Case Analysis: Sales Force Training at Arrow Electronics
Case analysis: Sales Force Training at Arrow Electronics
Executive Summary
– This case focuses on the training given to the fresh, out- of- college
sales people at Arrow Electronics and the reasons on why the training programme failed to have the intended effect. Arrow Electronics was the first distributing company to recruit college graduates as a part of their sales force. To bring them up to the skill level required by field sales representatives, an elaborate training programme was put in place. By the second year the training programme proved to be really successful as the trained graduates became best in the business as field sales representatives. That was when the competitors poached them with higher salaries and promise of leadership and management roles. Attrition level among the graduates or sprouts as they were called reached a crescendo soon and Arrow Electronics had to do away with the programme. Situational Analysis – Arrow Electronics started as a radio equipment retailer in 1935. In the 1960s and 70s it started dealing in electronic equipments. It quickly progressed to being the 2nd largest distributor by 1980 and in 1993 has the highest sales in the industry with $2.5 billion in North America. Arrow ordered components from suppliers like Intel, Motorola and sold them to OEMs like IBM, HP etc. They also catered to smaller firms and start ups. They were renowned for having a diversified product portfolio. A major competitive advantage of Arrow was its extensive and strong relationship network with clients. Sales were divided into four distinct product groups viz. Commercial semiconductors, military and aerospace semiconductors, passive and connector products, computer peripherals and software. Steve Kaufman was the CEO and Chairman of Arrow Electronics and the main protagonist of the case too. Organisational Structure and Compensation & Benefits The organizational structure of Arrow was hierarchical in nature, with each sales force divided
Executive Summary
– This case focuses on the training given to the fresh, out- of- college
sales people at Arrow Electronics and the reasons on why the training programme failed to have the intended effect. Arrow Electronics was the first distributing company to recruit college graduates as a part of their sales force. To bring them up to the skill level required by field sales representatives, an elaborate training programme was put in place. By the second year the training programme proved to be really successful as the trained graduates became best in the business as field sales representatives. That was when the competitors poached them with higher salaries and promise of leadership and management roles. Attrition level among the graduates or sprouts as they were called reached a crescendo soon and Arrow Electronics had to do away with the programme. Situational Analysis – Arrow Electronics started as a radio equipment retailer in 1935. In the 1960s and 70s it started dealing in electronic equipments. It quickly progressed to being the 2nd largest distributor by 1980 and in 1993 has the highest sales in the industry with $2.5 billion in North America. Arrow ordered components from suppliers like Intel, Motorola and sold them to OEMs like IBM, HP etc. They also catered to smaller firms and start ups. They were renowned for having a diversified product portfolio. A major competitive advantage of Arrow was its extensive and strong relationship network with clients. Sales were divided into four distinct product groups viz. Commercial semiconductors, military and aerospace semiconductors, passive and connector products, computer peripherals and software. Steve Kaufman was the CEO and Chairman of Arrow Electronics and the main protagonist of the case too. Organisational Structure and Compensation & Benefits The organizational structure of Arrow was hierarchical in nature, with each sales force divided