The current unemployment rate in the world calls for creativity and entrepreneurial ideas that will ensure increment in business establishment and employment opportunities thus reduce the unemployment rates. According to Andersén et al., (2015), an entrepreneurial oriented approach is needed to enhance the economic growth and development in most countries. Governments in most developed nations are increasing entrepreneurial approaches through the provision of loans for capital and other motivating factors. Therefore, Andersén and his colleagues call for developing a business model and plan that analyzes the potential industry to ensure that businesses can flourish both in the short and long-run. In the bid to start Eloquence-Delight Floral Company, this essay examines the market, industry, and consumers to determine whether the opportunities overwhelm the risks involved to undertake the venture or not.
The Floral Industry Overview
The floral industry comprises of over 33,500 stores with the most significant sales for the past decade being dominated by supermarkets (Ibisworld.com , 2017). Supermarkets gained the most substantial profits with the multiple stores in their chains providing them with consumer contact as a means of competitive advantages. The retailer stores have also been instrumental due to their home deliveries, but the demand has been declining among the largest group of buyers (Zhao et al., 2016). The industry does not have a dominant leader but the supermarkets due to their chains of stores, the sale of other products and masses of people makes the supermarkets the dominant sellers of the flowers.
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Most of the flowers sold in these stores are in bouquets with over 69% of the income from the sales being cutting roses mainly from Ecuador, Netherlands and African countries such as Kenya. Ecuador’s roses have dominated the U.S. market, but consumers are no longer interested with the big stems thus making Ecuador’s flowers more preferable in European nations ( Conefrey, 2016). The industry has been driven by the sociocultural beliefs and affiliation of flowers with love, beauty, appearance, and condolence thus most of the sales are made during valentine with other consumers being wedding and funerals. Religious places such as churches have also played boosted the rates of sales over the years.
Market Risks, Opportunities, and Trends
Several surveys and reports demonstrate that the baby boomers have been the primary purchasers of flowers either cutting or potted flowers but their demand is declining. The decline in baby boomers consumption is not identical to the low growth of millennial customers hence creating a reduction in the overall market. According to Zhao et al., (2016), other factors such as seasonality of the flowers, the high prices during peak seasons, the increment of substitute gifts such as jewelry have also increased the rates of the demand decline. These claims are supported by Russel Research (2016) that demonstrated baby boomers who had a 53% purchasing rates have declined to 49% for the past five years. The decline is critical as most companies in the industry have molded their business plans to target these group of consumers. It is evident that millennial generation has embraced the market, but their purchasing power is low due to economic status and their inadequate information regarding flowers.
The culture of flowers is at risk of losing all its aspects, but recent studies have depicted that informing the youths and using strategies such as social media will propel their purchasing behavior by over 15% in the next decade (Yue, Zhao, & Rihn, 2016). The population growth and with most of the world’s population including the youths, it depicts that venturing into the floral business while targeting the youths would be a wise decision and worth the risks involved. The studies represent that designing and accessibility of the flowers and their vases also increase the purchases of the flowers both in the short and long-run.
The floral industry and market are changing with the anticipated decline for its main consumers which is a significant risk. The availability of substitutes for gifts makes it clear that the floral business is risky and needs guts and creativity to enter in this market. The long chain stores of supermarkets make it challenging to identify the best possible location and sites to begin a floral store. The brand names also make it difficult for new companies to start to gain influence in the market.
The risks may be many, but the current industry still employs traditional means of marketing thus making it challenging for these stores to target the millennial. The lapses in marketing and information provision make it clear that developing a social media account that contains flowers of different colors, information on prices, accessibilities, home deliveries, e-commerce and payment strategies will enhance the business growth ( Yue, Zhao, & Rihn, 2016). It is also clear that the current sellers lack creativity and consumer engagement hence the inability to increase purchases from the youths.
Franchise Opportunity
The company intends to offer discounts and gifts for purchases within the first three months to ensure that consumers purchase from us. The company will also use the discounting strategy and quality of its services by employing competent floral designers to provide that it can gain loyal customers. The use of social media and official website that contains the entire collection and availability of customization will also influence the consumers (Yue, Zhao, & Rihn, 2016). The company understands that the consumers' demand must be complemented with the availability of quality products and services. Therefore, the company intends to ensure supply from Kenya, and the Netherlands which will constitute of 60% while taking advantage of the government incentives to support domestic flower farmers to comprise of the 40%. The company will use its research, employee skills and experience to understand all the needed policies and laws that must be fulfilled to operate the business. Lastly, it intends to locate the store in Orlando due to the potential consumers and fewer sellers.
References
Andersén, J., Ljungkvist, T., Svensson, L. (2015). Entrepreneurially oriented in what? A business model approach to entrepreneurship. Journal of Small Business and Enterprise Development, 22(3): 433-449 http://dx.doi.org/10.1108/JSBED-11-2013-0170
Conefrey, M. (2016). Roses with altitude: why Ecuador’s flower industry stands out. Financial Times . Retrieved April 11, 2018, from https://www.ft.com/content/eb5114d6-d846-11e4-ba53-00144feab7de
Ibisworld.com. (2017, December). Florists - US Market Research Report. Ibisworld.com . Retrieved April 11, 2018, from https://www.ibisworld.com/industry-trends/market-research-reports/retail-trade/miscellaneous-store-retailers/florists.html
Russel Research. (2016). Generations of Flowers Study. Society of American Florists and American Floral Endowment . Retrieved April 11, 2018, from https://safnow.org/wp-content/uploads/2015/06/2016-Generation-of-Flowers-Study-Executive-Summary-Word-Doc-PDF.pdf
Yue, C., Zhao, S., & Rihn, A., (2016). Marketing Tactics to Increase Millennial Floral Purchases . American Floral Endowment & Floral Marketing Research Fund . Retrieved April 11, 2018, from http://endowment.org/wp-content/uploads/2017/01/FMRF_MarketingMillennialsReport.pdf
Zhao, S., Yue, Y., Meyer, M., and Hall, C. R., (2016). Factors Affecting U.S. Consumer Expenditures of Fresh Flowers and Potted Plants. HortTechnology , 26(4): 484-492. Retrieved April 11, 2018, from http://horttech.ashspublications.org/content/26/4/484.full?cited-by=yes&legid=horttech;26/4/484#cited-by
