Arrow Expands Its Market - Analyst Blog
April 17 2012 - 11:23AM
Zacks
Earlier this week, Arrow Electronics Inc. (ARW)
announced its decision to open custom computer system integration
fulfillment facilities in Brazil and India. The new facilities
shall provide advanced original equipment manufacturing (OEM)
services, considered to be more economical, technologically
advanced, productive and user friendly.
Management expressed its exuberance on the decision to open
these integration facilities at San Paulo, Brazil and Bangalore,
India, by averring that market proliferation strategies have been
of primary importance to the company and are implemented with the
intent of satisfying its customer needs across the globe.
Arrow has been proactive with regard to its market expansion
advancements. These new locations will add to Arrow's already
existing integration facility centers at Arizona, Hungary, China,
Israel and Mexico.
Providing optimum value to customers has been an important
aspect to Arrow. In early April, the company entered into an
agreement with Ocular LCD, Inc. to add the latter's Ocular
Crystal's Touch panels to its existing product database in North
America.
It is noteworthy that these market expansion strategies have
been executed in sectors which are proving to be incipiently
profitable for Arrow. In 2011, consolidated sales across the
Americas soared 34.2%, whereas the Asia Pacific region recorded
sales growth of nearly 18.4%, annually. Hence, it would not be
hyperbolic to infer that these current moves shall further abet
growth at areas where demand is already escalating for Arrow's
products.
Avnet, Inc. (AVT) declared that nearly 68% of
its total sales in 2011 accrued from the Americas and Asia Pacific.
Hence, Arrow should be on its guard regarding competitors with
strong market shares across the regions of its existing and future
operations.
The company currently retains a Zacks #2 Rank, which translates
into a short-term Buy rating. We also maintain a long-term Neutral
recommendation on the stock.
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