Businessmodel of Avnet

Customer Segments

Avnet has a niche market business model, with a specialized customer segment. The company targets its offerings at original equipment manufacturers (OEMs), electronic manufacturing service providers, original design manufacturers (ODMs), value-added resellers (VARs), independent software vendors (ISVs), and systems integrators (SIs).

Value Proposition

Avnet offers two primary value propositions: risk reduction and brand/status.

The company reduces risk by maintaining high quality standards. Several of its global facilities have received third-party quality and environmental system certifications. These include ISO 9001, ISO 13485, AS9100, ISO 14001, and ANSI/ESD S20.20.

The company has established a strong brand as a result of its success. It is a Fortune 500 firm with revenues of $27.9 billion in 2015. It bills itself as the largest distributor of computer products and electronic components for industrial and military customers in North America. It has over 800 suppliers, over 100,000 customers in more than 115 countries, and ships over 30,000 line items daily. Lastly, it has won many honors, including a #4 ranking on the InformationWeek Elite 100 (2015),  recognition as “World’s Most Ethical Company” by Ethisphere Institute (2016), and one of* Fortune’s* “World’s Most Admired Companies” for the 10th year in a row (2016).

Channels

Avnet’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, forums, and conferences.

Customer Relationships

Avnet’s customer relationship is primarily of a self-service nature. Customers utilize its offerings while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Avnet’s business model entails distributing software and hardware to its customers. The company purchases its products in volume from suppliers and resells them to customers.

Key Partners

Avnet has the following types of partners:

IT Supplier Partners – Supply the products that Avnet sells to its customers. Specific partners include Cisco, EMC, Hewlett-Packard, IBM, Informatica, Intel, Juniper Networks, Micron, and Oracle.

Software Development Service Partners - Supply the software Avnet sells to its customers. Specific partners include Kentico, Microsoft, NCC Group, Oracle Fusion Middleware, Serena, and Sybase.

Business Service Management Partners – Supply the business intelligence and analytics solutions that Avnet sells to its customers. Specific partners include BMC Software, Bomgar, Hitachi ID, KANA, and xMatters.

Key Resources

Avnet’s main resources are its more than 50 centers (including data centers) and locations in over 34 countries. The company also depends on human resources in the form of sales/marketing staff that promote its offerings and customer service employees that provide support.

Cost Structure

Avnet has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Avnet has one revenue stream: revenues generated from the sale of the products and services it distributes to its customers. Sales staff must be contacted directly for pricing quotes.