Offshoring in the Flower Retail Industry - University of Arizona

Running Head: OFFSHORING IN THE FLOWER RETAIL INDUSTRY 1 

Offshoring in the Flower Retail Industry: Using the 24 Hour 

Knowledge Factory to Create a Global Flower Shop 

Maria Klucarova 

University of Arizona 

klucarom@email.arizona.edu 

Copyright 2011, Maria Klucarova. All Rights Reserved. For copyright permissions, contact the author 

directly or Professor Amar Gupta at The University of Arizona (agupta@arizona.edu.)

OFFSHORING IN THE FLOWER RETAIL INDUSTRY 2 

Abstract 

In today’s busy society, a consumer is looking for quick, convenient and reliable services. 

The purchases online are growing rapidly; one can place an order for almost anything at anytime 

via the internet. This paper will examine the 24-Hour Knowledge Factory to offshore the 

American flower retail industry to India, Bulgaria and the U.S. The goal of the “24-Hour Flower 

Shop” is to utilize the 24-Hour Knowledge Factory Model, which will allow the job to be 

performed on a “round the clock basis.” By doing so, the employees in the U.S., India and 

Bulgaria will work during the daytime, regular nine hour shifts. When they finish, all the 

activities will be transferred to a team in another country. By using the 24-Hour Knowledge 

Factory model, the night shifts will be eliminated and services will be provided from different 

countries at all times. The orders can be placed from anywhere in the world and delivered to 

customers in the U.S., South America, Asia, Europe, Africa and Australia. The website will 

provide an 800-number but; most importantly the link which will directly connect a customer to 

a representative in either one of the centers. The face-to-face contact will be available through 

Skype services or the Cisco product “TelePresence”. In conclusion, this paper will address the 

need for more person-to-person interaction with the goal of providing the best and fastest 

services with knowledgeable, skilled and culturally aware teams of representatives in all centers. 

Using that approach, the goal is to satisfy the increasing demand for flower orders online, and 

encourage person-to-person interaction rather than automated answering systems.


I. Introduction 

Floriculture is a huge multi-billion dollar industry and obtains a significant part in 

economies of many countries around the world. As of the sales, 2006 has been reported as the 

best year ever with $2.34 billion in sales for growing greenhouse products but there is also 

reported $1.52 billion in sales (majority is wholesale and public) for flowers and plants 

(“Statistical Agency of Canada”). The flower industry is comprised of greenhouses with cut 

flowers in Israel to numerous amenities that focus on bedding plants in California (Sacramento 

Valley). Floriculture is a part of horticulture that concentrates on cultivation of ornamental 

plants, specifically flowering plants. The major floriculture crops are cut flowers, herbaceous 

perennials, potted flowering plants, foliage plants and bedding plants. In addition to that, the 

flower industry also controls pests that harm and destroy ornamental crops. 

History of Floriculture 

The cultivation of flowering plants has been around for hundreds of years for the purpose 

of decorating houses, offices, expressing one’s feelings; but also for use in religious ceremonies 

and in medicine. Whether it is music, paintings, books, tapestries or ceramics, all of those use the 

flower image in various forms. Many artists in 17 th and 18 th century created magnificent artwork 

where the flowers were an important material source. According to scientists, there are around 

270,000 species of flowers existing in the 21 st Century (“The Flower Expert”). Some of the 

oldest and most popular flowers are carnations, daisies, dahlia, gladiolus and roses (See Figure 

1.1). Carnations were used for Greek ceremonial crowns, daisies were used in ancient Egypt on 

ceramics and considered almost 4,000 years old, gladiolus were symbol of the Roman gladiator, 

and roses first appeared in Asian gardens almost 5,000 year ago.


The flower industry has been growing vigorously through out the years. By using new 

technologies and rapid expansion of greenhouses, floriculturists started breeding many plant 

variations in order to meet a high demand around the world. Today, we can find flowers of 

different shapes, sizes and colors that were not available years back. 

