Arrow Electronics Inc. CaseArrow Electronics is a distributor of electronic parts, including semiconductors and passive components. It was founded in 1935 and reached the number one position among electronics distributors in 1992. Arrow's North American operations were based in Melville, New York. The sales and marketing functions were divided into five operational groups. This case study focuses on the largest of the Arrow groups, Arrow/Schweber (A/S). Express Parts, Inc. has submitted a proposal on an Internet-based trading system that would allow distributors to post inventories and prices on an Internet platform and then offer customers the ability to shop at affordable prices. The question is whether Arrow/Schweber should accept Express's offer and sell its products via this Internet-based trading system. At best, A/S could acquire transactional customers, who simply want to purchase a product and do not need a special service. In the worst case A/S could lose customers, because the possibility of getting better prices on the Internet platform is greater, since there are more competitors that can be compared. Customer Relationship A/S's approach is to use VA products as the first step to build a relationship with its customers, because it is difficult to approach a customer through the BAS business. While relationship customers also use the BAS system, it is more valuable to transactional customers. Because transactional customers place more importance on fast delivery and low prices, but less on relationships, A/S focuses its efforts with the BAS system on providing transactional customers with these values. To meet the needs of transactional customers, A/ S pursues...... half of the document... you. All in all A/S should reject the Express Referral offer due to three crucial aspects: o Supplier impairment, o Probable gross margin losses, o Loss of A/S strategy/customer relationship focus. After this decision Internet and Express distributors must be considered a strong competitor respectively due to the price sensitivity of the electronics industry. Therefore A/S should work on its corporate image to highlight its advantages over discounters. Therefore A/S must emphasize that they are aware that they are not the cheapest but will still create greater benefits for customers by offering service and expertise. In summary, Internet distributors are enemies of A/S because they cheat on prices. A/S must respond to them as a convinced anti-internet distributor by satisfying the needs of its customers instead of gutting them.