Market Consolidation Trends in Computer Distribution PPT

This PPT slide, part of the 91-slide Computer Industry Analysis Training PowerPoint presentation, illustrates the consolidation trend within the distribution channel of the computer industry, emphasizing market valuations and return on equity (ROE) among key players. The chart presents market capitalization figures for various companies, with Ingram Micro leading at $1,860 million and a ROE of 15.7%. Tech Data follows with a market cap of $1,270 million and a ROE of 13.7%. The remaining companies, such as Pioneer Standard, Inacom, Merisel, and MicroAge/Pinacor, show significantly lower valuations and some negative ROEs, indicating financial struggles.

The text highlights factors contributing to market share consolidation. Organic growth is noted as a primary driver, with Ingram Micro and Tech Data outperforming the overall market growth rate. Their aggressive revenue strategies have positioned them as leaders in the distribution sector. Mergers and acquisitions (M&A) are also pivotal, with Ingram Micro's acquisitions of several companies and Tech Data's strategic purchases enhancing their market positions.

The slide also points out that financial markets are increasingly favoring stronger players, limiting capital access for weaker firms. This trend underscores a broader industry shift where only the most robust companies can thrive, further entrenching their dominance. The mention of outsourcing, specifically GE ITS's logistics partnership with Tech Data, illustrates additional strategies employed by these firms to bolster their operational efficiency and market presence.

Overall, the slide serves as a critical snapshot of the current state of the distribution channel, providing insights into the dynamics shaping the industry and the implications for potential investors or stakeholders.

This slide is part of the Computer Industry Analysis Training PowerPoint presentation.

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