Ingram need more than price: Cullen

Ingram need more than price: Cullen

Tech Pacific boss says its business as usual for him and many hard yards ahead for Australian distribution's new gun.

Unfazed by a barrage of recent offensives from other global players, the head of the local IT industry's largest distribution company feels Ingram has a lot of work to do before it will gain satisfactory market share targets.

David Cullen, Tech Pacific's Australian managing director, said he feels no threat from the leg-up into Australia that Ingram received from its confirmed acquisition of systems distributor ITG and component-focused supplier ERA.

Cullen said there are many problems the new Ingram-fuelled distributor will face in Australia, not the least of which are merging disparate business cultures, understanding the local market and stiff competition from all angles.

"Given the investment it [Ingram] has now made, it is going to take them years to get a return," Cullen said. "If they think they can just jump on planes and come out here for a month or so and then manage operations by coming back every six months or so, then they have another thing coming."

According to Cullen, the ERA purchase comes with a lot of baggage as a result of the Intel scandal of last year. He was also of the opinion Ingram has never been very successful in the world's smaller markets, such as Australia.

Ingram's purchase of ITG was "a very interesting approach" Cullen said, before adding he wouldn't have thought it was a good target either. "If they just go out there and buy seven or eight businesses and then try to merge them all together expecting instant success, then I just say good luck to them," he said. "That is a sure-fire way to absolutely crucify your customer base.

"The other interesting thing is that Ingram has never really been successful in smaller markets previously as far as I can see. It's had difficulties in trying to transfer its American systems and methodologies into smaller markets."

Cullen is also of the opinion there is a lot of choice already for resellers and the only way for Ingram to really grab marketshare would be through price cutting.

"If anything, there is already over-distribution," he said. "Ingram won't be able to last out there forever on price alone. It has to make a return at some stage. You can gain some share for a period on price but it is not a long-term strategy. The bottom line for customers [resellers] is in whether or not they are getting added value."

Continuous improvements

Tech Pacific's response to this attack on its market share is to continue with its "continuous and ongoing improvements to customer services, logistics and value adds", Cullen said.

"I have 18 major projects on the table at the moment in that area and each of those will give an advantage to my customers and take some of the costs out of running their businesses."

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