Competition in the Dutch Flower Markets

Competition in the Dutch Flower Markets

COMPETITION IN THE DUTCH FLOWER MARKETS

Intrigue abounded in the Dutch flower industry when buyers and growers

learned that a special meeting of Board Associates of the Dutch Flower

Auctions (DFA) had been called. What was happening? Why were the CIOs of

Aalsmeer and Naaldwijk, their two largest competing auctions huddled

together in conference?

The need for such a meeting was motivated by the successful emergence of

the Tele Flower Auction (TFA), a relatively new competitor to the

cut-flower and potted plant market. The Tele Flower Auction was enjoying

rapid growth, while DFA's two major auctions were encountering slippage.

About a year after TFA started operations, it could boast an estimated

100 growers and 160 buyers. In fact, for the first time in six years,

DFA's two largest auctions had experienced lower turnover and lower

earnings. This drop in trade motivated all the Dutch Flower Auctions, as

well as the grower organizations, to review the role of auctions,

especially the role of information technology.

Prior to the meeting, the Chief Information Office (CIO) of Aalsmeer

(VBA) and the CIO of Naaldwijk (BVH) had been asked to prepare a report

to evaluate the East African Flower Auction and its growth and inroads

into the marketplace. The report was also to include a history of

Information Technology (IT) in the Dutch Flower Auction, and a

discussion of IT's options and potential impact on DFA's future. The

Board was being pressed to find ways to stem DFA's downward trend and

secure its growth in the cut-flower market.

The following material was prepared for the meeting.

COMPETITION IN THE DUTCH FLOWER MARKETS

Intrigue abounded in the Dutch flower industry when buyers and growers

learned that a special meeting of Board Associates of the Dutch Flower

Auctions (DFA) had been called. What was happening? Why were the CIOs of

Aalsmeer and Naaldwijk, their two largest competing auctions huddled