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Distribution Structure

IDEMA Financial Conference Distribution Unwrapped Session Richard E. Rutledge Vice President & General Manager PC Components Member, IDEMA BOD November 4, 2004. Distribution Structure. Distribution Model: Focus On All Layers. Suppliers Products & Services Place & People Price & Programs

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Distribution Structure

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  1. IDEMA Financial ConferenceDistribution Unwrapped SessionRichard E. RutledgeVice President & General ManagerPC ComponentsMember, IDEMA BODNovember 4, 2004 Distribution Structure

  2. Distribution Model: Focus On All Layers Suppliers Products & Services Place & People Price & Programs Promotion PUSH Partners 77 WW (19 Americas, 35 EMEA, 23 APAC) Coverage Customer Base Credit Risk Currency Risk Convenience Communication Collaboration Cost-of-Sales PULL Customers 113,000 Worldwide 37,000 Americas 44,000 EMEA 32,000 APAC

  3. Distribution Partners: Models & Balance Component Distributors Industrial Distributors Product Distributors

  4. Global Distribution: Know the Customer Government Authorized Distributor Platinum Reseller Education Platinum Integrator POS Gold Reseller Business Gold Integrator Western Digital SMB Blue Integrator POS Platinum Retailer Authorized Retailer Key Indirect SelectWD Direct End Users

  5. Global Distribution: Meet the Customer

  6. Global Distribution: Service the Customer Toronto Budapest Moscow Amsterdam Beijing Seoul Shanghai Los Angeles Dubai Mumbai New Dehli Bangalore Chennai Kolkata Suzhou Shenzhen Singapore Sao Paulo Sydney Customer Return Centers High Level Recovery Centers Call Centers

  7. Global Distribution: Manage the Programs A Price Waterfall Example, Light Bulbs • Distribution programs are not unique to HDDs or PC Components • McKinsey conclusion: transactional pricing increases profit Michael V. Marn, Eric V. Roegner, and Craig C. Zawada http://www.mckinseyquarterly.com/article_abstract.aspx?ar=1269&L2=16&L3=19 The McKinsey Quarterly, 2003

  8. Global Distribution: Understand the Dynamic Weekly Sales Out Trends Within the Quarter Distribution Channel Not linear or automatic but NOT random 100% 90% 80% 70% 60% 50% Cumulative Percentage of Units Sold 40% Perfect Linearity 30% 20% 10% 0% Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12 Wk 13 Week Within the Fiscal Quarter

  9. IDEMA Financial ConferenceDistribution Unwrapped SessionRichard E. RutledgeVice President & General ManagerPC ComponentsMember, IDEMA BODNovember 4, 2004 Distribution Structure

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