Competition_in_the_Dutch_Flower_Markets

Introduction

There are several reasons why most business entities fail in the market apart from market competition. Most of the failures arise when business entities do not employ effective marketing strategies as well as employ up to date marketing strategies which in the short and long term can greatly affect how they perform in the global market. Kodak is one of the global company that has been seen as failing in the market because of poor marketing strategies. In the case study it is reported that the Dutch flowers auctions has failed in the market not only because of the stiff market competition from tele flowers auction but also because of poor marketing strategies.

There are many reasons why different business firms fail in the market which in the long run affect how they perform in the global market. Dutch flowers auction is one such an example that failed just because of poor strategies in the market. Before the introduction of other players in the market it was estimated that two of the Dutch flower auction collected a lot of revenue and reached many consumers in the market. With the introduction of other players in the market like the Tele Flowers Association, they experienced a drastic fall in their revenue as well as lower earnings as compared to tele flowers association which recorded 100 growers and 160 buyers. This showed that it was either the Dutch flowers auction were not using the right or effective strategies to counter their rivals in the market or the consumers and the growers were not attracted to their end products and services.

The first major reason why the Dutch flowers auction failed in the market was their lack to use current market strategies like information technologies and innovate new ideas in the market. This was also a major problem regarding Kodak which had myriad of patent digital photography. The company did not embrace much of the technology which eventually led to its demise from the market. For the case of the Dutch flowers auction mostly used natural gas which was considered expensive by their rivals who on the other hand used low cost energy. Consequently they faced stiff competition from their rivals who were mostly coming from Spain, Kenya, Colombia, Israel and India. When the Dutch flowers auction still grappled with high cost of land, increased environmental regulations and trends in politics to subsidies the prices of natural gas their competitors had low costs of labor, low or few environmental regulations and lower trade tariffs that could hinder them to market their products and services in the market. In the world it is believed that harvesting and the eventual utilization of natural gas is quite expensive as compared to other green sources of energy. For Dutch flowers auction to be fully competitive like their tele flowers auction they have to use other sources of energy which are comparatively cheap in the in the market and at the same time offer higher productivity.

The adoption of outdated technology in the operation led to the decline of most of the Dutch flower auction. The use of outdated pricing methods which took time to respond to the needs of the consumers and at the same time favoring the growers over the buyers led to many consumers opting to purchase their rivals products and services. The pricing method also limited the buyer from making some important decision regarding the products and services. The pricing also increased buyer competition which was considered by many buyers as not convenient to them. There were improper and imperfect information that went against the buyers and in favor of the growers. The pricing also required physical presence of the growers and the buyers so that they could purchase their desired products and get their services. On the other hand their competitor used digital platforms to set the prices of their products and services. These platforms did not favor any set of groups and was considered as effective and efficient. It did not require physical appearance to buy and purchase the products but rather the buyer could purchase the products anywhere around the country as long as they could access the information technology gadget. The Dutch flowers auction also saw their fortunes dwindling in the market because of the sophistication of the consumers who favored products that were modified, manufactured with the latest forms of technology, bought the products in bulk and purchased products in different parts of the globe. These services could only be offered by the rival companies.

Another reason that majorly led to the failure of the Dutch flowers auction in the market was their inability to meet the expectations of their clients. Buyers and the growers more often expected the transactions numbers to burgeon by separating the prices of the products from the location. Instead transaction numbers decreased per since buyers and growers had to physically specify the terms of delivery. This greatly reduced their overall yield and productivity in the market. For instance in a case where the auction had predicted to transact 45% of the potted plant supply they only managed to a supply of 10%. Their marketing strategy in like product promotion was not also not very effective. It is believed that the poor marketing strategy of their products led to the buyers purchasing their sample products which they believed and perceived  were of high quality as compared to the rest of the products even though all the product were of the same quality and type.

Lastly the government of Netherlands did not offer incentives and other financial benefits to the Dutch flowers auction which eventually impacted on the business clout or power in the market. It is reported that the incentives to the growers and the buyers did not materialize. Growers did not receive any form of compensation for the modification, packing and delivery of products that could have fitted with the taste requirements of the buyers. On the other hand, there were no economic and financial benefits that could motivate the buyers to purchase the products in large quantities. Instead the pricing methods always favored buyer’s purchases on a low quantities.   For any company to be successful, they must offer economic benefits to the customers like incentives (Chalioti & Serfes, 2017).

Most of these market failures by the Dutch flowers auction can be remedied through the use of effective market strategies. The first major strategy is the use of effective information technology and innovation techniques to allow for modification of products and at the same time appeal to the clients (Hooley et al, 2017). The use of online marketing strategy that is capable of reaching millions of consumers in the market is one of the ways that the Dutch flowers auction can employ. Improved digital pricing that does not favor anyone and does not require physical appearance of both the grower and the buyer can reduce the time and money taken in the bidding section (Zeriti et al, 2014),. The use of digital platform will increase the net productivity and yield of a business firm. This was seen by how consumers readily accepted the tele flowers auction and were impressed with the computer information and data, quality of the products and the delivery time of the products. It is also reported that most buyers were very much comfortable with the innovations in the information technology especially as they improved the quality of flowers. They could get all the information from the computer and purchase using the computer. 

Conclusion

For market competition to be successful the rival company must employ current technological advancement in the production, strive to employ innovation and understand the market fully. Online marketing strategies that are aimed at reaching many consumers should be employed like enterprise resource enterprise techniques.

Reference

Chalioti, E., & Serfes, K. (2017). Strategic incentives for innovations and market competition. International Journal Of Industrial Organization, 52427-449. doi:10.1016/j.ijindorg.2017.03.004

Zeriti, A., Robson, M. J., Spyropoulou, S., & Leonidou, C. N. (2014). Sustainable Export Marketing Strategy Fit and Performance. Journal Of International Marketing, 22(4), 44-66.

Hooley, G. J., Piercy, N., Nicoulaud, B., & Rudd, J. M. (2017). Marketing Strategy and Competitive Positioning. Harlow, England: Pearson.

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