Case Analysis – Synnex

Situational Analysis

The case demonstrates the contrast between the distribution strategy adopted by Synnex and those of other players in the high-tech industry in Taiwan. These products were distributed both in the supply side (manufacturers) as well as the demand side (retail).

Objective(s)

Identifying new markets

To identify new geographies for Synnex, we need to identify its clientele. Synnex’s customers can be divided into two broad categories:

Apparels and toys some other products that have high unit value, a shorter life cycle, prone to drops in retail prices and are sold in small retail outlets. Synnex can include these product lines as a part of its current distribution strategy especially in the demand chain side.

Maintaining high level of operational efficiency

Financial Constraints/Commitments

Synnex has ambitious plans of expanding quickly which will require high capital for both setting up new units and operational activities. In order to acquire more capital for its operations, it can either issue an IPO/FPO or it can raise debt. But by issuing equity stake to the public, its ROE would be hurt. So, it should look at raising debt which can be done in many ways: