Arrow Electronics Essay Example | Topics and Well Written Essays - 1500 words

Arrow Electronics - Essay Example Zeus to military and aerospace customers, wile, A/S & Anthem to industrial customers. The two other groups were product driven and they are Gates/Arrow distributing and selling primary computer systems, peripherals and software, Capstone electronics passive components. In all the groups Arrow/Schweber (A/S), the largest of Arrow's working groups having higher levels of technological expertise through technical certification of its field sales representatives (FSR). A/S operations were configured by branch, headed by General Manager includes Field sales and inside sales representatives, products managers, field application engineers and others. Overall six VP's oversaw A/S's 39 branch mangers. Arrow electronics was a broad line distribution of electronic parts including semiconductor and passive components, under the leadership of Stephen Kaufman and reached the number one position among electronics distributors by 1992. Most of the distribution companies' worldwide passing through co nsolidation phase and small number of large companies capturing the top tier of the markets by 1997. Arrow's nearest competitors in 1996 is Avnet Inc. having sales around 20% less than Arrow during the year. Other competitors of Arrow, are Future electronics, Pioneer standard, Wyle and Marshall Industries and all have only quarter size of Arrow in total sales volume and earned less than Arrow's largest operating group. Arrow is making profit and earned more than $6.5 billion in sales in 1996. This situation shows Arrow position is very strong in the market having only one genuine competitor Avnet Inc. Creating more value. Basically distributors like Arrow's relationship and dependence with suppliers are vice-versa where both depend on each other. In an electronic industry where top 10 suppliers controls 80% of products, A/S's suppliers list included 56 companies in 1997 and growing. This shows that A/S is not solely dependent on top suppliers or selected few suppliers but effective management of large number of suppliers is not an easy job and requires better networking which incurs high cost. A/S's largest supplier Altera, the manufacturer of proprietary programmable logic device (PLD's) supplies 80% of its products through two distributors capable of providing value added programming required by individual customers. Large suppliers like Intel, Taxes instruments and Motorola are the other 3 of the big four suppliers for the A/S. Now before analyzing A/S on the basis of value provider, we should first understand what is value chain and how it work What is value: The value chain is a system of interdependent rather than independent activities. The way one activity is performed usually has an impact on the way other activities and undertaken. The ability to coordinate the linkages enhances the scope of cutting costs or increasing differentiation. The first step is to identify all the value chain activities that are relevant to the business. The value chain must be defined broadly enough to include all the activities that influence profitability. Once companies like Arrow's identifies how profits are distributed across the industry value chain, it has a better idea of how to reconstruct the value chain to improve performance. Indeed new business models emerge by virtue of their superior ability to create and deliver value. A company can create a stronger competitive position for itself on the value chain by addressing important issues like: How value is being captured; The gap