Pest Analysis On Arrow Electronics -
December 3rd, 2010
Arrow Electronics (NYSE: ARW) is a Fortune 500 company headquartered in Melville, New York. The company specializes in distribution and value added services relating to electronic components and computer products.
The company started in 1935 as a retail store for radio parts on New York City's Radio Row in Lower Manhattan, and incorporated in 1946. In 1961, Arrow went public, with two stores and a distribution center. Three friends from Harvard Business School — Duke Glenn, Jr., Roger Green and John Waddell — began in 1968 to transform the stores into a much larger corporate entity, acquiring GCS Electronics Division, and two refiners of lead (necessary for components), Schuylkill Products Company and Schuylkill Lead Corporation. Glenn and Green would die in a tragic accident twelve years later.
By 1971, Arrow was one of the nation's Top 10 distributors of electronic equipment, and acquired National Electrical Supply Company that year. The acquisition of Kay Electric Supply Company in 1973 followed, and the next year, Arrow developed its own computerized distribution system. The decision was made in 1976 to get out of retail business and to concentrate on distribution and refining. That year, Arrow went from 10th largest to 5th largest electronic distributor in the nation. The company got a listing on the New York Stock Exchange in 1979, with the symbol ARW, and acquired Cramer Electronics the same year.
b. Analysis of the External Environment of Marks and Spencer
The environment in UK, specifically its retail environment, appears to be highly attractive. Companies have the support of the government with minimal barriers of entry. The problem in this regard is the fact that there is some level of difficulty in penetrating the retail market, especially for new entrants, as there are existing monoliths that are willing to drive them out of business as quickly as they entered. This is similarly true in the case of companies with lush histories like Marks and Spencer. Seeing that their environment is essentially welcoming, neglecting the cutthroat nature of the competition would point to the imminent demise of any company.
III. Internal Analysis
In support of the external analysis of the environment of the organisation, the internal environment should also be taken into consideration. For this part of the study, the value chain of Marks and Spencer will be examined.
a. Value Chain
The value chain of the organisation is coined primarily by Porter as a tool to recognise the inherent capabilities of the organisation to realise its competitive advantage. The following will describe the primary activities and support activities of the company.
i. Primary Activities
As indicated in the value chain theories of the primary activities take in hand several specific functions of the company: inbound logistics, operations, outbound logistics, sales and marketing, and service. In the area of inbound logistics, Marks and Spencer receives inventories coming from its suppliers. Initially, the management of the company held strictly on the exclusive use of English suppliers. Eventually, they have already taken the prerogative to receive materials from suppliers from other countries. In terms of operations, Marks and Spencer is involved in the direct selling of apparel, foodstuff, and even home furnishings. In the same manner, they are also involved in the distribution of these items to all the Marks and Spencer stores in UK. This essentially covers the outbound logistics of the organisation. Moreover, sales and marketing of the company seems to be one of the more prioritised elements in the organisation. With the intense competition present in the industry, vying for consumer favour and adding value to the brand takes a step above the rest of these primary activities. In the area of service, the company also have to deal with the maintenance of their respective stores. The case study provided by Collier (2004) provided that the company has acquired stores that also require maintenance. This is where the primary activity of service takes place.
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