Figure 1.1 

Gladiolus 

Daisy Dahli 

II. Floriculture Domestic and Worldwide Production 

Floriculture production has been growing steadily worldwide in last 20 years with 

average growth of 6 to 9% every year. The fastest growing flower sector is in Asia and the 

United States. Overall in 1985 the production was estimated to be 11 billion dollars; in 1990 to 

24 billion dollars and increasing to 31 billion dollars in 1996; and to 44 billion dollars in 2000, 

and consistently growing to 60 billion dollars in 2003. There are few key suppliers in the flower 

industry that focus on a vast cooperation among each other. This is so they can perform supply 

chain operations throughout year to meet an increasing demand for products. The largest supplier 

of flowers is the Dutch Flower Group with its affiliates in the Netherlands, Switzerland, Spain, 

Kenya, England, South Africa and Zimbabwe, with the earnings of more than 500 million Euros. 

The next big supplier, which is well known especially in southern European markets, is called 

Zurel Group with its earnings of $150 million. In the United States, Dole Inc. is one of the


largest importers that grows its flowers in Colombia and Ecuador, and serves the whole Western 

flower market. 

Flower Production in Europe 

By looking at all different regions, North America, Western Europe and Japan are 

considered to be the major producers but also consumers. Holland is the focal point for the floral 

market in Europe and considered to be the biggest trade center. Also, Holland is the leader in 

flower exports and Germany in import of cut flowers. The trade relationship between Germany 

and Holland is an important element of intra trade in the European Union, but also a significant 

component of the world trade. The major consumer markets for flowers consists of Germany, 

USA, France, Netherlands, Japan, Italy and Switzerland. (See Figure 2.1, “Wikipedia.2011”) 

Figure 2.1 

Major Consumer Markets 

11% 

8% 

12% 

6% 6% 

12% 

27% 

18% 

Germany 

USA 

France 

UK 

Netherland 

Japan 

Italy 

Switzerland 

Alsmeer, a town in the Northern Province in Holland, is the largest flower market in the 

world. Having said that, the flower industry in Holland has been flourishing since the mid 70s 

and became the leading industry in the country. Dutch flower production accounted for over 8


billion blooms, and traded more than 3.2 billion dollars in potted plants and cut flowers in 1995. 

There are almost 5,000 buyers and 11,000 farmers, mostly family businesses that mainly focus 

on growing flowers in greenhouses to provide the best climate. The flower industry of the 

Netherlands is facing few obstacles such as more strict environmental regulations, a heavy soil 

pollution because of the pesticides and fertilizers and the competition from the markets with 

lower cost and good climate like Spain, Israel, India, Columbia and Kenya. Thus, the growers 

started to put more emphasis on the impulse market with higher value-added flowers, which 

appears to be a big part of the successful future of the floriculture industry in the Netherlands. In 

addition to that, a lot of effort is put into research and new technologies to make greenhouses not 

energy consumers, but energy producers. Some of the models that are very popular and have 

been adopted by other countries are the “closed loop system” for crop growing and also the idea 

of the“closed greenhouse” (“Flowers from the Netherlands”). The closed loop system is based on 

the idea of the flower growing in water and rock wool with less need for pesticides and fertilizer. 

This method helped to lessen the environmental concerns, increased the quality of flowers and 

decreased the cost of production. The closed greenhouse method has its basis in catching the 

heat, pumping it into the ground and using it later to heat plants and close by housing. Holland is 

the pioneer in the floral industry for transforming and enhancing its standards, which turned the 

flower cultivation from a seasonal business to a year round industry with better environmental 

awareness. The Netherlands serve markets in Germany, France, Slovenia, Denmark, Finland and 

the Baltic countries, but also in Japan, the Middle East and the United States due to a use of 

advanced technology and efficient techniques that facilitated a lower production cost in Dutch 

flower industry.


Flower Production in the U.S. 

In the U.S., most of the flower production is concentrated in Florida (74% foliage plants 

and 79% cut cultivated greens), California (77% fresh cut flowers and 31% potted flowering 

plants), Texas, New York, Michigan (15% bedding/garden plants) because of the favorable 

climate but also in Ohio, Pennsylvania, Illinois resulting from a good proximity to major metro 

areas (“2007 annual USDA/NASS Floriculture Crops Summary”). In 2008 the retail sales were 

$35.6 billion with $56 of wholesale to each American household. Fresh cut flowers and bedding 

plants are a $10 billion sector of the economy in the U.S The main supplier for South and North 

America is Colombia and for Japan it is Taiwan, New Zealand and Europe. The United States 

imports 68% of fresh flowers that are sold by dollar volume from six major importers (See 

Figure 2.2, “U.S. Bureau of Economic Analysis, November 2010”). The strategy of importing 

the flowers from different destinations generates a large assortment of flowers that are available 

to wholesalers, retailers and customers. 

