Synnex Case
Problem/Issue
Opportunities for future expansion into foreign nations, unrelated industries and possible other business formats.
Situational Analysis
Synnex became a full range channel management company covering inventory controls, sales, distribution, transportation and after-sales services
Operations of synnex were divided into three areas: products, channels, and logistics.
The company represented 300 brands that covered more than 7000 items in four categories.
Distribution of IT products is split into two chains, supply and demand. There were companies that outsourced parts and components from suppliers on the one hand and sold final products to customers on the other. The categories were not mutually exclusive.
The supply side of the chain handled two types of products, parts/components and system products.
The demand side of the distribution chain carries mostly computer peripherals and consumer electronics purchased by individual end users.
Many distributers carried a single product and possessed little bargaining power vis a vis their vendors.
The role of distributors on the supply side was often difficult, they faced big hardware and software manufacturers such as Intel and Microsoft. This big name vendors possessed strong bargaining power and very much dictated the terms of the distribution relationship.
Most high-tech companies put more effort into R&D than into distribution.
Synnex used 3 unconventional methods, a broad client base, no push for volume sales, no reimbursements for unsold stock. They bundle products from multiple vendors so that they would be the one stop shop.