Decofruta

Decofruta

 

 

Don't use plagiarized sources. Get Your Custom Essay on
Decofruta
Just from $13/Page
Order Essay

 

Problem statement:

Since the launch of Decofruta in 2005, the company changed many aspects of its business strategies. Whereas the company started as a seller of fruiquets to the corporate segment, it ended up with four different store concepts in 2014 selling to mostly individuals. Moreover, Decofruta has a long history within franchising. After three to four months of opening the first Decofruta “factory”, the store already had its first franchisee in Margarita, Venezuela. Soon after this appeared to be a success, many others followed. One of the people applying for a partnership was a friend of Roberto, who was living in Barcelona, Spain. With this application, the internationalisation of Decofruta started. Without any hesitation, the company agreed to the cooperation. After Barcelona, stores in Madrid and Valencia opened. Following Spain, came a request from a Greek entrepreneur. Due to the differences in language, culture and other national aspects, it seemed like a risky challenge to open a franchise in this country. However, after an online analysis of the market, Decofruta concluded the market to be viable and decided to move forward with the application. Additionally, between 2009 and 2012, franchises opened in Bologna (Italy), Lisbon (Portugal, and Tenerife (Spain) (Decofruta – New Flavors in the Business Model, 2016).

Even though it seemed the product was in demand on a global scale, it became clear to the partners that some issues had started to arise. After a few months in Spain, the revenues remained stable, and the founders started to understand that the Spaniards thought of the product as being a waste of food. The Spanish culture is more austere and, therefore, found the bouquets unpractical and expensive (Decofruta – New Flavors in the Business Model, 2016).

Furthermore, issues regarding the logistical efficiency, technological systems, and managing the different time zones arose. Besides, the company lacked information about the best local suppliers, making the products unnecessary more expensive. Decofruta had been too ambitious by opening this much franchises in such a short amount of time, which had led to the situation in which the company was not consolidated anywhere. Thus, when the economic crisis hit Europe, the lack of control caused the closing of one store after the other. By 2014, all European Decofruta stores had been closed by the company  (Decofruta – New Flavors in the Business Model, 2016).

Due to the overly ambitiousness of the founders, they forgot to take in mind the different cultures and needs per country. Although they performed extensive research on both the potential franchisees and the economic prospects of the country of entering, they forgot to examine the actual values, norms and ethics of the local customers. In order to successfully sell products to different cultures, communication of these values is extremely important. The basic values of the product need to be complemented by the local values of the people within that country  (Browaeys & Price, 2019).

Thus, due to the lack of information and control over the European stores, Decofruta failed to internationalise the company the first time. Despite this, it still has the vision of trying it again. Thus, to make sure that this time the company will succeed, it is necessary to do research and analyse data regarding this topic to ensure good communication within a cross-cultural environment.

 

 

 

 

 

Summary Case

Decofruta: Fruit bouquets

 

Decofruta was founded in 2005, and it was a new and ground-breaking concept in Venezuela. Decofruta designed fresh fruit bouquets arranged in basket, which was inspired by the flower industry.

The company was founded by Carlos Durán, Raúl del Hierro and Roberto Gentile. They were childhood friend and perfect partners, because Carlos was an expert in finance, Roberto was specialized in marketing and Raúl had a lot of management experience from his family company. The idea for this product arose when Raúl was on a trip to Canada and he saw a shop that sold ‘fruiquets’. He thought the idea was very interesting and pitched the idea to his friends. Together they decided to develop a similar concept in Venezuela.

When working out the concept, the financial estimates were optimistic. However, when the bouquets were designed, they looked horrendous. This unexpected challenge was not included in their estimates. Therefore, after a thorough search, they decided to hire a flower designer who was able to materialize what they had on paper. Together with this florist, they managed to write down the step-by-step procedures and develop the recipe for the bouquet.

 

Business plan:

 

Plan 1: Originally, Decofruta was visualized as a massive production center, selling fruiquets to businesses through the internet and catalog sales. The target group was the corporate segment that needed arrangements to compliment employees or customers. However, after a week in the market, the entrepreneurs started feeling uncomfortable. Even though a lot of companies had showed interest, only very few had actually placed orders.

Plan 2: Even though there weren’t many orders, a lot of individuals contacted Decofruta with the question if they could see the fruit bouquets. This made the entrepreneurs realize that they needed a place to show the bouquets, like a proper shop. They started to realize that they might needed to target a new segment: well-funded men of a high-purchasing power (middle-high class). The men would buy the fruiquets for their partners.

The product turned out to be a huge success, and the entrepreneurs were invited to several TV shows to talk about the products. At that moment, they learned that women – and not men- were the ones connecting more rapidly with the concept. These women belonged to middles and lower socio-economic classes.

Plan 3: Due to the increasing sales, Carlos decided to give up his career at the bank and use all his time to make Decofruta a huge success. Therefore, at the beginning of 2006, they decided to establish a street-shop. This shop showed a very promising response, with sales amounted to around 200 fruit bouquets per month. 90% of the customers were attracted to the store by the location and visibility, and the other 10% through internet. Due to the success, the three entrepreneurs started thinking more ambitiously.

 

 

Developing a Franchise:

 

There were 3 factors that influenced the immediate decision to boost development, long before expected. Namely, (1) fear of being imitated, (2) customers’ early acceptance and (3) the appearance of potential partners.

