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Arrow Electronics SWOT & PESTLE Analysis

ID : 52367053| Mar 2018

COMPANY PROFILE -Arrow Electronics

Business Sector :Consumer Electronics

Operating Geography :North America

About Arrow Electronics :

Started in 1935, Arrow Electronics is among the fortune 150 companies (Rank 119) and is a worldwide provider of products, specialized services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. It is headquartered in Melville, New York and employs 18700 people worldwide in more than 465 locations in over 90 countries as of 2018. Arrow specializes in distribution and value- added services relating to electronic components and computer products and serves around 900 suppliers and 125,000 OEMs, contract manufacturers and commercial customers. Its vision is to be a premier electronics Company in the world. Its mission is to strive for sustainable solutions and maximizing waste utilization in offices, facilities and distribution centres.

Arrow Electronics Revenue :

US$26.81 billion - FY ending Dec 2017 (year on year growth of 13%)

Competitive Analysis of Arrow Electronics

SWOT
PESTLE
The SWOT analysis for Arrow Electronics is presented below:
Strengths
Weaknesses
1. One of the widest varieties of products, services and solutions.
2. Extraordinary performance upon entering new markets
3. Continuous improvement through employee training and automation
4. Earned excellent reputation through high levels of customer satisfaction
1. Unclear USP and positioning of products
2. Supply of innovative products is limited and not comparable to competitors
Opportunities
Threats
1. Focus on increasing sales in Asia for Components and America for ECS
2. Strengthening its focus on inorganic growth
3. Huge investments due to stable free cash flows.
1. Loss of small market share due to competitive new entrants
2. Seasonal Demand of major products
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Detailed SWOT Analysis of Arrow Electronics

 

Strength

1. One of the widest variety of products, services and solutions: Arrow provides superior value to its industrial and commercial customers by providing a huge variety of products, solution and services. Arrow is a provider of technology solutions to a wide variety of markets like the telecom industry, the IS (Information System), transportation, medical and healthcare business, the electronics industry- both industrial as well as consumer. Arrow is also a huge provider of services namely new product design services and design support, materials planning, inventory management, assembly services and reverse logistics, programming, electronics asset disposition (EAD) and a number of online supply chain tools.

2. Extraordinary performance upon entering new markets: Arrow electronics has expertise in the art of entering new markets with its strong and stable free cash flows, sufficient resources and superb ‘Go To Market’ strategy and creating success stories by generating more revenues from diversified sources and lowering the economic cycle risk in the operating markets eg. while penetration in the UK market Arrow joined Voltaire’s ‘adVantage Partner program’. Arrow ECS has ‘Net-New Market Penetration Program’ launched back in 2012 which selects the qualified solution providers and provides market funding to ramp up sales and help capturing new markets.

3. Continuous improvement through employee training and automation: Arrow is one of the few companies in the segment which is famous for skilled as well as highly motivated workforce. Over the years it has spend tremendously in the training and development of the employees through various round the year learning programs aimed at emerging technologies like cloud, security, data analytics and mobility and was amongst top 20 IT training companies for second consecutive year by Training Industry.com. Not only this because of mass scale automation of operating activities, the quality of the Arrow Electronics products have become more consistent and the company can easily respond by scaling up or down as per the market demand of products which are generally cyclical in nature.

4. Earned excellent reputation through high levels of customer satisfaction: Arrow electronics is among the most reputed electronics companies in the United States. This reputation has been built up over the years because of exceptionally dedicated CRM department which not only cares about high levels of customer satisfaction for the existing customers but also maintains good brand equity among the potential future customers. Arrow is known for “connecting customers to the right technology at the right place at the right time and at the right price” by providing specialised services across product lifecycle.

Weakness

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Opportunity

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Threat

1. Loss of small market share due to competitive new entrants: Stable profitability in the segment has invited intense competition especially over the last two-three years. With the increasing number of players there is a downward pressure on sales because the competitors are paying higher margins to the local distributors. Moreover, Arrow electronics has lost small market share in niche categories and this may prove to be signs of danger in upcoming future. Thus, it is high time to strengthen internal feedback mechanism connecting directly from ground sales team.

2. Seasonal demand of major products: The demand of Arrow’s most profitable products is seasonal and hence majority sales of company are cyclical with marked periods of boom and slump. Any undesirable and unlikely event occurring during the peak demand season can have adverse impacts on the profits of the company in short to medium terms.

References

Business Wire , August 25, 2017 : https://finance.yahoo.com/news/arrow-electronics-helps-create-better-182600624.html

Arrow Investors Relations: CFO Commentory 2017: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Njg3NzMyfENoaWxkSUQ9Mzk3OTkxfFR5cGU9MQ==&t=1

Arrow Research and events: https://www.arrow.com/en/research-and-events

Greg Avery, American City Business Journals •February 8, 2018: https://finance.yahoo.com/m/677f730e-bffe-37d0-88a8-e121c95a8df9/arrow-electronics-posts.html

Business wire: 6 feb 2018:Arrow Electronics Reports Fourth-Quarter and Year-End 2017 Results: https://www.businesswire.com/news/home/20180206005402/en/Arrow-Electronics-Reports-Fourth-Quarter-Year-End-2017-Results

Electronics components manufacturing in India: 2017 ElectronicsB2B.com: http://www.electronicsb2b.com/industry-buzz/electronic-components-manufacturing-in-india-poised-for-growth/

Moody's rates Arrow Electronics' new notes at Baa3, outlook is stable,June 01, 2017: https://www.moodys.com/research/Moodys-rates-Arrow-Electronics-new-notes-at-Baa3-outlook-is--PR_367632

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Arrow Electronics SWOT and PESTLE analysis has been conducted by Farheen Rahman and reviewed by senior analysts from Barakaat Consulting.

Copyright of Arrow Electronics SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

Arrow Electronics SWOT & PESTLE Analysis
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