumers
over those from growers and other competitors. Scenic's distinctive value proposition was that
obtaining flowers from Colombia allowed the company to create original bouquets and mini-
arrangements for Canadian grocery shops and other retailers. Scenic depended significantly on
Van Weelden's fluency in Spanish and intimate connections to the Colombian farm. Many of
Van Weelden's customers came to him because of the special arrangements he designed for
holidays, such as St. Patrick's Day and Canada Day, and weekly flyer feature items (such as
turkeys, cranberries, and pumpkins). Instead of relying just on catalogs, Van Weelden designed
live samples so that store purchasers could see what their clients would truly be getting for their
cash.
What should the focal company do and what are the main reasons for your
recommendations?
The Scenic Bouquet Company should focus more on creating unique flower bouquets that can be
used to meet a variety of different customer needs at the same time. Customers would be able to
understand the worth of the money they spent on the offered products using this method. This
has been expanded to instances like offering to make specific types of products that are aimed to
fulfill the wants of a particular group of buyers in the market. Just for an instant, the company
has shifted its focus to producing specific floral products that are targeted for high-end clients.
Scenic needs to do the following in order to grow its consumer base:
1. Increase advertising in Canada, expand the distribution network, and lower costs on each
product. They should also make use of their partnership with Petals West Inc. in order to
enhance sales in Ontario.
2. Furthermore, Scenic can secure the supply of cut and potted flowers in Colombia by
assisting Colombian farms produce the flowers and signing long-term supply contracts.
Firms can develop while their competitors are held back, thanks to this strategy.
3. Furthermore, Scenic can expand its market and begin selling in other countries, such as
the United Kingdom and the United States, which will boost its growth.
4. Another possibility is for the company to expand its product line and begin developing
new flower brands. This will aid in the development of the company's image.
What are the financial performance implications for your recommendations?
It will be costly for the company to implement any of these suggestions because of the additional
resources required. As an example, the company will have to spend more money on advertising
in Canada, developing its distribution network, assisting Colombian farmers in growing flowers,
and entering new markets and expanding its product line. In the end, the company will be able to
keep or even increase its market share by fending off competition through these measures.
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References
Burns, P. (2011). Planning for growth. Entrepreneurship and Small Business, 289-
323. https://doi.org/10.1007/978-0-230-20848-3_11
Kustipia, R., & Wulung, S. R. (2019). undefined. Proceedings of the 1st NHI Tourism
Forum. https://doi.org/10.5220/0010213901550158
Porter, M. E. (2008). Competitive advantage: Creating and sustaining superior performance.
Simon & Schuster.
Sikorski, Z. E., & Karnicki, Z. (2020). Resources and their availability. Seafood: Resources,
Nutritional Composition, and Preservation, 9-
27. https://doi.org/10.1201/9781003068419-4