Essay Case Analysis: Arrow Electronics, Inc.

1086 Words Mar 7th, 2011 5 Pages
The overview of the case
Arrow Electronics is a broad-line distributor of electronic parts, including semiconductors and passive components. It was founded in 1935 and grown to the number two position by 1980. When Stephen Kaufman, who became president in 1982 and CEO in 1986, Arrow once more began to climb, reaching the number one position among electronics distributors by 1992.
Arrow/Schweber, one of Arrow’s five operating groups and the largest one, which sells semiconductors to different customer bases like Original Equipment Manufacturers (OEM) and Contract Manufacturers (CM). Sales of 2.07$ Billion of 6.5$ Billion of Arrow Electronics’ total Sales.
Express Parts, Inc. was a new, independent distributor that developed an
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The “big four” top suppliers of A/S are Altera -Proprietary programmable logic devices, Intel - Mostly Propriety, Texas Instruments and Motorala.
2. Customers
The existing customers of A/S base of Small & Mid Sized original equipment manufacturers (OMEs) accounted for 56% of sales in 1996. The second market is the Contract Manufacturers (CM) accounted for 20%. The two other major customer segments are the PC Clones (X86s) with the market share of 11%.
The characteristic of the original equipment manufacturers are ordering in small quantities and with short lead times, Value Added services and engineering support.
The Contract Manufacturer business, which produced circuit boards and industrial computer systems for OMEs. CMs tend to be very price sensitive. They selectively use our value-added services such as programming and supply chain management in addition to our quick delivery service. But they have no need engineering support.
External Environmental Forces
1. A/S’s relationship with Suppliers
The need of the suppliers from the distributors are win business for Standardized products and represent new technologies and propriety products. The role of intermediaries is to narrow the gap between suppliers and consumers, the distance between.
2. Competitors
Arrow’s closest competitor in 1996 was Avnet Inc., trailed it by more than 20% in sales. Of the next group of competitors the largest, which included foreign entrants Rabb Karcher and Future
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