Case | HBS Case Collection | April 1998 (Revised January 2007)

Arrow Electronics, Inc.

by Das Narayandas

Abstract

Deals with the issue of cross-selling and managing a portfolio of products and services in business markets. Arrow/Schweber (A/S), a subsidiary of electronic parts distributor Arrow Electronics, has a portfolio of products that differ in the amount of value added by A/S. A/S uses value-added items such as programmable logic chips as "loss leaders" in order to acquire and retain a customer. It makes money when it sells the so-called "commodity" or low value-added products to the same customer. An Internet-based distributor is now offering Arrow a chance to sell commodity products through its e-commerce site. This new channel can threaten Arrow's overall business model if a large portion of its existing customers switch their purchases of the commodity products to this new distribution channel. Arrow needs to decide how it should respond to this challenge.

Keywords: Distribution Channels; Internet; Problems and Challenges; Change Management; Electronics Industry;

Citation:

Narayandas, Das. "Arrow Electronics, Inc." Harvard Business School Case 598-022, April 1998. (Revised January 2007.)