Figure 2.2 

Top Six Import Countries by Value 

16% 

3% 3% 3% 

6% 

69% 

Colombia 

Ecuador 

Netherlands 

Costa Rica 

Mexico 

Canada


Delivery and Transportation 

The delivery of the flowers is as important as the growth of the flowers. Harvested 

flowers need to be handled with care and delivered reliably to a customer without delays and 

damages. Any mishap would result in ruining months of hard work. It is critical to provide the 

best quality flowers that are disease and chemical free. Since the flowers are highly perishable, 

all the post-harvesting process needs to be efficient and well organized. It is essential to keep 

flowers at a low temperature (close to 0 Celsius) for a longer life span. Humidity is as vital as 

temperature. The flowers should be kept in storage with humidity above 95 percent to prevent 

water loss. Overall, to avoid flower damage and deliver the product in good condition to its final 

destination, one needs to make sure that the storage has a stable temperature, good humidity and 

air circulation to avert any fungi or diseases throughout the entire transportation chain. 

Flower Quality 

Flower consumers are becoming more consciousness of the product’s quality, which 

forces suppliers to inspect flowers more closely. Top quality flowers and consistency serve as a 

great reputation builder for a company. An excellent reputation is a powerful tool that opens 

doors internationally and attracts the customers willing to pay a higher price for top quality 

flowers. In today’s competitive environment, quality, freshness and consistency is a key 

component for gaining and retaining customers. 

The Netherlands auctions are places where the market prices are set for cut flowers. Even 

though the prices have been slightly declining in the last ten years, it didn’t negatively affect 

profits. Rapid productivity growth and high demand for flowers accounted for billions of dollars 

in sales. A small fluctuation in short term pricing is usually linked to climate conditions, seasonal


price patterns and quality. During the summer, the average price of flowers is the lowest and 

during the month of November and December, the average price of flowers is the highest. Once 

the reputation is established and high quality flowers are supplied to the market, the price tends 

to be much higher. 

Governments and Flower Industry 

The flower industry is a large attributor to economies in some countries that provides 

employment opportunities and generates profits from the export. Thus, the governments are very 

much interested in this industry and offer their great support for its growth. They offer 

assistance in collecting market information, enforcing regulations to prevent a spread of diseases 

or fungi, helping with infrastructure by having a cold storage during transportation or at the 

airports, and also assisting in trade by reducing import duties, and having duty free imports that 

would give trade incentives. The Generalized System of Preferences (GSP) and Lome 

Convention are the methods in the European Union that facilitate an easier trade for the exporters 

from African, Caribbean and Pacific Group States (ACP). The GCP has currently 79 countries 

joining in, also 10 countries from Central and South America (i.e. Bolivia, Colombia, Ecuador, 

Panama) and the least developed non-ACP countries (i.e. Nepal, Cambodia, Yemen). Because of 

the GSP, the imports from developing countries are let in at a lower tariff rates, and imports from 

the least developed countries come in at zero tariffs. The Lome Convention provides the duty 

free access for the qualified countries. The Netherlands employs around 100,000 people in the 

flower industry. For countries like Ecuador and Columbia, the industry gives jobs to 45,000 

people with the contribution of 100 million dollars from exporting in 1997 and 80,000 people 

directly and 50,000 indirectly, respectively. Due to a wonderful geographical location and 

landscape, Ecuador has a big comparative advantage in floriculture with a large market share


internationally. The country exports over 60 varieties of flowers all over the world from which 

75% are roses. According to the Ecuadorian Flower Producers and Exporters Association, 

profits have been continuously rising; in 2006 the earnings from flower exports were around 398 

million dollars, with 8% growth from 2005, and the sale volume of 114 million tons of flower 

which places Ecuador as number four in the world for flower exports. Lower labor and 

production costs and perfect climate conditions predict a bright future for the flower industry, 

which will continue capturing larger market share around the world. 

