BABY BLOOMERS

1987, Philippines

Summary/Abstract

Baby Bloomers is a family enterprise specializing in floral arrangements. Having successfully

established itself as a high-quality florist, it is widely known to the market and has been
immensely profitable. Nonetheless, problem had gathered up in the company operations. Gabby
Fernando as a management consultant scrutinizes the companys history. To gather more details
on the companys operation, he decided to pursue some detective work by having casual talk
with the secretary of the company.

Baby Bloomers chain of stores is own by Mr and Mrs. Picache. The company was founded in
1977 by Mrs. Picaches mother who was the founder of Three Flowers Florist Incorporated. The
Three Flowers Florist was leading supplier of flower arrangements during the time of Mrs.
Picachess mother. Baby Bloomers was envisioned to be novel way of selling floral
arrangements, offering imported materials such as ribbons, baskets, and colorful printed plastic
wraps to complement choice of floral cuts. The outlets were standardized, with lush interior and
an overall air of quality. This enabled the firm to ask for prices that were much bigger that had
been previously being charged in the floral trade. In return, buyers were assured of the prestige
that came with the Baby Bloomers brand name. With this concept the company practically
pioneered the prestige florist industry. The company became a cash cow. And this led Mr and
Mrs. Picache into considering a program of expansion.

The Picache decided to form the Baby Bloomers Commercial Corporation (BBCC), which was
established along with a couple of family friends. BBCC was to undertake Baby Bloomers
expansion, opening several more Baby Bloomers shops in key residential areas. The couple
considered to loans from a nearby development bank. They use their personal real estate holdings
to place as collateral under the corporation name. They also mortgaged other personal lands.
With excessive cash flows from BBCC, Mr. Picache began to consider several of his dream
projects, most of which were not necessarily related to the companys base trade of floral
arrangements. Soon, it became apparent that the companys holding were being stretched to
thinly. Much of the funds available for the servicing of the loans were being preoccupied for uses
as working capital in the enterprise. Unfortunately, not all of Mr. Picaches enterprises were
doing well like the auto dealership company. The biggest blow to the companys came in 1983,
when the devaluation of the dollar exchange rate set in. This makes the companys expenses
increases and the other import-oriented businesses, which were not doing well in the first place,
became an even greater liability to the money-generating Baby Bloomers flower shop. Upon the
conversation of Mr. Gabby to the office secretary he discovered many things that he thinks are
the root cause of the problem.
I Objectives
1. To determine the root causes why most of the import-oriented businesses failed.
2. To know what are the possible ways to settle the pending obligations or loans of the
company.
3. To ascertain what businesses are still capable to remain and will make profit and
businesses that must be withdraw.
4. To identify ways to preserve the status of the company as the leading supplier of
flower arrangements in the floral industry.
5. To know methods and ways to regain the success that the company had before and
recover the financial losses the company suffered.

II Central Problem
How will the Baby Bloomers Company get back its usual condition and how will
the company can recover for all the damages it suffer due to the financial losses it
experience?

III Areas of Consideration

Strength
1. The company has already successfully established itself as a high-quality florist.
2. The company is widely known to the market.
3. The company has been immensely profitable.
4. The prestige it gives to the buyers because of its Baby Bloomers brand name.

5. Mrs. Picache has a sufficient experience in the florist trade.

6. The company became a cash cow, experiencing large amount of cash inflows.
7. It has a high pricing power because of its lush interior and an overall good quality
of the product.
8. It has a standardize outlets.
9. It has a strong management control in the flower shops.

Weaknesses
1. Quick sequence of expansion that are not related to the main business.
2. Weak management of some of the import-oriented businesses.
3. They enter to businesses which they dont have knowledge how they will be able to
operate it well.
5. Improper allocation of funds. Much of the funds available in servicing the loans
were being use as a working capital in the other business.
6. Increasing debt burden.

Opportunities
1. The company can expand internationally because of the good quality product they
offer.
2. They can also create branches in different cities and provinces.
 3. They can provide employment to other people if they will successfully expand their
business.
4. They can provide and think for new products that they can offer in the market and
to new set of customers.

Threats
1. Extreme competition in other well-established enterprises.
2. Unpredictable dollar exchange that will greatly affect the business.
3. Bad reputation or image because of the poor performance of the import-oriented
businesses.
4. There is a chance that some of the customers will not be satisfied to their services.
5. The customers taste and preference changes.

IV Alternative Courses of Action

These are the possible solutions to the problem with corresponding advantages/
disadvantages
1 The Baby Bloomers Company will close out the import-oriented businesses, like
the restaurant, that only gives moderate incomes and will divert its focus in
expanding their flower boutiques.
Advantages:
There is a greater chance that the business will be successful because it the
service they are expert and known.
There are more chances that they can formulate ways in improving and
innovating their products and services.
The company can now management well the business operation because
they will be focusing in one kind of business.
Disadvantages:
There is a risk if the demand of the flowers will decrease the company will
surely suffer additional losses because there will be no other source of
income because they are just focusing in one kind of business.
These kind of product are not necessaries which the costumer consume
everyday thus, there will be a time that the income of the company will be
lower.

