Arrow Electronics-Case Study

1. Discuss the relationship between Arrow and its suppliers? What is meant by design- wins and jump balls mentioned in the case? How are franchised distributors rewarded by suppliers?

Ans.

A/S AND SUPPLIERS

What suppliers want from distributors:

-Win business for Standardized products

-Represent New technologies - Propriety products

Financial incentives provided by supplier’s e.g.

-Price protection

-Limited return privileges

Distributors bring Suppliers closer to the customers

- Judge future projects

- Negotiates further discounts

o Jump balls

o Design wings

Relationship with supplier

Supplier end bargaining:

1) Order of names- Supplier List

2)Supplier`s order of giving out information

3) Time taken to responde to distributors price request

Distributor end bargaining

1)On standardized products by different

suppliers buy portfolio offering best margins

2. How does the Internet affect the salespeople of Arrow? Is the Internet a treat or opportunity for Arrow?

Non franchised distributors

1)Seen as not very legitimate

2)Hence warranties not provided

3)Reseller agreements lacking

Arrows website

Information provision

Fixed Costs

Purchase facility not online

Redirected to national 1-800 no.s

Arrow Electronics - Gaining New Business

RECOMMENDATION

The entrance of Express Parts in the electronics components distribution market threatens to abruptly change the flow of the channel operations that Arrow electronics is used to. Arrow is faced with a tough, time-constrained decision of making a choice – Should it incorporate Express in it’s distribution channel or not?

After a careful examination of the market dynamics that Arrow electronics operates under, it is my recommendation that Arrow Electronics take the following course of action

1. If possible, devise the Express Parts Internet distribution service for the market segment of X86 only and maintain the traditional Arrow style of distribution system for the...