Ingram Micro 2006 Annual Report Download - page 26

Fee-based supply chain services encompass the end-to-end functions of the supply chain, taking a product
from the point of concept through delivery to the customer. Suppliers choosing to sell direct present opportunities
for distributors to supply logistics, fulfillment, and marketing services, as well as third-party products in a fee-based
model. Similarly, retailers and Internet resellers seek fulfillment services, inventory management, reverse logistics,
and other supply chain services that do not necessarily require a traditional distribution model. In summary,
distributors continue to evolve their business models to meet customers’ needs (both suppliers and resellers)
through provision of fee-for-services programs while maintaining an efficient and low-cost means of delivery for
technology hardware, software, and services.
Company Strengths
We believe that the current technology industry environment generally favors large, financially sound
distributors that have large product portfolios, economies of scale, strong business partner relationships and wide
geographic reach. We deliver value to our partners by making reseller customers more valuable to their end-user
customers and suppliers more profitable. We have identified several catalysts for growth in our core business and in
new markets. We believe that the following strengths enable us to further enhance our leadership position in the IT
distribution industry, expand our leadership position in adjacent technology product categories and generate
sustainable, profitable growth.
•Global Market Reach and Scale. We are the largest IT distributor in the world, by net sales, and believe
that we are the market share leader, by net sales, in North America, Asia-Pacific, and Latin America and a
strong number two in Europe. Ingram Micro is the only global full-line distributor with operations in the
Asia-Pacific region. Our broad global footprint enables us to serve our resellers and suppliers with our
extensive sales and distribution network while mitigating the risks inherent in individual markets. Our global
market coverage provides a competitive advantage with suppliers looking for worldwide market penetration.
The scale and flexibility of our operations enables Ingram Micro to provide the infrastructure behind the
technology value chain in all its new and traditional forms.
We have local sales offices and/or Ingram Micro sales representatives in 35 countries, and sell our products
and services to resellers in more than 150 countries. We have local sales offices and/or Ingram Micro sales
representatives in North America (United States and Canada), Europe (Austria, Belgium, Denmark,
Finland, France, Germany, Hungary, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzer-
land, and United Kingdom), Asia-Pacific (Australia, Bangladesh, the People’s Republic of China including
Hong Kong, India, Indonesia, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka,
Thailand, and Vietnam), and Latin America (Argentina, Brazil, Chile, Mexico, and Peru). Additionally,
we serve many other markets where we do not have an in-country presence through our various export sales
offices, including our general telesales operations in various geographies.
As of December 30, 2006, we had 108 distribution centers worldwide. We offer more than 1,300 suppliers
access to a global customer base of more than 159,000 resellers of various categories including value-added
resellers (“VARs”), corporate resellers, direct marketers, retailers, Internet-based resellers, and government
and education resellers.
For a discussion of our geographic reporting segments, see “Item 8. Financial Statements and Supplemental
Data.” For a discussion of foreign exchange risks relating to our international operations, see “Item 7A.
Quantitative and Qualitative Disclosures about Market Risk.”
•Business Diversification. Our ability to execute on new initiatives and adapt to new business models
provides a competitive advantage by allowing us to overcome the risks and volatility of a single market,
vendor or product segment.
•Products. In addition to our extensive market reach, our broad base of products allows us to better serve
our customers, as well as mitigate risk. Our broad line card, or catalog of product offerings, makes us less
vulnerable to market dynamics or actions by any one vendor. Based on publicly available information, we
believe we offer the largest breadth of products in the IT industry. We continuously focus on refreshing our
business with new, high-potential products and services. We have expanded our focus on AIDC/POS with
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