Businessmodel of Synnex

Customer Segments

Synnex has a niche market business model, with a specialized customer segment.

• The company’s Technology Solutions unit distributes its products to system integrators, resellers, and retailers.
• Its Concentrix unit targets its offerings at enterprises in 10 industries: automotive, consumer electronics, banking/financial services, government/public sector, insurance, healthcare/pharmaceuticals, media/communications, travel transportation/tourism, retail/eCommerce, and technology. ### Value Proposition

Synnex offers three primary value propositions: accessibility, convenience, and brand/status.

The company creates accessibility by offering a wide variety of options. It distributes over 30,000 technology products from over 300 IT, consumer electronics, and OEM suppliers. It has acquired many firms over the years, enabling it to expand its selection. For example, in July 2016 it acquired Minacs and integrated its operations into Concentrix, strengthening its automotive sector expertise.

The company offers convenience by supporting its products with related business process services. It offers its buyers customer management, web hosting, software development, hosted software, back office processing, and domain name registration. These services help save time and costs.

The company has established a powerful brand as a result of its success. It serves more than 20,000 resellers (corporate, government, and value-added), retailers, and system integrators throughout the U.S., Canada, and Japan. It maintains operations in 26 countries and has over 70,000 employees with fluency in more than 40 languages. Lastly, it has won many honors, including the Operational Excellence Award from HSN for five years in a row, placement on the Top 100 List of Best Outsourcing Providers by IAOP (2016), and the National Quality Award from Golden Peacock (2016).

Channels

Synnex’s main channels are its direct sales force, which includes regional sales teams, and its business development/product management specialists, who sell solutions for specific end-market verticals.

The company promotes its offering through its website, social media pages, and a roadshow series called “Secret Sauce” at which it gives presentations in different locations that introduce customers to new solutions and services and provide marketing advice.

Customer Relationships

Synnex’s customer relationship is primarily of a self-service nature. Customers utilize its solutions while having limited interaction with employees.

That said, there is a personal assistance component in the form of phone, e-mail, and online chat support.

Key Activities

Synnex’s business model entails distributing third-party products to its customers as well as developing and manufacturing its own products.

Key Partners

Synnex relies on over 300 suppliers for its products; they include software, IT systems, peripherals, system components, consumer electronics, and networking equipment manufacturers.

Its main suppliers are HP, Intel Corporation, Asus Tek Computer, Lenovo Group, Lexmark International, Microsoft Corporation, Samsung Electronics, Panasonic Corporation, Xerox Corporation, Seagate Technologies, and Hewlett-Packard Enterprise Company. HP is the largest supplier, accounting for 25% of its revenues in 2015. Synnex signs non-exclusive distribution agreements with the firms.

Key Resources

Synnex’s main resources are its physical resources. Its Technology Solutions segment operates 40 distribution and administrative facilities in the U.S., Canada, China, Japan, and Mexico. Its Concentrix segment operates 90 delivery centers and administrative facilities in North and South America, Europe, and the Asia-Pacific.

The company depends on its sales personnel to distribute products. Lastly, its manufacturing is conducted in assembly plants in California, Tennessee, and the UK.

Cost Structure

Synnex has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of products, a variable expense. Other major drivers are cost of services, a variable cost, and sales/administration expenses, a fixed cost.

Revenue Streams

Synnex has two revenue streams: revenues generated from the sale of products and services.