Anixter’s mission is to help its customers specify solutions and make informed purchasing decisions around technology, applications, and relevant standards.
Anixter is a provider of security and communications products, as well as electronic and electrical wire and cable. The firm operates three reportable business segments:
power plant maintenance, repair and operations supplies, and smart-grid products, and arranges materials management and procurement outsourcing for the power generation and distribution industries. Operates primarily in the United States and Canada.
In the 1950s distributors and wholesalers in the electrical wire and cable business had to buy cable in bulk directly from manufacturers, a process that included long lead times. Brothers Bill and Alan Anixter realized that they could solve the problem by providing a readily available supply. So they borrowed $10,000 from their mother to launch Anixter Brothers, a wholesale cable distribution firm.
The firm offered convenience, as customers could buy the amount they needed, as well as quality service. Within a year it made $300,000 in annual sales; by 1966 that figure grew to $10 million. In 1967 it went public and was listed on the American Stock Exchange. By the end of the 1960s it made 19 acquisitions, and by the end of the 1970s it had $268 million in sales and 51 warehouses.
During that decade Anixter realized that it could not rely solely on its traditional customers, wholesalers and distributors. So it began targeting end-users of cable and wire as well. Demand grew, and to meet it the company launched new locations in the U.S. and Canada. It also expanded internationally by opening a branch in the United Kingdom in 1972.
At that point Anixter was the largest distributor of electrical wire and cable in North America. It got an additional growth opportunity when AT&T was broken up in 1984; it responded by offering voice products to fill the gap in service. Later that decade it moved into the data communications realm. In 1986 it was purchased by Itel, a holding company. In 1995 Itel changed its name to Anixter.
Business model of Anixter
Anixter has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at firms of all industries and sizes.
Anixter offers two primary value propositions: innovation and brand/status.
The company has embraced innovation throughout its history. It was the first business to maintain a readily available of inventory of cable for distributors and wholesalers in the electrical cable and wire industry. It also introduced the Levels program, the first-ever written performance specification for data cabling systems. Prior to the program’s launch, customers did not know whether the cabling systems they purchased could support the Ethernet they had begun to implement. Anixter’s solution not only became popular and widely used, but was officially recognized as an industry standard.
The company has established a strong brand due to its success. It has over 125,000 clients in more than 300 cities in over 50 countries. It offers more than 450,000 products and $1.2 billion in inventory. It claims to have the broadest and largest wire and cable product offering the in the world, with over 65,000 products in stock. It also claims to be the largest electric utility distributor in the United States and Canada, with over 100 warehouses and over 300,000 products for utility customers. Lastly, it has won a number of honors, including the following:
- The Best Value Added Distributor Award from Digital Security
- The Readers’ Choice Award from Control Design Magazine
- Recognition as one of Forbes‘ Top 100 Most Trustworthy Companies in North America
- Recognition as the Control Systems Integrators Association (CSIA) Partner of the Year 2011
- Recognition as the GE Transportation Supplier of the Year for Quality
Anixter’s main channel is its direct sales team, which has offices globally. It also sells products through its website, specifically an online order tool called eAnixter. The company promotes its offering through its social media pages, advertising, catalogs, and participation in conferences.
Anixter’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:
- Support Services – Anixter’s customer service teams provide technical and engineering support when and where clients need it.
- Training Services – Anixter operates Anixter University, a program that offers standards-based and technical information for integrators, contractors, consultants, and end-users. Its curricula is organized into “colleges“, with each one containing courses of varying technical levels. The classes are customized to match clients‘ learning requirements. They are free and most are certified for BICSI Continuing Education Credits. The courses are taught by members of the company’s Technology Support Services group, who have a variety of academic degrees and professional certifications.
Despite this orientation, there is a self-service component. The company’s website features a “Resources” section that includes brochures, case studies, TECHbriefs, white papers, technology application guides, a glossary, videos, and SOLUTIONS Linecards.
Anixter’s business model entails designing, developing, and manufacturing its products for its customers.
Anixter’s key partners are the thousands of suppliers that provide it with the products it needs to manufacture its products. These suppliers include manufacturers of communication cabling; connectivity, supply, and support products; electrical wire and cable; and utility products. Approximately one-third of its annual volume purchases is sourced from its five largest suppliers.
Anixter also forms alliances with various industry associations, including BICSI, CCCA, ISO, IEEE,
TIA, NECA, ONVIF, CSIA, and The Green Grid. Its purpose is to stay on top of the latest developments in the industries it serves, including the data center, security, wireless, industrial communication and wire and cabling sectors.
Anixter’s main resources are its human resources, who include the engineers that design, develop, and manufacture its products, the sales employees that promote it, and the customer service employees that provide support. It maintains important physical resources in the form of 320 warehouses/branch locations with nine million square feet of space, and are spread across the United States, Canada, the United Kingdom, Continental Europe, the Middle East, Latin America, Asia, and Australia. Other essential physical resources are as follows:
Infrastructure Solutions Lab – This facility features technical specialists that conduct various types of evaluations, including proof of concept testing and solutions building, independent testing, physical security testing, and data infrastructure product testing. It is the only facility of its nature to be certified by Underwriters Laboratories.
Industrial Communications and Control Module – This facility features technical experts that evaluate potential control and communications solutions specific to industrial environments. These include data centers, wireless solutions, physical security products, and enterprise networks.
SOLUTIONS Briefing Center – This facility conducts demonstrations of the latest technologies while enabling clients to discuss their needs and building solutions.
Anixter has a value-driven structure, aiming to provide a premium proposition through extensive personal service and frequent service improvements. Its biggest cost driver is cost of goods sold, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.
Anixter has one revenue streams: revenues it generates from the sale of its products to its customers.