III. Categories of Floriculture Crops 

It is important for growers and retailers to pay attention to what sells in the market, be up 

to date and offer a large assortment of flowers. Demand for flowers is quite capricious and 

changes are due to trends such as color and shape, and consumer’s taste and preferences. In fact, 

it is quite common now that the customer looks for unusual flowers, which are responsible for 

shifting the demand patterns in the industry. Consequently, less known specialty flowers have 

become in much higher demand than they had been in the past. The flower industry today is 

bigger that most realize. According to U.S. Census of Agriculture (2003) flower production was 

number three among the crops which was only exceeded by corn and soybeans. In 2005 

floriculture alone brought in 5.4 billion dollars in production value. In 2004 the global trade for 

fresh cut flowers was 5.5 billion dollars from which 70% accounted for trade with the European 

Union (“Trade Information Brief/Cut Flowers and Foliage”). 

The floriculture crops can be divided into few categories such as Bedding/Garden Plants, 

Potted Flowering Plants, Herbaceous Perennials, Vegetables, Foliage (Green) Plants,


Propagative Materials, Fresh Cut Flowers and Cut Cultivated Greens (See Figure 3.1, 

“Floriculture: The Numbers. courses.missouristate.edu.US”). 

Figure 3.1 

12% 

Cut Flowers 

$359 

Foliage 

Plants 

$454 

Herbacious 

Perennials $492 

Floriculture Crops by Plant Category, for Operations 

w/$100,000+ Sales, 2009 

10% 

13% 

10% 

2% 

17% 

36% 

Bedding/Garden 

Plants $1,317 

Potted 

Flowering 

Plants $632 

Beddin/Garden Plants 

Potted Flowering Plants 

Herbacious Perennials 

Foliage Plants 


Floriculture Crops by Plant Category, for 

Operations w/$100,000+ Sales, 2009 

Propagative 

Materials 

$358 

Cut Cultivated 

Greens $74 

Propagative Materials 

Cut Cultivated Greens 

Beddin/Garden Plants 

Potted Flowering Plants 

Herbacious Perennials 

Foliage Plants 


Propagative Materials 

Cut Cultivated Greens


Cut Flowers are blossoms from flowering plants that are used for decoration but also for 

seeds and bulbs. However, the flowers can be preserved, fresh or dried. In the US, California 

accounts for 70% of production. Since the cut flowers are highly perishable, careful and efficient 

delivery with cold storage conditions are essential. A quick distribution of flowers to their final 

destination will lengthen their vase-life. (See figure 3.2, “Floriculture: The Numbers.2009.US) 

Figure 3.2 

70 

60 

50 

40 

30 

20 

10 

0 

63.7 

Fresh Cut Flower (in million dollars) 

57 

33 

23 

17.6 

15.6 14.4 

11.3 9.9 

courses.missouristate.edu 

Foliage plants are cultivated ornamental branches, leaves, ornamental stems used in 

bouquets and varieties of arrangements. The world trade for foliage is $904 million, which is not 

that large like the market for cut flowers. The foliage market has been growing at a fast rate; at 

7% per year since 2000 and at 8% since 2003, mostly in some European countries. 

6 

3.3 

1.6


Bedding/garden plants dominate the U.S. Floriculture sales. In 2009, bedding/garden 

plants were 35% out of $3.8 billion sales of Floral Crops. There are around 100 plant species 

(annual, perennial, vegetables, small pots) like petunias, impatiens, begonias and geraniums with 

the increased production of annuals and perennials in Midwest and Northeast of the U.S. 

Potted Flowering Plants account for 17.2% of the flower crops. The most popular potted 

plant in 2009 that took over the top spot in the U.S. were orchids. The orchids sales have been 

growing throughout the years: $47 million in 1995, $129 million in 2004, $144 million in 2005, 

$134 million in 2008 and $159.6 million in 2009. Orchids have been also in high demand in 

Japan and the Netherlands. Increased demand for orchids in 2000 was due to high quality and 

lower prices, which made these flowers more affordable. In 2009, orchid prices went up and so 

did the domestic production of orchids. The imports for orchids climbed to 70% since 2000. The 

number two potted flowering plant is Poinsettias with the sales of $145 million, and number 

three in the U. S. is Florist Azaleas with the sales of $32.2 million. Florist Azaleas is mostly 

imported from Canada to the U.S. 