In order to expand, a lot of money was needed but the entrepreneurs didn’t have enough capital themselves. Therefore, they decided to develop a franchising model, where potential partners would invest in opening a new shop and could operate under the concept and name of Decofruta. During 2007, they managed to sell three franchises in Venezuela (Puerto Ordaz, Margarita and Caracas). In 2008, they managed to sell another 9 franchises.

Decofruta offered the prospective franchisees (1) use of the brand, (2) know-how transfer, (3) some pre-defined products and (4) exclusiveness in a pre-established point in time and place of service. By providing this, Decofruta was confident that each shop would sell around 250 bouquets per month with an average price op 50$. Before accepting a franchisee, a screening process would take place to forecast the chances of success.

 

Internationalization:

 

A friend of Roberto who was living in Barcelona, Spain, applied to become a franchise owner. This seemed to be a good opportunity to gain hard currency (euros) revenues. They decided to open the shop in Barcelona, and a few months later they opened another in Madrid and one in Valencia. Soon after that, the also got an application in Greece. After thorough research, it was decided to open a shop there as well and it initially turned out to be a great success.

 

Learning process:

 

In Venezuela, the product caught the public eye and was soon talked about in mass media. However, in Spain, the sales stagnated after a few months. This was due to the different perception of the fruit bouquets by the Spanish consumers. They felt such a huge fruit bouquet is a waste because no person can eat it all by themselves. Therefore, Decofruta came up with the “Nano fruiquet”. It was a smaller and more economical bouquet, made for one person. This alternative bouquet was well accepted in Spain which gave the entrepreneurs quite a relief. This experience changed their philosophy. They realized that they should sell not one single product, but something that meets a particular need and materializes in the fruiquets.

 

As they became more knowledgeable about the European market, they started receiving application from other European countries as well. Decofruta opened shops in Italy and Portugal and another one in Spain. However, due to the geographic dispersion among the shops the logistics became really inefficient. In addition, they lacked information as to who the best suppliers were to equip the franchises with more competitive inputs. Due to their overly ambitious attitude of having presence in several countries without consolidating the product first, one blow led to another.

 

New concepts:

 

In 2010, the entrepreneurs developed different shop formats to franchise. The had thought of a Deli concept, which consisted of mini shops selling juice, smoothies, ice-cream and fruit yoghurt. The idea was to make use of the drop in production, or waste of fruit that they had in the shops and turn them into a new concept of healthy drinks. After running tests with promising results, the partners decided to incorporate the new model in their franchising offer.

 

  1. TraditionalDecofruta à Fruit bouquets, was to position Decofruta as a market leader in the deco segment
  2. DeliDecofruta à Did not assemble fruit bouquets. Was created for spots in shopping malls and high traffic sites. Produced impulse goods like gelatos, smoothies, shakes, fruit salads etc. Could be used as order placement center for fruit bouquet orders.
  3. DecofrutaMix à Would offer fruit bouquets and impulse goods to be consumed on the spot. Format had delivery and dining area.
  4. DecofrutaExpress à Sells fruit bouquets arranged per size under an express format, in addition to trays for decorating banquets and celebrations, special cakes, bonbons and confectionery products.

 

The new concepts had immediately been very well accepted by the Venezuelan market. However, they did have to overcome great challenges like (1) manage the procurement of supplies to make sure that all of the shops had enough products to buy, and (2) invest in sales and marketing in order to attract potential franchisees. Due to political problems in Venezuela it was hard to find investors and therefore, efforts aimed at marketing and sales had to double in order to sell franchising formats.

Nowadays, the business shows sustainable revenues which validates its added value to the Venezuelan market.

 

The Homework Labs
Calculate your paper price
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

We ensure that all our papers are written from scratch. We deliver original plagiarism-free work. To guarantee this, we submit all work alongside a plagiarism report.

Free Revisions

All our papers are completed and submitted before the deadline. We ensure this to provide you with enough time to go through the work and point out any sections or topics that may need revision or polishing. We provide unlimited revision services for free.

Title-page

All papers have a title page providing your personal and institutional information. We do not charge you for this title page.

Bibliography

All papers have a bibliography or references page. This page is a requirement for academic and professional documents. We provide this page at no cost for all our papers.

Originality & Security

At Thehomeworklabs, we guarantee the confidentiality and security of your information. We value our clients and take confidentiality seriously. All personal information is treated with confidentiality and stored safely to ensure that no third parties gain access to it. We also provide original work and attach an originality/plagiarism report alongside all papers.

24/7 Customer Support

Our customer support team is available 24/7 to provide you with any necessary assistance when you need it. You can contact us at any time, day or night, via email or through the live chat button.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We provide our customers with the best experience in the academic and business writing field.

Pricing

Flexible Pricing

We provide the best quality of service at affordable prices. We also allow our clients to make partial payments for their orders. You can also contact our customer support team in case you need to discuss a different payment plan.

Communication

Admission help & Client-Writer Contact

We realize that sometimes clarification is necessary to ensure that quality work is done. Therefore, we provide a button for clients and writers to communicate in case some clarification is needed.

Deadlines

Paper Submission

We ensure that we submit all papers ahead of their respective deadlines. This allows you to go through the documents and request any revision, corrections, or polishing before the paper is due.

Reviews

Customer Feedback

We encourage customer feedback, positive or negative. We can identify the various areas that we need to improve to provide even better services through your feedback. Please feel free to give us feedback.