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Arrow Electronics: Case Study: Arrow Electronics

875 Words4 Pages

1. Arrow Electronics is an electronic parts distributor, counting semiconductors and passive components. Its customer base is divided into 2 categories: • Transactional customers (25% of the sales), those that place requests for quotes with a number of distributors synchronously, and • Relational (75% of the business), those that distributors use value added products to build long-term relationship with. Given the fact that most of relationship customers started out as transactional, it is of great importance for Arrow to convert at least half of them into relational in the long future. To achieve that, Arrows sale force build relationship with its customers by offering them a chance to interact with them in order to be able to understand the benefits of doing business with Arrow rather than anyone else. In other words, since value added services help Arrow maintain profit, it is of crucial importance to develop and continue long term relationship with the right customers and help them in their times of need. This unbreakable connection establishes mutual communication and gets customers to invest in the supply chain which provides value-added services. As a result, these customers are committed and unlikely to terminate the relationship with the company. …show more content…

In general, electronic component manufacturers such as Intel and Motorola deal directly with large original equipment manufacturers (OEMs) (70% of their sales). When sales size is tiny and service requirements are extended, suppliers franchise distributors such as Arrow Electronics to sale to the remaining customers that they could not serve directly. Intel and Motorola are not interested in providing costumers technical support and material management, since it is not profitable for them; so it became distributors’ service and gained these

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