the company simply wants to supplement the work carried out by the distribution channel to provide key power retailers with more assistance in terms of areas such as business planning and product positioning. “Our distributors have done a lot of market development even before Toshiba had opened up an office in the region and when we had minimum manpower. Now that we are expanding in the region — with a total strength of between 14 and 16 people — it is time that we directly meet the main partners,” says Varghese. “But when I say ‘directly meet’, what we want do is work with them alongside the distributor on business plans for the year or possibly six months.” Varghese says it is perfectly normal for manufacturers to want close relationships with the second-tier partners that generate the majority of their sales, insisting that it does not alter the part that distributors play in managing the logistics, credit and inventory side of the business. Toshiba operates a tightly-controlled distribution network in the Middle East, with a single wholesaler in most countries expect for Saudi Arabia, where it has moved to an open distribution model in recent years. “Toshiba is a distribution-oriented company and when I say that it is because we have a lot of distributors which have partnered with us for the last 25 to 30 years,” says Varghese. “Like any Japanese company, distribution is considered an extended arm of the vendor.”
Varghese insists Toshiba is now in a position where it has the channel management resources to work more closely with the channel and add value to the overall business. It has identified 10 to 20 retail accounts across the region where it believes it is realistic to develop quarterly plans in conjunction with its distributors. “What we are going for is a semi-direct relationship — we are not signing any direct contracts,” stresses Varghese. Authorised Toshiba distributors operating “The business part is taken care in the Middle East region today of by the Toshiba account managers and the distribution Al-Futtaim UAE account managers, so there is Al Futtaim & Sons Bahrain more transparency and no PC Dealnet Qatar ambiguity,” he adds. Bhawan Trading Oman Over the past few months, the ABM Kuwait Middle East retail channel El Araby Egypt strategies of the leading PC SMS Jordan vendors have come under ABM Saudi Arabia scrutiny, with growing talk that Asbis Saudi Arabia some want to drive direct Redington Saudi Arabia trading relationship with key Jarir Bookstore Saudi Arabia power retail accounts. KSA is (direct retail contract) one market that remains firmly
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Toshiba is a distributionoriented company. We have a lot of distributors which have partnered with us for the last 25 to 30 years under the spotlight, due largely to the existing direct arrangements that most suppliers have with local powerhouse Jarir Bookstore. Varghese admits the nature of the Saudi market calls for a different strategy — as illustrated by its multi-partner approach to distribution in the country — but denies that Toshiba is speaking to any retailers there about a direct trading relationship. “The only direct relationship is with Jarir, which is a power retailer which controls about 70% of the market,” he comments. “That is the only direct relationship with any retailer as of now. At this stage distributors are core business partners for us and I don’t see any immediate changes happening.” As the debate about vendors serving retail accounts directly continues to rage, Toshiba distributors in the region will be hoping Varghese proves to be a man of his word.