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Arrow Electronic, Inc Case Fact: 1. 2. 3. 4. 5. 6. Arrow Schweber (A/S) is subsidiary of Arrow Electronic.

Express Parts, Inc offer AS an Internet Distribution System. Steve Kaufman is the CEO from Arrow Electronic Inc. Jan Salsgiver is the President of A/S. Skip Streber is the SVP of Sales of A/S. Internet Distribution System that Express propose is an Internet based trading system that would enable Distributor to post inventories and price to Bulletin Board. 7. This system will give large or small customer an opportunity for shop for prices. 8. This new ability will open an opportunity to get new customer easily. 9. A/S relationship with current customer could be affected because of implementing this new system. 10. A/S customer could be considered to remove A/S from their distribution channel if they find Express with their new system is more convenient. 11. 1. How to create value for customer for the price we charge them? 12. 2. How we could add value added that is different from Supplier could offer Customer directly? 13. How many A/S customers will switch to Express? 14. How big this is could effect to A/S sales and profitability? 15. How would A/S suppliers will react to express? 16. Is Express a threat or opportunity? 17. Suppliers are manufacturer of Semiconductor and Electronic Component. 18. It is common that Suppliers sell directly their product to OEM. 19. Sales for OEM for Supplier could reach 65-75% of their total sales. 20. Supplier let Distributor to taking care the rest. 21. They franchised Distributor to manage sales for the remaining customer that they can not serve directly. 22. The reason that they can not serve is because of small sales size and the service requirement. 23. Express Parts: - a new independent distributor that developed an internet based trading system around a multi distributor bulletin board. - Positive: Their search engine could quickly cross reference equivalent parts from multiple manufacturers. More than 50,000 OEMs throughout the US will have access to the services. That access would enable A/S to increase sales at less than half the cost of doing so via its branch network. - Proposed A/S: full list of available inventory (belongs to A/S) combined with similar list from other distributor. Expresss customers would sign to its services via internet and search by part number or description. A Customer could select any supplier/distributor combination, enter the quantity, place order. Express would review the order, perform a credit check, and route them to the appropriate distributor. Distributors

would (on behalf of Express), pick parts and drop ships order directly to customers.

Benefit Join Express : 1. Exchange database = getting potential new customers with less effort. Potential for higher sales/revenue 2. New Customer meaning to expand sales thru totally new distribution channel. 3. Saving cost for testing the new distribution channel thru accepting Express offer : - Infrastructure/system cost - Risk Cost - HR Cost - Maintenance cost - Entertainment cost - Traveling cost 3. Saving time to negotiate with customer

Weakness/Threat 1. Expose data to other distributors could open the Pandora box. They could aware of our capital, inventory strategy and supplier relationship. 2. Actually Express is competitor. Joining them could makes Express more famous as the portal in finding product. They could have benefit of being famous as the number one reference in finding the product. Format: 1. Summary Business Model 2. Reason (since Express is not presenting their offer to us yet, we do the assuming for their offering) 3. Recommendation (To accept of to refuse their offering) 4. The explanation for the recommendation.

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