Ingram Micro 2008 Annual Report Download - page 15

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end-user demand. This information flow enables our superior execution and our ability to provide favorable
order fill rates to our customers around the world while optimizing our investment in working capital. In the
U.S. and Canada, we host channel communities covering more than 7,000 customers. Included among our
communities are Venture Tech Network and SMB Alliance, both of which provide networking opportunities,
tools and support to build the reseller’s business. We host communities to address the needs of resellers
focused on the government sector (GovEd Alliance) and system builders (System ArchiTECHs). Our
community members have access to an on-line peer-to-peer networking site to identify potential partners and
share best practices. The networking site, The Zone, is offered in customized versions specific to each
community. Through our data analytics capabilities we are able to leverage our extensive database to provide
valuable data for our vendors in North America.
Our commitment to a customer-centric focus has been widely recognized throughout the IT industry, as
evidenced by a number of awards received by Ingram Micro over the past year. In 2008, Ingram Micro
ranked within the top three in Fortune Magazine’s 2008 list of “Most Admired Companies” in the
Electronics and Office Equipment Wholesalers category. Solution providers attending the 2008 Computing
Technology Industry Association’s Breakaway conference selected Ingram Micro for its “Best Distribution
and Support” award for the second year in a row. Australia Reseller News chose Ingram Micro for both the
Hardware Distributor of the Year and the Channel Choice Distributor of the Year. Our vendors have
recognized our efforts, as well. For example, CA named Ingram Micro its North American Distributor of the
Year. Cherry Electrical Products recognized our DC/POS Division in North America as its top distributor for
2007 (awarded in April 2008) and our Nordics DC/POS operation was acknowledged by Zebra as its
Nordics Partner of the Year for 2008. Our operations in the Netherlands, Germany, Norway, New Zealand
and Brazil earned top honors from vendors during 2008.
Customers
Our reseller customers are distinguished by the end-user market they serve, such as large corporate accounts,
mid-market, SMBs, or home users, and by the level of value they add to the basic products they sell. They include
VARs, corporate resellers, retailers, systems integrators, direct marketers, Internet-based resellers, independent
dealers, reseller purchasing associations, and PC assemblers. Many of our reseller customers are heavily dependent
on distribution partners with the necessary systems, capital, inventory availability, and distribution facilities in place
to provide fulfillment and other services.
We conduct business with most of the leading resellers of IT products and services around the world. Our
continued expansion in adjacent markets, such as AIDC/POS, has generated opportunities to expand sales in our
current customer reseller base, as well as add new reseller customers. In most cases we conduct business under
general terms and conditions, without purchase requirements. We also have resale contracts with our reseller
customers that are terminable at will after a reasonable notice period and have no minimum purchase requirements.
In addition, we also have specific agreements in place with certain manufacturers and resellers in which we will
provide supply chain management services such as order management, technical support, call center services,
logistics management, configuration management, and procurement management services. Under these agreements
either party can terminate them without cause following reasonable notice. The service offerings we provide to our
customers are discussed further below under “Services.” Our business is not substantially dependent on any of these
distribution or supply chain services contracts. No single customer accounts for more than 10% of our total revenue.
Sales and Marketing
We employ sales representatives worldwide who assist resellers with product and solution specifications,
system configuration, new product/service introductions, pricing, and availability.
Our product management and marketing groups create demand for our suppliers’ products and services, enable
the launch of new products, and facilitate customer contact. Our marketing programs are tailored to meet specific
supplier and reseller customer needs. These needs are met through a wide offering of services by our in-house
marketing organizations, including advertising, direct mail campaigns, market research, on-line marketing, retail
programs, sales promotions, training, solutions marketing, and assistance with trade shows and other events. We
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