Avnet 2015 Annual Report Download - page 7
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TableofContents
Major Products
OneofAvnet’scompetitivestrengthsisthebreadthandqualityofthesupplierswhoseproductsitdistributes.IBMproducts
accounted for approximately 11%, 11% and 13% of the Company’s consolidated billings during fiscal 2016, 2015 and 2014,
respectively,andwastheonlysupplierfromwhichbillingsofitsproducts,softwareandservicesexceeded10%ofconsolidated
billings.ListedinthetablebelowarethemajorproductcategoriesandtheCompany’sapproximatesalesofeachduringthepast
threefiscalyears.Fiscal2016contained53weekscomparedto52weeksintheotherfiscalyearspresented.
Years Ended
July 2, June 27, June 28,
2016 2015 2014
(Millions)
Semiconductors $ 14,654.0 $ 15,715.8 $ 14,558.4
Computerproducts,softwareandservices 9,025.6 9,614.2 10,571.6
Connectors,passives,electromechanicalandother 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
technologicaladvances.TheCompany’smajorcompetitorsincludeArrowElectronics,Inc.,FutureElectronicsandWorldPeace
Group,and,toa lesserextent,IngramMicro, Inc.andTech DataCorp.Thereare alsocertainsmaller,specialized competitors
whogenerallyfocusonnarrowerregions,markets,productsorparticularsectors.Inaddition,theCompanymaycompetewithits
own suppliers that maintain a direct salesforce. As a result of these factors, Avnet must remain competitive in its pricing of
productsandservices.
AkeycompetitivefactorintheelectroniccomponentandITsolutionsdistributionindustryistheneedtocarryasufficient
amountofinventorytomeetcustomers’rapiddeliveryrequirements.Tominimizeitsexposurerelatedtoinventoryonhand,the
majority of the Company’s products are purchased pursuant to non-exclusive distributor agreements, which typically provide
certainprotectionsforproductobsolescenceandpriceerosion.Theseagreementsaregenerallycancelableupon30to180days’
noticeand,inmostcases,providefororrequireinventoryreturnprivilegesuponcancellation.Inaddition,theCompanyenhances
itscompetitivepositionbyofferingavarietyofvalue-addedservices,whichentailtheperformanceofservicesand/orcustomer
supporttailoredtoindividualcustomerspecificationsandbusinessneedssuchaspointofusereplenishment,testing,assembly,
supply chain management and materials management. For the last three fiscal years ended July 2, 2016, sales of services
constitutedlessthan10%oftheCompany’stotalsales.
Acompetitiveadvantage is the breadth ofthe Company’ssupplier productline card.Because ofthe numberof Avnet’s
suppliers,many customers cansimplifytheirprocurement process andmakealloftheir requiredpurchasesfromAvnet,rather
thanpurchasingfromseveraldifferentvendors.
Seasonality
Historically, Avnet’s business has not been materially impacted by seasonality, with the exception of a relatively minor
impactonconsolidatedresultsfromthegrowthinsalesattheTSbusinessduringtheDecemberquarterprimarilydrivenbythe
calendaryearendsellingandbuyingpatternsofkeysuppliersandcustomers,respectively.
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