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FLOWER INDUSTRY

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by

siu cheuk lau

on 23 September 2015

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Transcript of FLOWER INDUSTRY

Original Business Process

Cluster Analysis
• Reveals
the relationship between flowers and other items
along with the nature and frequency of the relationships.

• Determine likelihood of
flowers and other items
occurring together
at a particular time
Association Detection
Software :
vertical-market application
Our Role:
act as intermediary

Target :
all florist in the industry of Hong Kong + foreign flower growers


Original user (compulsory)
pay annually login
+ double password (personally created)


Solution: software created

For small-scale florists :






Problem Identification:

At a particular time, the flowers and specific items exist together at high chance

- Survey of retail flower in China
- Amazon.com
- Daily observation + survey conducted
by us

FLOWER INDUSTRY
CB2500 Information Management

(2014/2015 Semester B)
Industry structure

Competitive forces
– monopolistic competition
1.New competitors
Easy and free entry, few capital requirement, low-skilled workers

2.Existing rivals
Large scale florists have purchasing economies of scale, buying special foreign species at a lower prices

Bargaining power
1.High bargaining power of suppliers
Local vendor: monopoly
Foreign vendors: few vendors selling special species

2.High bargaining power of customers
Over thousands of florists in Hong Kong

Competitive strategy


。Industry-wide cost leadership strategy



common and local flowers
e.g. chrysanthemums, carnations
Low profit margin
(low selling price, low cost)


For small scale florists
Mainly selling different varieties of
Vendors: local vendors
The Value Chain of Flower Industry
limited varieties of flowers

-lose their customers
-weaken their competitiveness

low bargaining power

Fa Hui Park is the only flower wholesale market in HK
-small amount of purchases on rare species of flowers一 are not accepted by the vendors
-no channels to import flowers or contact flower growers by them own
-bear a high cost even though they come an agreement with local vendors for small amount of order
Flowers with price range between $50-300 per stem account for 33% of the most preferred species
Cluster Analysis


L
ow price flowers preferred by the majority of customer
s


F
lowers with higher price are tend to preferred by middle ag
e


Y
oung people tend to spend les
s


M
arket segment for expensive species e.g. Cilivia, Cyclamen is significan
t


M
arginal revenue of high price flower is highe
r
~ The particular time: Wedding ceremonies

~ Most popular flowers for wedding ceremonies: Lily, Rosa hybrida, Calla lily, Gerbera, Phalaenopsis amabilis and Anthurium andraeanum lind.
~ The particular time:
Birthday
~ Flowers and birthday cakes
~ The particular time:
Festivals
~Valentine’s Day/Christmas: Rose and Chocolate
~ The particular time:
Festivals
~ Mother’s Day: Carnation and health products
~ The particular time:
Seeing a patient
~ Carnation and fruit basket
~ The particular time:
Festivals
~ Tomb Sweeping Day: Chrysanthemum and Chinese roasted pork
- know the potential customers at what particular time to buy flowers

-recommend other items they may be interested in and provide discount

-generate more revenue
Conclusion of BI
From Cluster Analysis
potential opportunity: expensive species

From Association Detection
A way for generate more revenues




Content
Original user:
- collect the order from different florists
- deadline is set
- send to server of foreign flower grower


Funding to support
- government subsidy (convinced by using BI)
- revenue from original user
- sponsorship eg. chocolate, tea

New Business Process
Expected Outcome of Software
Foreign Flower grower
Save cost by diluting Bullwhip effect
Firm with small scale
expensive species
Local vendor
lower their cost because of competition
Customer
- easy to get what they want
- better product/ services will be provided

cluster analysis
Florist industry is potential to Hong Kong’s economy
Chan Sing 54038093
Hui Ho Yan 54032248
Lau Siu Cheuk 54039932

Lee Tsz Ying 54041706
Wang Cui Feng 54038161
Yen King Hang 53859580


Reference list:
HY Consultancy(2010). Survey on Flower Retail in China
Retrieved from http://nabsokunming.nlmission.org/binaries/content/
assets/postenweb/c/china/kunming/import/reports/survey-flower-retail-
in-china
Interview with staff from florists
Searching on Amazon
Searching on Taobao.com

Full transcript