Business model of Bechtle

Customer Segments

Bechtle provides IT solutions and supplementary services to all areas of the IT market, regardless of the industry or sector. The Company primarily organises its customers into the following categories:

• Industry and Production;
• Banking and Insurance;
• Construction;
• Trade;
• Service;
• Administration and Public Institutions; and
• Others

Bechtle primarily targets medium-sized businesses, categorised as businesses with 20 to 2,000 computer workstations, but also serves larger enterprises and public sector clients with more than 2,000 workstations.

Geographically, Bechtle’s services extend to customers across Europe. The majority of its clients are active in Germany, Austria and Switzerland.

Value Propositions

Bechtle provides value to its customers in the following ways:

• Its position as a leading distributor in Germany, with a broad domestic network of sales offices and systems houses, as well as a presence in a number of foreign markets in Europe;
• Its network of alliance partners, including partner providers across Japan, China, the US, Australia, Brazil and South Africa that extend the Company’s international reach;
• Its portfolio of third-party software and hardware products, including products from a variety of high-profile production and manufacturing companies; and
• Its varied range of solutions and services, which can be utilised by clients across multiple business and public sectors.

Channels

Bechtle operates a website at www.bechtle.com through which customers are able to find information on the Company’s various services and solutions. Additionally, the Company operates country-specific online stores that enable it to make sales on a regular basis without interference.

Bechtle has its own in-house sales team, also organised geographically, through which it makes the bulk of its sales. This direct sales method, typically completed over the telephone. Bechtle has just over 50 It system houses in 15 federal states in Germany, as well as a number of smaller sales offices.

It also has nine system house locations in seven cantons in Switzerland, five locations in five federal states in Austria, and a single sales office in Brussels, which manages business with the European Union. The Company additionally has 14 further e-commerce units across Europe.

Bechtle’s own direct sales force is supported by a network of channel partners across Europe, including independent software vendors, resellers and distributors.

Customer Relationships

Bechtle offers a range of services and solutions to customers on a self-service basis through its online store. Purchases made in this way can be completed by customers without any intervention from the Company or its representatives. Customers are able to manage their accounts and access their purchase history directly from the website.

Many of the Company’s other services, and the majority of the Company’s sales, are made through direct interaction with the Company’s sales team. Consulting with customers directly allows the Company to get a greater understanding of their customers’s needs before completing a sale so that it is able to provide a more tailored service.

Bechtle provides ongoing customer support and technical assistance to its customers, including through online chat services and telephone enquiries. The Company also operates a news portal, through which it is able to update customers with company and industry developments, and details all of its upcoming events, enabling customers to interact with the Company in person.

In addition, Bechtle manages several social media accounts, including with Facebook, Twitter, YouTube, Instagram, LinkedIn and Xing.

Key Activities

Bechtle is a German information technology service company and e-commerce trader. The Company operates as a reseller and service provider to the public and commercial sectors, active primarily across norther-western Europe.

It serves corporate customers across multiple industries – including the construction, banking and finance, and industry and productions sectors – as well as public institutions and government bodies.

The Company’s activities are divided into two reportable business segments: IT System House and Managed Services, which provides IT strategy consulting, hardware and software, project planning and implementation, systems integration, IT services, and training to small and medium-sized enterprises; and IT E-Commerce, which comprises online, catalogue and telephone-based trading operations. Bechtle acts as a holding company for several operating subsidiaries, including Bechtle Systemhaus Holding, Bechtle Managed Services, Bechtle E-Commerce Holding and Bechtle Holding Schweiz.

Key Partners

Bechtle partners with a number of companies throughout the management of its service chain. These partners primarily comprise companies operating within the technology sector.

Notably, the Company operates a network of strategic partners around the world through which it is able to reach a broader spectrum of clients. Bechtle currently counts nine companies in its Global IT Alliance, selected to meet its service, process and portfolio standards.

This includes regional operators Atea across Scandinavia and the Baltic states, Compucentro in Mexico, Datacentrix in South Africa, Data#3 in Australia, JBS in Japan, JOS across and parts of South East Asia, Lexel in New Zealand, Microware in Brazil, and PC Connection in the US.

Bechtle also partners more broadly with:

• Manufacturers and Software Developers, for which it operates as a distributor and reseller; and
• Channel Partners, that help to extend the Company’s sales and marketing reach.

Key Resources

Bechtle’s key resources are its network of sales and distribution channels, its alliance and supplier partners, its IT infrastructure, and its personnel – particularly its sales and support staff.

Cost Structure

Bechtle incurs costs in relation to the operation and management of its sales and marketing channels, the management of its key partnerships, the maintenance of its IT infrastructure, and the retention of its personnel.

Bechtle has a high proportion of personnel expenses, comprising fixed and variable costs relating to the salaries and benefits of its 5,479 employees, amounting in 2015 to €423 million. In 2015 the Company also recorded distribution costs in the amount of €182.8 million.

Revenue Streams

Bechtle derives its revenue from the provision of various IT and e-commerce services, including the third-party produced sale of software and hardware products – including printers, scanner and monitors – and solutions such as cloud management, client management, IT security and maintenance, server and storage, and networking.

In 2015 Bechtle generated €2,83 billion, up around 9.7% on the €2.58 billion recorded in 2014. This growth was attributed to increased business from foreign companies in the IT E-Commerce segment, as well as growth in the Company’s domestic system house business.

The majority of Bechtle’s revenue was derived from its IT System House and Managed Services segment, which generated €1.89 billion, with the Company’s IT E-Commerce segment generating €941.8 million. Around two thirds of Bechtle’s revenue is generated in its home market of Germany.