This article has been published at Business World last October 1, 2009.

It used to be that people had to go to flower shops to select an arrangement they would hand carry to give to their intended recipient. Others would call their favorite florist to deliver their orders if the destination was within city limits. Dustin Andaya figured that it was time to really think out of the box; it was time for tradition to go high-tech.

Mr. Andaya, chairman and marketing director of Philippine Cut Flower Corporation, believes in flower power. “Whether you are congratulating, apologizing, professing your love or simply saying hello, flowers seem to multiply the effect of the messages that you send. People just can’t seem to get enough of them!” This universal appeal of flowers convinced him that the family business could be transformed into the largest flower delivery company in the Philippines. Armed with an MBA from the Bath School of Management in the United Kingdom and experience from previous jobs, Mr. Andaya made it his mission to offer affordable high-quality bouquets while retaining good margins for the company, made possible through direct distribution.

This vision was a major shift for Philippine Cut Flower Corp. since it originally relied on a traditional wholesale model of distributing roses to flower shops and hotels. When Mr. Andaya took over in 2000, the company earned a modest amount in sales. Realizing that it did not have the financial capacity to reach its business objectives using conventional methods and recognizing the power of the Internet, Mr. Andaya turned to technology. He invested P50,000 of his savings to build an e-commerce Web site — www.islandrose.net — to sell flowers directly to end users. Through the site, clients can order flowers straight from the farm and have them delivered to any location in the Philippines. Making use of international search engines and local online publications, Mr. Andaya aggressively promoted the retail sale of flowers. “We pushed new media to its limits,” he declares. The system proved to be such a success: orders from all over the world came pouring in.

To be able to deliver on Island Rose’s commitment to reach its customers despite geographical constraints, Mr. Andaya used an existing but untapped resource — local couriers capable of sending packages all over the country. Tedious negotiations with established firms fell on deaf ears, prompting Mr. Andaya to partner with a start-up courier instead. The partnership lasted for a couple of years until the courier company closed down. Undaunted, Mr. Andaya renewed negotiations with established couriers, this time eliciting positive responses from two major companies. The agreements with these couriers came with a no-liability deal: If customers are not satisfied with the freshness of the delivery, Island Rose will replace the flowers at no extra cost to the courier. This system was so successful that a major courier firm put up its own flower delivery service with Island Rose as its sole supplier.

What spelled success for Philippine Cut Flower Corp. is its strategic use of technology and innovation. Partnering with local couriers instantly gave them nationwide coverage while promoting through the Internet saved on advertising costs. “Sometimes thinking out of the box enables you to break down doors that have been previously barred shut. Had we not innovated, Philippine Cut Flower Corporation would just be another run-off-the-mill flower distributor,” Mr. Andaya says. Direct distribution worked wonders both for the company and customers. Removing layers of middlemen resulted in lower prices and better margins. These approaches raised industry standards and Island Rose’s e-commerce model has become the standard for many firms aspiring to be online retailers.

In 2003, the success of Island Rose was regarded by the International Trade Center, an agency affiliated with the World Trade Organization, as outstanding enough to represent the Philippines as a “best practice model” for its use of information technology in the small and medium enterprise category. Technology plays a significant role in the growth of Island Rose and with the clarity of Mr. Andaya’s corporate vision, the company has capitalized on the benefits offered by technology. There were doubts when Mr. Andaya first started upgrading software for the company and computerizing the farm. But now the members are totally wired — they maintain Facebook and instant messenger accounts, participate in online forums, track complaints and review feedback from different Internet sites. Island Rose employs a lean staff but they are able to deliver with efficient use of technology. “We continually invest in maintaining our servers and Web site. We make sure our payment gateways are the best…,” says Mr. Andaya.

Island Rose’s services do not stop at the direct delivery of the freshest blooms. They also offer flower delivery to corporate buyers. This allowed many retailers to sell flowers without carrying expensive and highly perishable inventory. Providing back end services to small entrepreneurs and to large corporations is what Mr. Andaya calls a hassle-free sideline. By simply advertising Island Rose, collecting payment and passing on the order to Island Rose, they are provided with a means of livelihood. This affiliate service provides additional income for secretaries in companies and other people who host Island Rose banners on their Web sites.

From a modest P15 million in 2000, Island Rose is projected to exceed the P40 million mark in sales this year. This growth is due to Mr. Andaya’s aggressive marketing through newsletters, social networking sites, blogs and online advertisements. He understands that while marketing strategies put one’s business on the map, it is ultimately customer satisfaction that sustains the business. “Island Rose works hard in keeping relationships alive. We literally go the distance to further our reach just so we can help maintain the connection between families and loved ones who are physically apart,” Mr. Andaya says. Filipinos abroad can easily go to a remittance company or a Filipino grocery where they can buy flowers through Island Rose for their loved ones in the Philippines.

Aside from tapping the huge OFW market, Mr. Andaya is also constantly on the lookout for emerging trends. Expanding both its flower and gift line, Island Rose recently launched its “off-the-shelf” wedding packages. Island Rose’s exclusively branded gift line that includes Belgian chocolates and messenger bears is one of the fastest growing segments of the business.

Testing the Asian waters, Mr. Andaya hopes to go international. “We’ve successfully made retail deliveries to Hong Kong and I’m looking at other neighboring countries for expansion,” he says. Mr. Andaya’s entrepreneurial mind and can-do attitude have earned him recognition from the Philippine Marketing Association as the 2008 Agora Awardee for outstanding achievement in entrepreneurship.

Despite his breakthrough business model, Mr. Andaya unabashedly admits to being a “conservative” entrepreneur. But this is only because he knows that sound management decisions make a business last. “In an ever-changing economy, one has to learn to turn with the tide. I always make it a point to hope for the best and plan for the worst,” he states.

“I report to 40 people who call me ’Boss’. However meager the number, these people have wholeheartedly put their trust in me and a single uncalculated risk on my part can destroy 40 lives. As an entrepreneur, you are duty-bound, above all else, to watch out for the welfare of your people.”

Sponsors of Entrepreneur Of The Year Philippines 2009 are SAP Philippines, William J. Shaw Foundation, Philippine Amusement and Gaming Corporation, and Universal Motors Corporation. The official airline is KLM Royal Dutch Airlines, operating on behalf of the Air-France KLM Group in the Philippines. Media sponsors are BusinessWorld and the ABS-CBN News Channel.

The winners of the Entrepreneur Of The Year Philippines 2009 will be announced on October 15, 2009 in an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2010 in Monte Carlo, Monaco in June 2010. The Entrepreneur Of The Year is produced globally by Ernst & Young.

The Entrepreneur Of The Year Philippines 2009 has concluded its search for the country’s most successful and inspiring entrepreneurs. It is a program of the SGV Foundation, Inc. with the participation of the Department of Trade and Industry, Ateneo Graduate School of Business, Development Bank of the Philippines, Philippine Business for Social Progress, Philippine Stock Exchange and the Schwab Foundation for Social Entrepreneurship. In the following days, BusinessWorld will feature each of the finalists.