After two decades of successful expansion and redefining the high-tech product distribution system, Synnex International must make a decision on where it will go next. Founding President Evans Tu has seen the firm grow from a local electronics distribution channel in Taiwan into a worldwide powerhouse in product distribution with vendors knocking on doors requesting expansion into new markets. At this point in the company's growth, Tu has the full support of the board of directors to expand into new markets or new product lines, but he knows that capital management at every step is the key to success. Should Tu move forward with the 26 logistics centers in the plans for China? Should he explore new products and branch out from electronics to other goods? Should he continue entering new markets or focus on developing the ones in progress? This analysis will attempt to examine the issues at hand and make valuable recommendations for the future of Synnex.
Synnex seems to have distribution systems and supply chain management down to an exact science of precision and accuracy. The question here is not a question of business model or company weaknesses, but an issue of how to manage capital and prioritize expansion efforts. Capital risk is ever-present when expanding a corporation, and is an especially pressing issue when, like Synnex, a company is considering broadening its range of products or services provided. The issues of capital management and capital risk are the two most important factors in determining this company's success moving forward.
Synnex International has a true competitive advantage in the electronics distribution market. Its management information system (MIS) and corporate identity system (CIS) cannot be duplicated, which creates a long-term advantage over its competitors based on speed of order processing and ability to quickly identify problem customers and...