Over hereMassive US distributor Wyle Electronics is looking for a European foothold by sticking to its tried and trusted formula based on a comprehensive portfolio of value-added services. The company has brought in two men to shape up the European market. Svetlana Josifovska reports
Wyle Electronics, a multi-billion dollar US distributor, is trying to make a mark in Europe with strategies already tried and tested in the US. Its long-standing American model based around a comprehensive portfolio of value-added services is being brought into Europe and is forming the basis of Wyle’s expansion here.
To coordinate its expansion plans and shape up its two most important areas of focus – value-added services and demand creation – Wyle recently brought in two managers with local market experience: Nigel Hoppitt, director of value-added services for Europe and Les Litwin, Wyle’s European marketing director.
“My role is to develop the value-added services that we have in the States and bring them into Europe. For the customers in the US we have far more advanced services than here in Europe,” said Hoppitt.
In order to increase profits and enlarge its customer base, Wyle Electronics will apply to Europe a model that works very well in the US. Around 40 per cent of the products Wyle sells have value-added element. This is expected to reach 50 per cent by the year 2000.
Coming to Europe for Wyle was a natural progression as it aimed to work with larger markets in addition to supplying a service to its own customers that were also crossing the Atlantic.
In Europe Wyle already has a geographic spread of offices including those in Denmark, Sweden, Finland, Germany and France in addition to the UK.
To implement its European value-added services plans, Wyle bought Ginsbury, the specialist component distributor, back in 1995. This was followed with the acquisition of the device programmable house Welwyn Technology this year. In addition, Wyle Electronics invested in the development of two new Asic design centres: Bagshot in Surrey and Munich in Germany.
“To offer value-added we have to offer design and programming. On top of that there is the basic materials management tailored to support customer needs. The customer doesn’t have to worry about manufacturing, the materials or the costs as we do all that for them,” said Hoppitt.
However, before Wyle was able to fully implement its European expansion plan fully and see it to fruition, in July this year it was bought by Raab Karcher, a German component distributor that already owns two other European semiconductor distributors, the Memec Group and EBV Elektronik. The acquisition boosted Raab Karcher’s strategic position immediately. It gave it instant access to the US market and it enhanced its value-added service capability through Wyle’s expertise.
As to future plans for Wyle Electronics, Raab Karcher has not yet decided how to go forward. Decisions are being made as we speak and some changes are expected.
“I can’t comment on the future plans,” said Hoppitt. “But they (Raab Karcher and Wyle Electronics) are two very big, successful organisations and I expect that the competition will get more concerned over their joining forces rather than what the political issues will be between the two.”
Until the political issues are settled, Wyle’s team will continue with its original plans of bringing its successful American strategies to Europe.
“We will continue with the philosophy we started in the US. We will also complete the migration of some of our US customers into Europe. We will work with their needs and develop their relationships here,” said Hoppitt.
Hoppitt claims that Wyle’s activities are unsurpassed in Europe: “Wyle is coming to Europe focused on value added and demand creation. Our approach is very different to the distributors in Europe. It is far more focused than anybody else working in Europe.”
Some industry watchers say this is down to the big European distributors getting bigger and broader and with it less technically focused on their franchises. By getting bigger the distributors’ focus on a single product becomes diluted, despite their customers’ wishes for bigger market share. On the other hand, smaller distributors tend to find it expensive to find people with the right balance of technical and commercial skills.
Wyle’s principle of demand creation is very much based on this balance of technical and commercial staff who aim to work very closely with the franchises in order to design new applications and attract new customers. This is also where demand creation comes into play.
In principle, demand creation means creating markets for the products as well as selling them. Many distributors will say they have had demand creation for a long time, but according to Wyle there is a difference in the way it is implemented.
Wyle claims that the bigger distributors have some form of technical competence but the ratio of their technical people to non-technical people is smaller. Hence the demand that they are able to create is very small.
To reduce the cost of ownership Wyle is offering an all-inclusive Supply Chain Management package with value-added services tailored to its customers’ needs. It consists of a variety of features including electronic data interchange (EDI), autoreplenishment, volume programming, Asic design, materials management and kitting.
“Most other distributors are coming from the historic role of a distributor. They talk to the customer and then ship the product. We work with the customer to get what he wants. It’s a creativity rather than a reactivity,” added Hoppitt.
However, Wyle believes there are plenty of other opportunities waiting to be exploited in order to provide comprehensive value-added services to its customers. And Wyle will continue to acquire these qualities.
As Hoppitt says: “There are a lot of projects to complete the value-added services scenario.” The Swiss link
Hawnt Electronics has teamed up with fellow distributor Radiatron Components to increase the market presence of Swiss circuit p rotection specialist Schurter.
In a distribution agreement between the two companies Hawnt will add a number of Schurter products including fuses and the new Multifit GRF family of IECinlets, to its portfolio.
According to Hawnt’s managing director David Hawnt: “The company is constantly tailoring its stock profile to match changing customer requirements.”
Gordon Stolliday, Radiatron’s managing director believes: “Hawnt is ideally positioned to significantly grow the Schurter customer base in the UK.”
This move is in line with Radiatron’s policy of taking all responsibility for UK marketing and promotion of its suppliers product ranges. According to the company this somewhat specialist role has resulted in stable long-term relationships with suppliers, many of which have been represented by Radiatron for over 20 years.