Avnet 2008 Annual Report Download - page 10

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Table of Contents
the only supplier from which sales exceeded 10% of sales. Listed in the table below are the major product categories
and the Company’s approximate sales of each during the past three fiscal years:
As of June 28, 2008, the Company had more than 300 locations worldwide, as well as a limited number of
instances where Avnet-owned product is stored in customer facilities. Some of these locations contain sales,
warehousing and administrative functions for multiple sales and marketing units. Avnet sells to customers in more
than 70 countries.
Competition & Markets
Avnet is one of the world’
s largest industrial distributors, based on sales, of electronic components and computer
products.
The electronic components and computer products industries continue to be extremely competitive and are
subject to rapid technological advances. The Company’s major competitors include Arrow Electronics, Inc., Future
Electronics and World Peace Group. There are also certain smaller, specialized competitors who focus upon one
market, product or a particular sector. As a result of these factors, Avnet must remain competitive in its pricing of
goods and services.
Another key competitive factor in the electronic component and computer product distribution industry is the
need to carry a sufficient amount of inventory to meet rapid delivery requirements of customers. However, to
minimize its exposure related to valuation of inventory on hand, the majority of the Company’s products are
purchased pursuant to non-exclusive distributor agreements, which typically provide certain protections to the
Company for product obsolescence and price erosion in the form of rights of return and price protection.
Furthermore, these agreements are generally cancelable upon 30 to 180 days’ notice and, in most cases, provide for
inventory return privileges upon cancellation. In addition, the Company enhances its competitive position by offering
a variety of value-added services which entail the performance of services and/or processes tailored to individual
customer specifications and business needs such as point of use replenishment, testing, assembly, supply chain
management and materials management.
Another competitive advantage is the size of the supplier base. Because of the number of Avnet’s suppliers,
many customers can simplify their procurement process and make all of their required purchases from Avnet, rather
than purchasing from several different vendors.
Seasonality
Historically, Avnet’
s business has not been materially impacted by seasonality, with the exception of a relatively
minor impact on consolidated results from the growth in revenues in the Technology Solutions business during the
December and June quarters primarily driven by the fiscal year end of key suppliers.
Number of Employees
At June 28, 2008, Avnet had approximately 12,800 employees.
7
Years Ended
June 28,
June 30,
July 1,
2008
2007
2006
(Millions)
Semiconductors
$
9,561.2
$
9,176.4
$
8,896.3
Computer products
6,925.5
5,337.8
4,236.6
Connectors
713.9
571.3
547.9
Passives, electromechanical and other
752.1
595.6
572.8
$
17,952.7
$
15,681.1
$
14,253.6