Arrow Electronics Inc. Case
Arrow Electronics is a distributor of electronic parts, including semiconductors and passive components. It was founded in 1935 and has reached number one position among electronics distributors by 1992. Arrow’s North American operations were headquartered in Melville, N.Y. Sales and marketing functions were divided among five operating groups. This case study focuses on the largest of Arrow’s groups, Arrow/Schweber (A/S).
Express Parts, Inc. made a proposal about an internet-based trading system which would enable distributors to post inventories and prices to an internet platform and thus give customers the opportunity to shop for prices.
The question is if Arrow/Schweber should accept the offer of Express and sell their products via this internet-based trading system. In the best case A/S could gain transactional customers, who just want to buy a product and have no need for special service. In the worst case A/S could lose relationship customers, because the possibility of getting better prices on the internet platform is higher, since there are more competitors that can be compared.
Customer relationship
The approach of A/S is to use the VA products as the first step to building a relationship with its customers, because it is difficult to get close to a customer through the BAS business.
Although relationship customers also use the BAS system, it is more valuable for transactional customers. Since transactional customers emphasize more on quick delivery and low prices, but less on relationships, A/S focuses its efforts with the BAS system on providing the transactional customers with these values.
In order to satisfy the needs of the relationship customers either, A/S pursues...
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All in all A/S should reject the offer of Express referring because of three crucial aspects:
o Impairment of suppliers,
o Probably losses in gross margin,
o Loss of A/S’s strategy / focus on relationship customers.
After this decision internet distributors and Express respectively has to be considered as strong competitor due to the price-sensitivity of the electronic industry. Therefore A/S should work on its company image to highlight their advantages compared to discounters. Therefore A/S has to point out that they are aware of being not the cheapest but nevertheless will create more benefit for the customers by offering service and competence.
In sum, internet distributors are a foe to A/S because they cheat the price. To them A/S has to respond as convinced anti-internet distributor by satisfying their customer needs instead of disembowel them.
The threat of online competitors is also present to every discount broker that has not switched to online trading or chooses to remain with their current business model and not offer online services. These online trading sites have unique trading capabilities that otherwise are not present at Edward Jones. They offer sound advice on stocks and other investments instantly. Each customer has to call their Edward Jones advisor in order to place a trade. This makes sense to Edward Jones because they want to help prevent the rash decisio...
Amazon.com’s US operation business model is based on “sell all, carry few”. Amazon offers consumers a wide selection of products while keeping inventories at low levels. A major interest for Amazon in the US is optimization of netwo...
...2013). Cisco channel sales and inspiration in the age of internet. Contemporary Logistics, (12), 14-30. Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/1468933047?accountid=3783
Warsia, Noor. (Designer). (2013, June 7). The Fulfilment by Amazon distribution model [Web Graphic]. Retrieved from http://www.digitalmarket.asia/2013/06/amazon-flows-into-india-ebay-snaps-a-us50-mln-deal-e-commerce-in-apac-to-get-fillip/
The industry has loyal customers with broad customer base that lowers the collective bargaining power of buyers to medium. The switching cost is very low and thus the customers can turn to a service provider who provide faster and innovative service but this is overcome by customized services and integrating into their customer supply chain.
In addition to the change in behavior of consumer, many companies or retailers change the sales channel combinations. The greatest impact of the Web-bases electronic revolution has occurred in companies adopting the click-and-mortar approach. Click- and-mortar is one the strategy used by the companies or retailers that they continue to conduct their business in the physical locations and have added the electronic commerce component to their business activities. According to one study, 37% of United States retailers are selling through a combination of the internet, in stores and catalogs. This represents a growing demand for the business-to-customer package delivery service.
Li & Fung is a global trading group sourcing and managing the supply chain for high volume, time sensitive consumer goods. The group is associated with strong brands such as The Limited, Gymboree, American Eagle, Warner Brothers, Bed, Bath & Beyond, Levi-Strauss. With the rise of the internet, and the thrive of the B2B intermediaries, this memo will discuss the Li & Fung's E-Commerce strategy and how to use internet to facilitate supply chain management.
Business-to-business companies are relationship driven. They are offering another company a product or service that the company should use to their benefit, and in order to sell this product or service, they have to build a strong, working relationship between the two businesses. B2B companies have to maximize the values of the marketing strategy: relationships and trust. In order to be successful, these two businesses must be able to trust each other, work together, and form a working relationship that will benefit both businesses in the end.
In general terms, the organizational structure of the Electronic Products Division of Allentown follows the same structure of the other divisions. Under the General Manager there is a controller, a product development manager, a manufacturing manager (with three plants treated as three different profit centers), a sales manager and a marketing manager. The last two may be the major difference regarding the general structure of the company, since sales and marketing are usually combined in one single department. The breakdown in two departments has been made by the general manager, reasoning that the sales division should be concerned about short-term actions, while the marketing one should take care of pricing policies and strategic plan.
The SWOT analysis will help Amazon to continue its strengths, improve shortcomings, take advantage of opportunities and develop measures to deal with threats. In other word, this will help Amazon prepare adequate solutions to maintain the leading position. Through CRM, Amazon focuses on being loyal to their customers, when they are loyal to them, they figure that in return their customers would recommend others and continue to shop with them and make future purchases. Amazon makes sure that the infrastructure is taken care of so that the retention is there. When the retention is there they will continue to grow and expand their product lines so their customers will not have to take their business elsewhere. To make sure that the customer satisfaction is taken care of they live by Sic Core Values to make things happen to make sure that everything stays in order. Amazon has maintained the mission of always taking care of the customer. They currently account for tremendous distribution systems that in some way be accounted for the success the company has since it ads real value to the service they have offered. In addition to CRM and other technologies the SWOT shows a variety of ways to overcome challenges, and add value to the company. In my opinion Amazon truly values their customers and are always working on ways to improve their products and
well as digital retail. The company relies heavily on their Every Day Low Price (EDLP) strategy which seeks
Values of Arrow/Schweber (A/S): Being as the subsidiary of the No.1 distributor of electronic parts company Arrow Electronic, A/S is able to provide customers low price electronic parts and add-value system design solution. A/S also creates demand and provides the inventory buffer for suppliers. The Customer benefits from A/S of low cost parts, technical support and short delivery lead time. And suppliers benefit from A/S of hassle-free sales. Internet trading service Express creates one more level to the existing value chain (Exhibit 1). Express allows A/S to have opportunity to sell product to potential customers. And customers can place order on different distributors. But whether this business model is valuable to the customer especially to small OEM and CM is questionable. Although transactional customers are price sensitive, time to market is also critical to them. They prefer to place entire order within one company to make sure the short delivery lead time. Under this circumstance, jumping into the Express boat is not a wise decision for A/S.
and is especially popular among eBay customers. Fig.1 briefly illustrates Company’s business. The system enables its
Liang, R. (2013). Cisco channel sales and inspiration in the age of internet. Contemporary Logistics, (12), 14-30. Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/1468933047?accountid=3783
As Peter Duckers has put it, "The ultimate aim of all business organisation is - to create a customer". These days, for most products and services, the market belongs to the buyer. The customers e...