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Marketing Management Class - Group 7 M Farhan Lucky [11P2156] Meidi Indah Nurmiati [11P2158] Lingga Wardhana [11P2155]
History Of SYNNEX
In 1985 separated from MiTAC as an independent firm, Micro Electronics Corp Distributed mainly computer parts and components Started in 1975 as division of MiTAC 1 of 2 pioneer in PC makers (besides Acer)
In 2007, sales close to US$ 6 billion & became third largest electronic product distributor worldwide
Business Issues
Distribution rights is not secure and could be forfeited at any time without warning Little bargaining power vis-vis their vendor Mass exodus manufactures to China lead to intensive market competition and driven retail prices down quickly
Facts we know : high volume sales helped distributors reduce frequency delivery & lower the service cost No reimbursement for unsold stock, manufactures allowed distributors to reimburse retailers the loss of unsold stock caused by pricing changes in the retail market. Synnex decided to discard this practice
Problem Solving
How to keep its business profitable ? Synnex could boost the efficiency of serving small retailers by bundling multiple items in one shipment. Action 1. Positioned itself as a one-stop distributor for small clients. Increase number of vendors from 28 (1992) to 300 (2008). Also increasing number of items distributed from less than 1000 to 7000. Action 2. Tighter control over the shipping process by established a fleet of trucks that numbered in hundreds. Kept shipping errors at or below 0.004 % Action 3. Build logistics centre to handle all aspects of inventory management, such as unpacking, repacking, assorting, shipping and so on.
Telephone Sales. To reduce cost many firms replace personal sales with telepohone sales. But many attempts failed because face to face business dealings important in some area.
Synnex quickly figured out that the key to the success of telephone sales lay in an information system that made customer data available to any telemarketer who answered the phone call.
Service Differentiation
With its advanced logistics systems, Synnex required less than 30 minutes to repair broken item from retail outlet
2000. Offering an additional year of quality asurance on top of original manufacturer warranty 1997. Attached a service label to the products that it distributed
Selected some retail outlets as partner stores to push service quality and increased consumer exposure
International Expansion
How to replicated in foreign markets ? 141 cities 16 nations Step 1. Implement MIS in the foreign subsidiary Step 2. Build logistics centre after business volume grew and local knowledge in the host contry accumulated Merger with local distribution company
16 ,000 outlets
1997. Acquired an electronic products distributor in Hong Kong (covered China Market), and also distribution company in the United States (covered Canada and Mexico) 2004. Took partial stake (36.3 %) in an Indian distibutor called Redington that also operated in several Arab and African markets
Thank You