Ingram Micro 2008 Annual Report Download - page 12

services. We will continue to evolve our business model to meet the changing requirements of our customers (both
suppliers and resellers).
Company Strengths
Despite the global economic downturn that is dampening demand in each of the company’s regions, we believe
that the current technology industry generally favors large, financially-sound distributors that have broad product
portfolios, economies of scale, strong business partner relationships and wide geographic reach. Two-tier distri-
bution continues to be an integral element of the go-to-market strategy for IT suppliers bringing products to market,
particularly in an environment in which suppliers are compelled to streamline processes and eliminate costs. We
deliver value to our partners by making reseller customers more valuable to their end-user customers and making
suppliers more profitable. As such, our strengths position us well to meet the needs of our reseller and vendor
partners worldwide in the current environment and create a firm foundation for future growth as the economy
recovers. Our solid financial position helps us to better manage the challenges presented by economic instability
and volatility. We have identified several catalysts for growth in our IT distribution businessand in new markets. We
believe that the following strengths enable us to further enhance our leadership position in the IT distribution
industry and in adjacent technology product categories.
•Strong Working Capital Management and a Solid Financial Position. We have consistently demon-
strated strong working capital management regardless of economic conditions. In particular, we have
maintained a strong focus on optimizing our investment in inventory, while preserving customer fill rates
and service levels. We have maintained our inventory days on hand at a stable range for the last seven years
as a result of our focused and sustainable initiatives towards minimizing excess and obsolete goods while
improving our purchasing processes and product flow. Furthermore, we continue to manage our accounts
receivable through timely collections, credit limit setting, customer terms and process efficiencies to
minimize our working capital requirements. Our conservative stance on capital management, as well as our
diversified portfolio of capital resources, improves our position in the tighter credit markets. Our financial
strength enables us to provide valuable credit to our customers, employing a disciplined approach to account
management and credit worthiness. We also believe that we are well-positioned to support our growth
initiatives in our IT distribution business and invest in incremental profitable growth opportunities. Finally,
we believe our solid financial position provides us with a competitive advantage as a reliable, long-term
business partner for our supplier and reseller partners.
•Continuous Focus on Optimizing Productivity. We continue to seek ways to improve our processes and
streamline our business model, while refining our cost structure to respond to changes in market demand.
During 2008, we streamlined our European operations and made targeted headcount reductions in
North America, EMEA and Asia-Pacific. We continue to incorporate cost-savings measures in all business
processes. We leverage our IT systems and warehouse locations to support custom shipment requirements,
and by optimizing delivery methodologies, we deliver faster, while reducing shipping costs. We remain
focused on ensuring that our catalog includes the products most desired by our customers, optimizing
inventory management, realizing higher margin opportunities, and developing merchandising and pricing
strategies that produce enhanced business results. In order to fully leverage our global operation, we make
continuous investments in our IT infrastructure and streamline and standardize business processes to drive
efficiency and provide best-in-class quality in our processes and systems throughout the world.
•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, volatility and demand fluctuations in
a single market, vendor or product segment.
•Products. Based on publicly available information, we believe we offer the largest breadth of products
in the IT industry. 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 or segment, or volatility in market demand in specific product lines. We
continuously focus on refreshing our business with new, high-potential products and services. We are
focused on moving deeper into new adjacent product categories and globalizing our efforts. Recent
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