Synnex
Careers at Synnex
Mission
Synnex’s mission is to help customers, business partners, and employees achieve success through shared goals, strategies, resources, and technology solutions.
Business segments
Synnex is a business process solutions company. It operates two reportable business segments:
- Technology Solutions – Provides peripherals, software, system components, networking/communications/security equipment, storage and data center server solutions, consumer electronics, and complementary products.
- Concentrix – Provides a portfolio of end-to-end business services and strategic solutions focused on process optimization, customer engagement strategy, technology innovation, business transformation, and front/back-office automation.
History
Robert Huang was exposed to entrepreneurship at an early age. His father owned a paper trading firm in Taiwan that imported many products to Western markets. Huang studied Engineering at university, but went on to earn a Master’s in Management Science from MIT. He then got a job at Advanced Micro Devices in Japan, where he rose quickly to become an international sales manager.
In 1980, after having learned much about Japanese management styles, Huang decided to pursue his father’s path and start his own business. He moved to California and founded Compac Microelectronics, a distributor of technology products. The firm initially exported computer parts to Asian markets, but in 1983 Huang decided to focus on the U.S., particularly the West Coast.
The company performed strongly for several years, with annual revenues eventually growing to $40 million. Then growth slowed, which motivated Huang to sell control of the firm while he remained to manage it. Compac introduced several new distribution centers across the U.S., but when its new owner began having financial issues, he brought in MiTac, which obtained majority control in 1992.
MiTac, a manufacturer, was able to provide Compac with many new products to sell, including motherboards, power supplies, and computer cases, and wielded its purchasing power to help the company buy components at lower prices. It also gave Compac the ability to manufacture computers. These new capabilities helped transform Compac into a value-added business operation.
In 1993 the firm revealed it would be launching a line of Compac-branded PCs, which spurred computer manufacturer Compaq, one of its suppliers, to sue for trademark infringement. Compac countersued, but the two ultimately reached a settlement. In 1994 Compac changed its name to Synnex Information Technologies, with Synnex representing a combination of “synergy” and “nexus.”
The next few years saw several milestones. Synnex signed distribution deals with several major manufacturers, making it one of the top ten distributors in the U.S. Sales grew to $1 billion in 1996. The company acquired numerous companies, allowing it to offer a wider variety of solutions. In 2003 it changed its name to Synnex Corporation and went public, raising $49 million.
Benefits at Synnex
Business model of Synnex
Customer Segments
Synnex has a niche market business model, with a specialized customer segment.
- The company’s Technology Solutions unit distributes its products to system integrators, resellers, and retailers.
- Its Concentrix unit targets its offerings at enterprises in 10 industries: automotive, consumer electronics, banking/financial services, government/public sector, insurance, healthcare/pharmaceuticals, media/communications, travel transportation/tourism, retail/eCommerce, and technology.
Value Proposition
Synnex offers three primary value propositions: accessibility, convenience, and brand/status.
The company creates accessibility by offering a wide variety of options. It distributes over 30,000 technology products from over 300 IT, consumer electronics, and OEM suppliers. It has acquired many firms over the years, enabling it to expand its selection. For example, in July 2016 it acquired Minacs and integrated its operations into Concentrix, strengthening its automotive sector expertise.
The company offers convenience by supporting its products with related business process services. It offers its buyers customer management, web hosting, software development, hosted software, back office processing, and domain name registration. These services help save time and costs.
The company has established a powerful brand as a result of its success. It serves more than 20,000 resellers (corporate, government, and value-added), retailers, and system integrators throughout the U.S., Canada, and Japan. It maintains operations in 26 countries and has over 70,000 employees with fluency in more than 40 languages. Lastly, it has won many honors, including the Operational Excellence Award from HSN for five years in a row, placement on the Top 100 List of Best Outsourcing Providers by IAOP (2016), and the National Quality Award from Golden Peacock (2016).
Channels
Synnex’s main channels are its direct sales force, which includes regional sales teams, and its business development/product management specialists, who sell solutions for specific end-market verticals.
The company promotes its offering through its website, social media pages, and a roadshow series called “Secret Sauce” at which it gives presentations in different locations that introduce customers to new solutions and services and provide marketing advice.
Customer Relationships
Synnex’s customer relationship is primarily of a self-service nature. Customers utilize its solutions while having limited interaction with employees.
That said, there is a personal assistance component in the form of phone, e-mail, and online chat support.
Key Activities
Synnex’s business model entails distributing third-party products to its customers as well as developing and manufacturing its own products.
Key Partners
Synnex relies on over 300 suppliers for its products; they include software, IT systems, peripherals, system components, consumer electronics, and networking equipment manufacturers.
Its main suppliers are HP, Intel Corporation, Asus Tek Computer, Lenovo Group, Lexmark International, Microsoft Corporation, Samsung Electronics, Panasonic Corporation, Xerox Corporation, Seagate Technologies, and Hewlett-Packard Enterprise Company. HP is the largest supplier, accounting for 25% of its revenues in 2015. Synnex signs non-exclusive distribution agreements with the firms.
Key Resources
Synnex’s main resources are its physical resources. Its Technology Solutions segment operates 40 distribution and administrative facilities in the U.S., Canada, China, Japan, and Mexico. Its Concentrix segment operates 90 delivery centers and administrative facilities in North and South America, Europe, and the Asia-Pacific.
The company depends on its sales personnel to distribute products. Lastly, its manufacturing is conducted in assembly plants in California, Tennessee, and the UK.
Cost Structure
Synnex has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of products, a variable expense. Other major drivers are cost of services, a variable cost, and sales/administration expenses, a fixed cost.
Revenue Streams
Synnex has two revenue streams: revenues generated from the sale of products and services.
