Farnell Case Study: Distributor Acquires CAD Company

Date: December 21, 2011
Pages: 18
Price:
US$ 495.00
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Publisher: MarketLine
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: FBEEAF019D0EN
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Farnell Case Study: Distributor Acquires CAD Company
Introduction

Premier Farnell (Farnell) is a leading distributor of electrical and electronic components. In 2009, it acquired CadSoft, a publisher of computer-aided design (CAD) software. While sales of CadSoft products will in themselves contribute only a small amount to Farnell's revenues, the acquisition shows how Farnell and its rivals are competing on service as well as price.

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Highlights

Farnell is a leading high service technology distribution company, offering customers a wide range of electronic parts, with rapid order turnaround and no minimum purchase requirements.

Since 2006, Farnell has pursued a three-element strategy: to focus on electronic design engineer customers, extend its e-commerce activities, and expand its business in geographic growth markets such as Asia-Pacific.

Your key questions answered
  • What is a high service distributor?
  • How has Farnell grown its business since 2006?
  • Why did Farnell acquire a software publishing company?
OVERVIEW

Catalyst
Summary

ANALYSIS

Farnell is a leading high service technology distribution company
  High service distribution involves rapid delivery of orders, many of which are for small quantities
  High service distribution accounts for 9% of the total electronics distribution market
Since 2006, Farnell has pursued a three-element strategy
  Strategic element 1: focus on EDE customers
  Strategic element 2: develop e-commerce
  Strategic element 3: build international business especially in Asia-Pacific
Farnell's strategy looks to be enhancing profitability
  Farnell's revenues have been more stable than the semiconductor market and the EMS market
  Electrocomponents showed similar 2001-2011 revenue growth, but weaker profit growth, than Farnell

CONCLUSIONS

Farnell's three-part strategy is leading to strong performance

APPENDIX

Definitions
Methodology
Further reading
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