ARROW ELECTRONICS, Inc.

[GROUP 7]
Flow of presentation
Ø About ARROW & A/S
Ø Features of Distributors and supplier tie-
up
Ø Supplier’s strategy and impact on
distributors
Ø Distributor customer relationship
Ø Selling effort
Ø What should ARROW do?
Ø References
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Arrow Electronics
Ø Into the business of Distributing
Electronic Parts
Ø Founded in 1935
Ø Reached the no. 2 spot by 1980
Ø First position by 1992 (Market leader)



 Arrow/Schweber
Ø One of Arrow’s five operating groups
Ø Sells semi-conductors to different customer
bases like Original Equipment Manufacturers
(OEM) and Contract Manufacturers (CM)
Ø Sales of 2.07$Billion of 6.5$Billion of Arrow
Electronics’ total Sales


THE WAY THE INDUSTRY WORKS:

S u p p lie rs
: Motorola , Inteletc .)--25 % to 35 % of sales D istrib u to r( E g : a rro w ) C u sto m e rs ( like O E M )

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 Features of Distributors and supplier tie-
 up


Ø Improve the demand

Ø Suppliers Grow and gain in the profit &
market share
Ø Promote new Products
Ø Identification of future trends
Ø Inventory at hand
Ø Customized solutions are available
Ø

Supplier’s strategy and impact on
distributors
Ø Design Win
 Preference based system
Ø Jump Ball
 Non Preference based system

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 Distributor customer relationship

Ø Credit facilitation to customers

Ø Small order Size & Short lead times
Ø Value Add Services
Ø Updates on product Availability
ØLocking in growth opportunities


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  Customers

ü Customers are…
ü Transactional (37%)
ü Mostly Book & Ship
ü Relationship(63%)
ü Mostly Value Added
ü Cross Selling


A/S’s Relationships: Customers

A/S’s Customers
Efficient selling effort of a/s
Ø It facilitates customers to order in small
quantities, give them credit management and
highly efficient logistics which can deliver
right quantity of goods at right time.
Ø By relying on efficient forecasting they can tap
on potential markets for the suppliers
Ø Meeting customers needs to fullest extent by
altering components by programming,
packaging and kitting
Ø High level of security and BAS type selling has
enabled it to convert at least half of
transactional customers to relational
customers over the long haul
Ways in which express make the business
vulnerable…
Ø A/S may lose business with relationship
customers and half of the business with
translational customers as customer can
select combination of distributors
Ø Loss of credentials of the distributor in
transaction process a.
Ø Internet can mean lost control for the
suppliers.
Ø Commodity product margins is a major
source of revenue for suppliers…fall in
price too fast in not desirable for them.

h o w ca n exp re ss b rin g b e n e fit to th e



o rg a n isa tio n ??

Ø Volume of sales can be increased as

accessibility increases manifold with
internet.
Ø Loss of transactional customers can be
compensated by the additional business
that it gets.
Ø Cost of marketing expenditures
decreases.
Ø Over the long haul the flux in the business
can be beneficial.
Ø Be in competition along with the other top
 What should arrow do?

Ø If arrow joins express it loses visibility for

the long run. This is very important for
future growth. It will also endanger
itself of the present transactional
customers.
Ø Relying on a market is not as good as
relying on a friend.
Ø So it will be preferable for arrow not to
join Express.

Compensating effect after not joining
express

ØD e ve lo p a n in te rn e t b a se d tra d in g

syste m sim ila r to exp re ss’ o r e ve n
 m o re e fficie n t to it b y ta kin g m o d e ls o f
existin g m a rke t p la ye rs.
ØM a in ta in b ra n d id e n tity

ØTry to g e t in to o n lin e b u sin e ss a s fa st a s

p o ssib le a s it w illg ive a d d itio n a l
cu sto m e rs
References
Ø wikipedia.org
Ø arrow.com
Ø ec.europa.eu
Ø mightystudents.com
Ø searchcrm.techtarget.com
Ø
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

 THANK YOU

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