Twenty years spent working for multi-national corporations in Hong Kong has given Jerre Stead, Ingram Micro's new chief executive and president, an aggressive streak. It is this streak which he will use to ensure that Ingram is not among the casualties in the forthcoming distribution industry shake-out.
He believes excess capacity in the distribution channel can't last.
'I read in the past week that the channel players have gone from 300 to 154 in the past two years alone. And there is still excess capacity,' he says. 'The cost structure needs to be driven down on a global basis.
I'm not wishing an economic downturn on us, but if there were one it would be no bad thing - it would shake a few players out of the bushes. We will be there to aggressively help them on their way if it happens.'
Stead spent most of Comdex in his hotel meeting room talking to customers.
'At least 14 of the 30 customer meetings I have held so far brought up the need for global accounts management - at the moment, we are the only ones who can do that,' he says. 'Customers who say they need help are the honest ones and we will help them. The ones who say they can do it are not being completely truthful.'
Stead is no stranger to Europe or the UK. He was a senior executive at Honeywell from 1977 to 1982 and he knows the problems that doing business in Europe can present. 'I think I can say that I set up the first single-pricing centre for distributing customer services of any major corporation.
That's what the customer wants.'
He also knows the problems inherent in working in a non-unified European market. 'We were dealing then with different tariffs, hundreds of cross-border customer forms and no common transport or railroads. The common policies can only be good for business - it's a very positive development.
But we must cater for local tastes. That's the way to success.'
He sees the single European currency as positive. 'One of the things we use a lot is insurance on our receivables - it works effectively. The common currency will allow us to leverage our more powerful pan-European balance sheet and let us take advantage of our size a little better. The common currency will be good for business.'
On a global scale Ingram intends to expand its operations in what Stead calls central Europe, the old Eastern Bloc where it has no great presence.
'We have appointed Phil Ellett president and chief operations officer of Europe to free up John (Winkelhaus II) to spearhead our thrust into central Europe. We also intend to spend more time on our operations in Finland, Portugal, Spain, Turkey and Greece.
'One of John's objectives for 1997 is to get us truly pan-European in an area which is worth about $450m distribution-wise, but growing about 50 per cent every year. You will see that growth for some time to come.'
Asia Pacific is also a very important area of growth for Ingram. ' I've asked David Dukes, our vice chairman, to spend 50 per cent of his time for the next two years focused on getting us where we need to be: number one. We have good facilities in Singapore and Malaysia. We will have facilities in Thailand in the next two weeks. We will also be moving one of our most senior people to Hong Kong to get his feet on the street.'
Stead's work in Hong Kong means he knows how important the emerging markets in China will be. He sees nothing but opportunities, where others see only Communist conspiracies.
Stead represents a more aggressive Ingram and he hints at more partnerships and acquisitions in the coming year.
He has a surprisingly upbeat reply to perceptions that the UK market is flat. 'We expect double-digit growth in the UK. The customers who operate our reseller programmes will see real growth. Through them we hope to add more and more value. People reward good service.'
He is also optimistic about the CHS/ Merisel merger. 'The merger will probably mean a stabilisation in the market. We have to get to an environment where people are rewarded based on performance instead of going around driving down margins to the detriment of everybody. I hope that's one of the things which will happen as a result of the CHS Merisel merger.
You do not win over time by driving prices down - everybody loses. It causes great uncertainty for customers as they have no idea what's right and what's wrong.
'It is a significant merger and it's good for the distribution industry.
We respect our competition. Then we go out and beat the hell out of them.'
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