2 The company will not do any business expansion for the meantime and will just
focus first in managing their main business which is floral arrangements.
Advantages:
They can manage the business very well since they will be focusing on
only one business.
There is a high chance that the company will not have so many losses.
They can improve their business well since they are more focus to the
operation of the business.
Disadvantages:
 This will make the company stable but not growing because it cannot
place the company in the head of many customers mind.
They will miss a very big opportunity and chance that the company will be
successful in business expansion where it can make the company in a
positive place when it comes in obtaining necessary funding.

3 The company will regain the losses that they have suffers and the success they
had and after the company regain it they will take the opportunity again for
expanding through import-oriented businesses.
Advantages:
The company will have another source of income.
The company has a big chance to have new businesses with qualified
workers. And these people can help in bringing new and fresh ideas that
will help the firm.
This will help the Baby Bloomers to be exposed and known to new
markets that will improve their sales that will probably result to increase in
generated revenue.
Disadvantages:
This project requires a really major financing.
The company may encounter the same problem again
Rapid sequence of business expansion can lead to declining quality of
products and services if not properly manage.

4 Mrs. Picache will train her daughter in managing their floral arrangements
business so that they can help in generating more revenue to pay the unsettled
obligations due to the losses they have suffered in import-oriented business.
Advantages:
They can help the company and their mother to manage well the business.
They can contribute new ideas that will help to improve the services that
the company offers.
They can combine their thoughts to formulate concepts that will help the
company to generate more revenue.
Disadvantages:
There is a risk that they cannot manage well because they are new and
they need a lot of experience before they can manage well the business.
They can have misunderstanding in terms of managing the business.
A possible unhealthy competition may come up to show who is better
when it comes to managing the business.
There is a possibility that they were just force to manage the business but
actually they are not interested with it and so this may affect their
performance in managing the business as well as the business itself.
V Strategy Formulation/ Recommendation
I therefore conclude that the best solution to the problem is alternative course action
no. 1 which is the Baby Bloomers Company will close out the import-oriented
businesses, like the restaurant, that only gives moderate incomes and will divert its
focus in expanding their flower boutiques. It really advantageous to the company to
expand unrelated businesses because of the additional income it may provide, but
they are not skilled and expert in managing other kind of business, they are good and
expert in floral arrangements. Giving up the unrelated businesses may result to a more
time and effort to spend for the improvement and safeguarding of the high-class
quality products and services they have that will probably give them a high profit thus
easily regaining the losses they have suffered. Mrs. Picache should also consider
training her daughter in their business in order for them to build different branches in
different cities and other areas. If they will effectively regain the losses they have
suffered and have a sufficient fund then it is time that they will take into consideration
to expand their business through unrelated ventures so that they will another source of
income and will be known to other and new customers. The company just needs to
know how to properly manage the business expansion so that if problem will arise
they will know how to solve it quickly and successfully.

VI Plan of Action
1. Allotting more time and effort in managing the floral boutiques in order to recover
the financial losses the company suffered.
2. The company will sell the import-oriented businesses to have additional capital for
expanding and building boutiques in different areas.
3. The company should focus on generating revenue to have sufficient fund in paying
the loans and obligation that are still unpaid.
4. The company should think new ideas to come up with a new product and services
that they can offer to the customers.
5. The company will seek assistance to an expert in business management before
making expansion of unrelated businesses.

VII Potential Problem

1. What if the companys profit is not enough to pay the unsettled obligations?
2. What if the trend for floral arrangements ventures decreases due to new taste and
preference of people?
3. What if Mrs. Picache has no longer the ability to double the effort in managing the
business because she is old?
4. What if only limited customers can afford the products and services they offer due
to high price of the material they used?
5. What if they cannot think of any new ideas to satisfy the demand of their
customers?

VIII Contingency Plan

1. They should sell the restaurant immediately, at the first place it only gives them a
minimal income, they should improve their services and product offered so that they
will generate more revenue that will help them to pay the unsettle obligations.
2. The company should come up with new and effective ideas to improve the quality
of the product and services they are offering so that people will still patronized their
products.
3. Mrs. Picache can ask help to her secretary, Mrs. Bengco to help her in managing
the flower shop. Her secretary can help her because she works for the company for a
long time and she surely knows the day to day operation of the business.
4. The company should find materials that are way cheaper but will result to a good
quality product so that many people can still afford their products and buy it.
5. The company should make an effort to research and develop their product so that
they can attract more customers and they can satisfy customers demands.