Avnet 2015 Annual Report Download - page 7

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TableofContents
Major Products
OneofAvnet’scompetitivestrengthsisthebreadthandqualityofthesupplierswhoseproductsitdistributes.IBMproducts
accounted for approximately 11%, 11% and 13% of the Company’s consolidated billings during fiscal 2016, 2015 and 2014,
respectively,andwastheonlysupplierfromwhichbillingsofitsproducts,softwareandservicesexceeded10%ofconsolidated
billings.ListedinthetablebelowarethemajorproductcategoriesandtheCompany’sapproximatesalesofeachduringthepast
threefiscalyears.Fiscal2016contained53weekscomparedto52weeksintheotherfiscalyearspresented.
Years Ended
July 2,  June 27, June 28,
2016 2015 2014
(Millions)
Semiconductors  $ 14,654.0  $ 15,715.8  $ 14,558.4
Computerproducts,softwareandservices 9,025.6  9,614.2  10,571.6
Connectors,passives,electromechanicalandother  2,539.7 2,594.7 2,369.7
Sales $ 26,219.3 $ 27,924.7 $ 27,499.7
Competition & Markets
The electronic components and IT solutions 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,and,toa lesserextent,IngramMicro, Inc.andTech DataCorp.Thereare alsocertainsmaller,specialized competitors
whogenerallyfocusonnarrowerregions,markets,productsorparticularsectors.Inaddition,theCompanymaycompetewithits
own suppliers that maintain a direct salesforce. As a result of these factors, Avnet must remain competitive in its pricing of
productsandservices.
AkeycompetitivefactorintheelectroniccomponentandITsolutionsdistributionindustryistheneedtocarryasufficient
amountofinventorytomeetcustomers’rapiddeliveryrequirements.Tominimizeitsexposurerelatedtoinventoryonhand,the
majority of the Company’s products are purchased pursuant to non-exclusive distributor agreements, which typically provide
certainprotectionsforproductobsolescenceandpriceerosion.Theseagreementsaregenerallycancelableupon30to180days’
noticeand,inmostcases,providefororrequire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customer
supporttailoredtoindividualcustomerspecificationsandbusinessneedssuchaspointofusereplenishment,testing,assembly,
supply chain management and materials management. For the last three fiscal years ended July 2, 2016, sales of services
constitutedlessthan10%oftheCompany’stotalsales.
Acompetitiveadvantage is the breadth ofthe Company’ssupplier productline card.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salesattheTSbusinessduringtheDecemberquarterprimarilydrivenbythe
calendaryearendsellingandbuyingpatternsofkeysuppliersandcustomers,respectively.
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