Businessmodel of CDW

Customer Segments

CDW has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at organizations in the business, government, education, and healthcare sectors.

Value Proposition

CDW offers three primary value propositions: customization, performance, and brand/status.

The company enables customization through its operations. Its segmentation of its customers by industry category enables it to personalize its offerings and provide enhanced expertise in developing and implementing its information technology solutions for clients. It also operates channel-specific sales teams and service delivery teams with extensive knowledge of the markets they serve.

The company demonstrates strong performance through tangible results. One high-profile case example involves a client that approached the company for guidance on how to ensure it had the appropriate licenses for any software it ran. The client had received an audit from one of its software vendors, Microsoft, revealing a $10 million compliance gap. A CDW Account Executive recommended a software license optimization tool, which tracked and managed licenses from major software vendors. The client implemented the tool. Not long afterwards, Microsoft performed a follow-up audit, which showed a gap of just $3 million. The tool had saved the client $7 million in fees.

The company has established a powerful brand due to its success. It generated $12.9 billion in 2015. It has 8,600 employees who serve 250,000 customers in 150 countries worldwide. Its full suite of offerings includes over 100,000 products from more than 1,000 emerging and leading partner firms. These firms include APC, Apple, Cisco, Dell, EMC, Google, HP Enterprise, IBM, Lenovo, Microsoft, NetApp, Samsung, Symantec, and Vmware. Lastly, it has won many honors, including the following:

• 15 Partner of the Year awards from Cisco, including Global Commercial Partner of the Year
• Recognition as one of the Top Veteran-Friendly Companies by S. Veterans Magazine
• DialogTech’s Excellence in Digital Marketing and Optimization Award
• Recognition as one of the Best Places to Interview among large companies by Glassdoor
• The Torch Award for Marketplace Ethics from the Better Business Bureau ### Channels

CDW’s main channel is its direct sales team. It also sells products through vendor partners such as software publishers, original equipment manufacturers, and wholesale distributors. The company promotes its offerings through its website, social media pages, print/online/TV advertising, sponsorships, and participation in trade shows and conferences.

Customer Relationships

CDW’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website features a “Media Library” section that includes articles, case studies, data sheets, infographics, product reviews, reference guides, reports, videos, webinars, and white papers.

The site also features a section called “CDW Digital Experience” that includes technology insight guides and publications such as tech magazines. Despite this orientation, there is a personal assistance component in the form of phone and e-mail support from general customer service and assigned account managers.

Key Activities

CDW’s business model entails distributing IT products and delivering related services to its customers.

Key Partners

CDW’s key partners are the software publishers, original equipment manufacturers, and wholesale distributors that sell its products in order to expand its reach. It also partners with various tech firms to provide enhanced products and services for its customers; these firms include Apple, HP, Dell, Microsoft, and Lenovo.

Key Resources

CDW’s main resources are its human resources, who include the salespeople that promote and sell its offerings and the customer service personnel that provide support. It places a high priority on intellectual property, believing that its trademarks are important factors in its marketing programs.

Cost Structure

CDW 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

CDW has one revenue stream: revenues it generates from the sales of its products to its customers.