In order to be successful in growing, distributing and selling flowers, one needs to be 

familiar with the trading practices in the flower industry in different markets, needs to take into 

account local conditions for growing flowers such as climate, soil, infrastructure, labor, but also 

it is important to know varieties of flower species and breeds that are available. Also, one needs 

to establish an efficient distribution chain, and lastly one needs to be aware of the present trends 

and consumer’s preferences so the demand can be met and all parties satisfied.


IV. Trends, Internet and Holidays Sales 

Trends 

Growing demand for flowers due to higher income and increasing standards of living in 

many countries is resulting in the markets that are not fully supplied yet. Demand for flowers is 

income elastic meaning that when income goes up the demand increases as well. There is a direct 

relationship between income and demand for flowers. According to the Dutch Flower Council 

Report, by the end of 2014 the flower consumption that involves potted and cut flowers will 

grow 31% with annual earnings of 46 billion Euros. Among the fastest growing markets are the 

UK, Spain, Ireland, the Czech Republic and Hungary. On the other hand, the fastest growing 

producer is Russia with a large consumption trend and spending estimated to be three times 

larger than spending in 2004. The report expects the UK to pass Germany, the current largest cut 

flower consumer. Extensive economic growth in Hungary, Poland, the Czech Republic and 

Ireland will lead to greater flower consumption in those countries. 

As a result of increasing competition in the flower industry, the suppliers concentrate on 

lower cost production and use of advanced technology to make their flower delivery available 

year-round. In addition to that, focusing on providing high quality products and supplying the 

markets that have not been saturated yet is essential to future success in this industry. With 

increasing orders for the flowers for the purpose of decoration or home gardening, the flower 

industry sales with continue to grow. (See figure 4.1 “U.S. Bureau of Economic Analysis, 

2010”).


Figure 4.1 

Internet and Holiday Sales 

Nowadays, great technology allows growers and consumers to distribute and obtain 

flowers across the globe. We could say that there are no boundaries anymore. The individuals 

around the world use the flowers to express their sadness, love or gratitude. The most popular 

flowers are roses, carnations, tulips and daffodils. Even though flowers can have different 

meanings for people in numerous countries, the purpose of giving and receiving is alike. Plants 

with various shapes, smells and colors speak an identical language that the recipient can translate 

without any words anywhere in the world. Flowers bring harmony, happiness and peace in


offices, homes, hospitals and are also used as an anti-pollutant where they serve as filters 

removing dangerous toxins. 

The top five holidays with the most fresh cut flower purchases are Christmas/Hanukkah 

(30%), Mother’s Day (24%), Valentine’s Day (20%), Easter/Passover (13%) and Thanksgiving 

(6%) (“Ipsos/AFE Consumer Tracking Study, 2005”). 74 % of women are considered typical 

fresh cut flower buyers and the remaining 26% goes to men. The females are usually between 45 

and 54 years of age (26%), with college education (30%), full time employment (43%) and 

earning over 75,000 dollars (33%). 

Online shopping is becoming more popular among the consumers. People around the 

world use the Internet to purchase goods and services. Customers in the Asia Pacific region, 

Europe, North America and Latin America are the most thriving online shoppers. In Europe, 

79% of consumers plan to make online purchases in the next six months. In Asia Pacific, 95% of 

consumers want to make online purchases, and in Latin America, Brazil expects 84% of 

consumers to make online purchases in the next six months. The opposite is true in the Middle 

East, Africa and Pakistan. Those regions are most underdeveloped when it comes to online 

shopping. Half of the consumers claimed that they never made any online purchase. Overall, the 

number of online shoppers is going up every year due to easier access to Internet and increasing 

purchasing power. 

