Micro Age, Inc. Essay

2263 words - 9 pages

MicroAgeMicroAge, Inc started as a storefront in Tempe, Arizona in 1976 selling personal computer kits to hobbyists. During their first year of operation, founders Jeff McKeever and Alan Hald sold $1.5 million worth of computer kits, priced at under $1,000 each. Twenty years later, revenues exceeded $3.5 billion dollars, while the business evolved from a computer store to a master reseller and a full time integrator of information technology products. MicroAge continually reinvented itself and its business with an entrepreneurial spirit most companies of its size cannot enjoy. MicroAge thrives on the theory that many of its fiercest competitors can also be its best clients. The case provided an excellent vehicle that helped me understand the opportunities and risks that are related to electronic commerce and the Internet. yyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy Background and Organizational Context: 1. Background: Original company "The Byte Shop" was formed in 1976 by Jeff McKeever and Alan Hand as a hobby oriented computer shop focused on selling microcomputer kits.Over the next three years the company expanded rapidly opening additional stores and selling via e-mail in the US and abroad.An aggressive growth plan hampered by a bad economy in the early 80's ended in bankruptcy in 1981. The company was reformed in 1983 as MicroAge Inc.Bailed out by an investor, MicroAge continued their focus on the full service approach, but now focused on gaining relationships with corporate desktop computer suppliers (IBM, Compaq, Apple and HP). Strategy worked! By 1998 MicroAge was a Fortune 300 Information Technology Distributor and Master Reseller with 4.4 Billion in revenues and 3000 employees as of 1997.Company still run by founders. Jeff McKeever named one of top 25 most influential executives in the computer industry each year from 1985-1997.2. Services: Currently MicroAge has five distinct business units. A Distribution Group, Integration Group (high end IT solutions), Logistics Group (call center/help desk), ECAdvantage (e-commerce platform), and Technology Services (assistance for e-commerce).With the change in distribution networks during the 90's MicroAge expanded its product line to provided over 20,000 products from over 500 suppliers.3. Industry: In the early 90's the distribution of computers was changing from a "closed sourcing to an open sourcing" model. This forced the many companies practicing channel distribution and integration to decide on either Full Line Distribution or Corporate Systems Integration.Changes in the industry saw a move by suppliers from Build to Forecast to Build to Order models. This change coupled with the advantages of ordering via the Internet had the potential to disintermediate companies on the supply chain.Customers are no longer satisfied with good service. Companies have to exceed client expectations in order to keep them on board. This requires MicroAge to continually think of ways to sell clients on value added...

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