Value Proposition

• Tech Data offers different value propositions to vendors and customers.
• The value proposition to vendors is to provide comprehensive services, assist with logistics management, serve as a cost effective and variable route to market, and to provide access to fragmented markets.
• The value proposition to customers is to provide services, training and technical support, financing and inventory management, logistics management, and end to end solutions.

Customer Segments

• Tech Data serves a niche market. Products are distributed to corporate and value added resellers, as well as direct marketers, retailers, and managed service providers.

• Resellers are offered the option of a line of credit and can access marketing and technical services in addition to education and training for their staff.

Key Activities

• Tech Data distributes products to its resellers and direct marketers. The company's core business revolves around cloud, data center, mobility and supply chain services.
• For the cloud segment, Tech Data assists providers with positioning, selling and scaling its cloud offerings. Support is extended to its resellers via enablement, education, and the adoption of subscription-based services. Buying, selling, and other services are automated and offered to its global partners through the global IT platform StreamOne.
• Tech Data's data center services are targeted to data center and network infrastructure that can meet the demands of bandwidth intensive applications. The mobility market is serviced with products, carriers, and promotions through the solutions and account management portal, CellManage.
• For the supply chain, Tech Data offers traditional logistics services as well as opportunities for clients to reduce cost, simplify processes, improve the customer experience and grow the business. Physical, financial, and human capital is leveraged to provide solutions via consultations, business intelligence and analytics, and inventory management.

Key Partners

• Tech Data has over 1000 global vendor partners operating in more than 100 countries. The vendors are providers of endpoint and advanced solutions, as well as training and educational services provided in conjunction with Tech Data.
• Vendor partners include Apple, Acer, Cisco, IBM, Intel, Lenovo, Microsoft, Red Hat, Samsung, TrendMicro, and Quest. Products from Apple, HP inc, and Cisco each exceeded 10% of consolidated net sales.
• Partnerships were recently announced with Akamai to deliver performance and security services, and Carbon Black to offer cloud-native endpoint protection.

Cost Structure

• Personal service at Tech Data is prioritized to provide premium value propositions to both vendors and customers resulting in a cost structure that is value driven.
• According to the annual report for fiscal year 2019, Tech Data's expenses, in declining order of value, are costs of products sold, then operating expenses. Operating expenses include sales, general and administrative expenses, acquisition, integration, and restructuring expenses, goodwill impairment, and interest expenses.

Revenue Streams

• The revenue stream for Tech Data is from the sale of technology products and services. Tech Data recognizes revenue at the point where control of the product is passed to the consumer at shipment.
• Product revenue is generated from the sale of technology products to resellers, and service revenues are generated from fees.

Channels

• The main channel for distribution of products is the Tech Data sales team. The team is comprised of field sales and inside sales representatives who are trained on company procedures and policies and on the technical specifications of the products sold.
• Field sales representatives are usually located in metropolitan areas and are supported by internal telemarketing teams for the specific territory.
• A secondary distribution channel is through the e-commerce website. Customers can remotely place orders, check on the availability of inventory, and on product pricing. Larger customers can conduct standard electronic data interchange transactions via access to the electronic data interchange.

Research Strategy

Brief Overview

• Techdata is a wholesale distributor of technology products and services that serves as link vendors and end-users.
• It was founded in 1974 by Edward Raymund, who at that time wanted to sell computer supplies to hospitals and government agencies.
• With many years of experience, the company has become a leader in the industry, helping big companies like Apple, Microsoft, HP, Cisco, and several other tech vendors to bring their technology products and services to the market.
• The company's current revenue is over $37 billion. 

Overall Pricing Strategy

• The company operates a value-based pricing structure. 
• The cost of service or product is driven by the products sold or services rendered to customers, and this can be obtained by contacting the company directly.

Main Products and Services

• The company categorized their product and services into two primary solution portfolios, namely endpoint solution portfolio and advanced solution portfolio.
• The endpoint solution portfolio includes products such as "s PC systems, mobile phones and accessories, printers, peripherals, supplies, endpoint technology software, and consumer electronics."
• The advance solution portfolio includes services like "data center technologies such as storage, networking, servers, advanced technology software and converged and hyper-converged infrastructure."

Target Market

•  Value-Added Resellers (VAR)
•  Direct marketers
•  Retailers 
•  Corporate resellers
•  Managed Service Providers (MSP)

Competitive Advantage

• It is a leader in the wholesaler distributor segment of technology products, services, and solutions.
• Techdata is a distributor of technology products to over 105,000 resellers and helps over 1200 tech vendors, including big names like Cisco, Apple, HP, and Microsoft.
• It operates in over 100 countries.
• The company completes about 50,000 transactions daily and has recorded sales of over 150,000 technology products.
• It has received several awards of excellence from "world’s top cloud service providers including Talkin‘ Cloud for two years in a row and as one of the World's Most Admired Companies by Fortune for seven years in a row."

Research Strategy