Today’s Internet access and availability is responsible for a fast growth of online 

shopping. Even though the economies have been suffering throughout the globe, e-commerce has 

recorded substantial sale increase especially during the holiday season. Coupons, free delivery 

and various discounts are fantastic marketing tools used by the online businesses to attract more


buyers. In fact, the online shoppers are benefiting from the convenience, flexibility and 

promptness that e-commerce offers. Online reviews and recommendations are also accessible to 

customers for future purchases. The customer can place an order anytime, from anywhere, and 

have it shipped and delivered to any continent. Another important phenomenon in today’s 

technology is a mobile commerce also known as m-commerce. Through adaption of 

smartphones, the people are able to do online purchases, which have been driving up the sales in 

the mobile commerce channel. According to the Nielson Global Report, there were 19% of 

smartphones in use in 2009, 31% in the third quarter of 2010 and it is expected that there will be 

49% of smartphones in use in the third quarter of 2011. 1-800-Flower.com reported sales of 

104.5 million dollars in first quarter of 2011 due to m-commerce. 

The purchases for plants and flowers done through the Internet in 2005 accounted for 

2.4% with spending of 7.7%, 12.3% on floral arrangements (“Ipsos/AFE Consumer Tracking 

Study, 2005”). Forrester Research (2007) projected that 1.2% of the Internet sale of $207.2 

billion in 2008 was on plants and flowers with the annual rate of growth of 30%. 

V. 24-Hour Knowledge Factory Application in Floral Industry 

The 24-Hour Knowledge Factory concept can be also called the “follow the sun” method 

where the work flows from one country to another in different time zones. This idea has its roots 

in the industrial revolution when it was used in manufacturing facilities where the employees 

worked constant day and night shifts. The 24-Hour Knowledge Factory and its connection with 

offshoring in different countries with various time zones will allow workers to do their job 

during the regular daytime working hours. After the shift is over, the tasks are passed from one


team to another team. Therefore, the teams that are participants in the 24-Hour Knowledge 

Factory will work around the clock. For the team members, the work environment is spread out 

globally with the workstations located around the world. The opposite of “follow the sun” is 

“follow the moon” where the job is done during the night shift with most common purpose of 

lowering the utility cost. 

The goal of the 24-Hour Knowledge factory and Offshoring is to operate during the day 

and accomplish a given assignment or task in less time, while delivering the product or service to 

a consumer in shorter period of time. So as to achieving the objectives, the teams located on 

different continents need to be well trained so they can overcome different language, cultural and 

team separation barriers that could limit them on their path of attaining the goals. 

The Online Flower Shop, Utilizing 24-Hour Knowledge Factory and Offshoring 

The concept of the 24-Hour Knowledge factory and offshoring will be applied by a “24- 

hour flower shop”. This business will be an online establishment whose website will be created 

by a professional design company from the United States. The company’s objective is to provide 

express and high quality services. There will be couple options for the customer to place an 

order. The customer will be able to use 1-800 number, or there will be another option where the 

customer can use the provided link on the website to connect him/her to an agent. This will 

enable real time face-to-face conversation rather than using an automated answering system. 

Person to person interaction is accessible through Skype services. After the order is placed, the 

representative needs to allocate appropriate flower retailer or wholesaler that is the closest to a 

final destination for the flower delivery. The representative will also arrange for the confirmation 

to be sent to a customer after the flowers will reach intended recipient. All the customers are able 

to share their feedbacks and experience with the services via phone, email or Skype services.


Every suggestion and concern that customers have will be addressed and changes will be made. 

At the end of every shift, the representatives in each calling center need to make sure that all the 

information such as placed orders, customers’ feedbacks, confirmations are transferred properly 

among the calling centers. This is essential when the one wants to provide fast, reliable and 

efficient services. 

By actually talking to a representative through Skype services, every customer gets a 

chance to ask questions about flowers and receive advice regarding the flower type that is 

appropriate for their intended message. All the employees in each calling center are well-trained 

and have a great knowledge about floral arrangements for different occasions, but also are aware 

of customs and flower traditions in various countries across the globe. When sending flowers to 

the countries of Eastern Europe, one needs to know that is not appropriate to give an even 

number of flowers if there are less than dozen of them. Also, chrysanthemums, carnations and 

lilies are given only at funerals whereas in Russia and Ukraine, the yellow flowers are not 

suitable for weddings because they consider newlyweds to be unfaithful to each other. 

“24-Hour Flower Shop” will be able to provide around the clock services through the 

establishment of three calling centers located in different time zones. There will be one calling 

center in Tucson, Arizona in the U.S., the second one in Jaipur, Rajasthan in India and the last 

one in Europe, in the city called Varna in Bulgaria. The shift’s time is set according to Tucson 

time zone: in Tucson, the shift will span from nine a.m. to six p.m.; in Jaipur, the shift will span 

from five p.m. to two a.m. (five a.m. to noon local time); and in Varna, the shift will span from 

one a.m. to ten a.m. (ten a.m. to six p.m. local time). The one-hour overlap will be utilized by the 

team with the finishing shift, which will transfer all the necessary information to the second shift 

in another location. (See Figure 5.1)


Figure 5.1 

Workflow Model Utilizing 24 Hour Knowledge Factory (in Tucson time 

All three teams are performing the same work and the same functions such as taking orders, 

giving customer advice, looking for a flower wholesaler or retailer that is the closest to a place of 

delivery. Each center, whether in India, U.S. or Bulgaria is responsible for the work done during 

the shift. The reasons for choosing these countries are suitable time zones, cheap and skilled 

labor that will help to cut the cost, increase efficiency and make face-to-face services available to 

customers 24/7 around the world, not just in the U.S. As for the income, Bulgaria’s average 

income is 122.7 Euros per month (around $173 per month/$2,076 per year), which is the lowest 

one in Europe according to Eurostat 2011. Looking at the minimum wages throughout the 

Europe, the minimum wage in Luxembourg is 14.3 times higher than the minimum wage in 

Bulgaria. Even though the GDP per capita in Luxembourg is only 6.4% higher than the GDP per 

capita in Bulgaria, the minimum wage in Luxembourg doubles. There are only six countries 

where the minimum wage is more than one thousand Euros. Those countries include 

Luxembourg, the Netherlands, Belgium, France, Ireland and the United Kingdom. The average 

income in India is 155 rupees per day for a skilled worker (5 days a week times 155 rupees equal


to 775 rupees a week/3100 rupees a month) which is $3.50 per day/$69.38 per month/$832.56 

per year (“Paycheck.in. Minimum wages in Rajasthan. 2011”). In Arizona, the minimum wage 

is $7.35 per hour, $1,176 per month working forty hours a week/$14,112 per year (“Industrial 

Commission of Arizona”). By offshoring the services to Bulgaria and India, the business can 

lower the labor cost and utilize the skills and knowledge of overseas workers. (See Figure 5.2) 

Because of the quick access to Internet and use of mobile devices, the customer can place 

an order at anytime from anywhere, and have it delivered to any country in the world. 

Figure 5.2 

Cost of Centers in the U.S. vs. Offshoring/24-Hour Knowledge Factory 

Country Wages/Monthly Wages/Yearly 

U.S.A. $1,176.00 $14,112.00 

India $69.38 $832.56 

Bulgaria $173.00 $2,076.00 

Total $17,020.56 

Country Wages/Yearly 

U.S.A./Arizona $14,112.00 

U.S.A./California $15,360.00 

U.S.A./Nevada $15,840.00 

Total $45,312.00 

Data from the Bureau of Labor Statistics, U.S.


“24-Hour Flower Shop” puts a lot of emphasis on face-to-face interaction that is becoming quite 

rare. Through more personal approach and interaction with customers, 24/7 service accessibility 

and high quality products and services, the online flower shop is differentiating itself from other 

flower businesses. 

VI. Conclusion 

The 24-Hour Knowledge Factory concept in the flower industry would allow the task or 

assignment to be done much faster on a round-the-clock basis. All the representatives in three 

calling centers will be able to share their experience, and stories throughout the video-conference 

at least once a month. The goal is to create a comfortable and friendly working environment so 

the workers could build long lasting relationships among each other across the globe. Once the 

24-Hour Knowledge Factory is adopted, the workers, consumers and the company as a whole 

will be benefiting from this concept. Therefore, the workers will have workday hours, 

eliminating night shifts; the company will gain a skilled and cheaper labor by offshoring in 

countries with different time zones; and lastly, the product will be available in the market much 

sooner for the present high demanding consumers.


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