Avnet 2000 Annual Report Download - page 7

CATALYSTS OF CHANGE
Globalization/ Industry Consolidation
Internet/ New Economy
Collaboration
Innovation/ New Value Propositions
People
Today, there are major forces of change at work in the global technology
marketspace. Their effects can be seen throughout Avnet, from the design of
the Company’s systems to the complement of its global workforce, from its
competitiveness and ability to create shareholder value to the very fabric of its
strategy. These forces are:
GLOBALIZATION
As customers and suppliers continue to globalize their operations, their need for
expanded and improved services increases. Global expansion through strategic
acquisitions has not only consolidated the electronics and computer distribution
industry, it has given Avnet the ability to meet those needs around the world.
INTERNET
The Internet radically alters market dynamics as the New Economy takes hold. It
is transforming how companies execute core business processes, how consumers
shop for and purchase goods and services, how value is created and distributed
within industries, and ultimately, how the global economy is structured.
COLLABORATION
Trends in outsourcing and the migration from linear supply chains to multi-direc-
tional value webs that the Internet has fostered are prompting novel
collaborative relationships.
INNOVATION
Innovation is driving the creation of new value propositions such as Avnet’s
newest operating group, Applied Computing. The best way to lead in new
markets is to create them. Innovation is propelling the adoption of sophisticated
information technology systems like SAP, and intensifying the focus of the
Company’s attention on shareholder concerns like return on capital employed
and earnings per share.
PEOPLE
Avnet achieved $1 million in sales per employee for the fourth quarter of FY’00,
a testament to the high productivity, efficiency and skill of its talented and
diverse global workforce. The Company strives to attract, retain and continuously
develop highly skilled people, and actively seeks innovative ways to do so.
People are Avnet’s most important attribute and its biggest differentiator.
Just a decade ago, Avnet was strictly a North
American enterprise. As the Company’s suppliers and
customers began to globalize their own operations, their need for
expanded and improved services increased. Avnet soon followed
suit to ensure it could meet their needs. Ten years and almost 40 acquisitions
later – along with a healthy organic growth rate – Avnet now serves more than
100,000 customers in more than 60 countries from more than 250 locations
around the world.
ACQUISITIONS
Fiscal 2000 saw the completion of seven acquisitions, including the largest in
the history of the electronics distribution industry, Marshall Industries. These
acquisitions contributed more than $1.7 billion in sales for FY’00. They
expand ed the reach of all three operating groups and strengthened Avnet’s
value propositions in the Americas, Asia and EMEA (Europe, the Middle East and
Africa) faster than would have been possible through organic initiatives alone.
MARKET LEADERSHIP
Business is migrating to the most efficient providers of goods and services.
As Avnet continues to acquire companies that support its vision, the
Company plays an important role as industry consolidator, with market
leadership a natural result.
With sales of $6.6 billion, Avnet Electronics Marketing is the largest value-
added distributor of electronic components in North America and has advanced
to a strong number two position in Europe. The pending acquisitions of EBV
Elektronik, WBC, Atlas Services and Raab Karcher Electronic Systems in
Europe, announced on August 7, 2000, stand to strengthen that position even
further. The acquisition of Savoir Technology Group, Inc. in the United States
just after the fiscal year ended also positioned the Company the number one
value-added distributor of IBM mid-range computing products globally.
By carefully choosing companies and strategies that add to Avnet’s value
propositions, the Company realizes key benefits – a broader customer base, an
extensive line card with an unparalleled depth of inventory, expanded value-
added service offerings, the knowledge of talented employees, and world-class
information technology capabilities.
FY’00 ACQUISITIONS
Cosco Electronics/ Jung Kwang (Korea)
Eurotronics (SEI) (Netherlands)
Matica S.p.A/ PCD Italia S.r.l. (Italy)
Marshall Industries/ Sterling Electronics (US)
SEI Macro Group (UK)
Integrand Solutions (Australia)
SEI Nordstar (Italy)
11
INDUSTRY CONSOLIDATION
GLOBALIZATION