Case Analysis: Arrow Electronics, Inc.
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 …show more content…
1. Express could quickly cross-reference equivalent parts from multiple manufacturers based either on part number or technical description and they have more than 50,000 customers market share in the US.
2. Because A/S have the stable suppliers, so they can easier control the costs than other competitors.
The product prices have more competitive in the Express system.
3. The Express provide the shipping services could reduce the costs of Arrow.
1. The fee for the Express is 6% of sales. It makes the distributors margin became lower. So the Arrow must increase the price of the products to keep the balance, however, to do so may lose some market share.
2. A/S’s current customers will get the lowest price from the Express system and use it as a starting point to bargain with A/S.
3. Maybe numbers of customers do not want to make a change to switch their purchases system.
Option two: not accept the Express’s proposal.
1. Arrow could easily control the price of their goods.
2. Arrow could use their own internet services, avoid the wasted of the development costs of the system before.
3. Arrow could consolidate the existing customer base.
1. Arrow will Lose a lot of opportunities to develop new customers.
2. Not have timely access competitor information.
3. Even though Arrow not use the