Ingram Micro 2011 Annual Report Download - page 19

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• quality and breadth of product lines and services;
• speed and accuracy of delivery; and
• availability of web- or call center-based sales.
We compete against broad-based IT distributors such as Tech Data and Synnex Corporation. There are a
number of specialized competitors that focus on one market or product or a particular sector with which we
compete. Examples include Avnet and Arrow in components and enterprise products; Westcon in networking and
security; D&H Distributing, ADI, and Petra in consumer electronics; ScanSource and Bluestar in AIDC/POS
products; and Brightpoint, Brightstar and 20:20 Mobile Group Limited in mobility products. While we face some
competitors in more than one region, others are specialized in local markets, such as Synnex Technology
International (pan-Asia-Pacific), Digital China (China), Redington (India), Express Data (Australia and New
Zealand), Intcomex (Latin America), Esprinet (Italy and Spain), and ALSO-Actebis Holding AG (Europe). We
believe that suppliers and resellers pursuing global strategies continue to seek distributors with global sales and
support capabilities.
The evolving direct-sales relationships between manufacturers, resellers, and end-users continue to
introduce change into our competitive landscape. We compete, in some cases, with hardware suppliers and
software publishers that sell directly to reseller customers and end-users. However, we may become a business
partner with these companies by providing supply chain services optimized for the IT market. Additionally, as
consolidation occurs among certain reseller segments and customers gain market share and build capabilities
similar to ours, certain resellers, such as direct marketers, may become our competitors. As some manufacturer
and reseller customers move their back-room operations to distribution partners, such outsourcing and value-
added services may become areas of opportunity. There has been an accelerated movement among transportation
and logistics companies to provide many of these fulfillment and e-commerce supply chain services. Within this
arena, we face competition from major transportation and logistics suppliers such as DHL, Menlo Worldwide
Logistics and UPS Supply Chain Solutions.
The advent of cloud computing, or software-, platform- and infrastructure-as-a-service, provides another
means for suppliers to deliver technology solutions directly to end-users and bypass the IT distribution channel.
IT distributors are developing initiatives to remain relevant as this, and other alternative delivery models, evolve.
We have developed service offerings designed to enable resellers to offer cloud computing solutions to end-users
and will continue to refine service offerings around new delivery models.
We are constantly seeking to expand our business into areas closely related to our IT products and services
distribution business. As we enter new business areas, including value-added services, we may encounter
increased competition from current competitors and/or from new competitors, some of which may be our current
customers.
Seasonality
We experience some seasonal fluctuation in demand in our business. For instance, we typically see lower
demand, particularly in Europe, in the summer months. We also normally see an increase in demand in the
September to December period, driven primarily by pre-holiday impacts on stocking levels in the retail channel
and on volume of business for our North American fee-based logistics services.
Inventory Management
We strive to maintain sufficient quantities of product inventories to achieve optimum order fill rates. Our
business, like that of other distributors, is subject to the risk that the value of our inventory will be impacted
adversely by suppliers’ price reductions or by technological changes affecting the usefulness or desirability of the
products comprising the inventory. It is the policy of many suppliers of technology products to offer distributors
limited protection from the loss in value of inventory due to technological change or a supplier’s price
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