Marcelo Claure - Brighstar CEO - speaks to Mobile

Marcelo Claure - Brighstar CEO - speaks to Mobile

Having never met or even seen pictures of Marcelo Claure, Mobile is forced to scan the lobby at The Lanesborough hotel and make speculative guesses.

It becomes clear that it is the slightly stooping giant jabbing away at a limited-edition gold Motorola.

He is the founder, president and CEO of Brightstar - the world's biggest distributor of mobile phones.

Bolivian-born Claure presides over a company in 49 countries, which had a turnover of £6bn this year, shipping 60 million handsets.

Claure is in London for just one day before he flies back to Brightstar's HQ in Miami.

He won't name names, but the short visit last Tuesday included a series of visits to potential customers and suppliers in the UK and Europe.

Claure had lunch earlier in the day with his European chief, Rod Millar. He has dinner plans with another potential customer, but has squeezed Mobile in for an interview in the hotel bar first. He gets through two drinks and is popping nuts and crisps at a furious pace in between firing off endless facts and figures ranging from BlackBerry sales in Latin America to tax laws in India. It's hard to keep up and not get sidetracked.

Number one in three years
Claure is remarkably honest about targets. It is accepted wisdom not to publicly set goals to avoid ending up with egg on your face if it doesn't happen. Claure not only sets out his specific objectives, but gives time frames too.

'In three years, we want to be the number one. Make no mistake; we're not here just to be a small player. We're here to win.'

What about a more immediate target? One year, for example. Claure doesn't pause after hearing the question. 'We want to sell to 80% of the open market [dealers] in 12 months' time. We want to supply one wireless retailer [Carphone Warehouse, Phones 4u] and a couple of MVNOs or operators. We want them to out-source their supply business to us.'

It is an audacious 12-month plan. Claure casually pops more cashews into his mouth.

The next most logical question is how will Brightstar achieve his target?

Established UK distributors currently seem to be hanging on by their fingernails. Dealers are being squeezed out and the big retailers and networks are dealing directly with the manufacturers. Both retailers and manufacturers have invested heavily in sharpening their supply chain - managing the movement of stock, consequently questioning the value of distributors. It seems insane to enter this market in the current climate.

Deals with all but one of the top four manufacturers (Nokia, Samsung, Sony Ericsson and Motorola) will be sealed by January. Nokia is the exception. Claure won't comment, but it is believed that the close rapport between 20:20 and Nokia may be delaying a potential deal.

But why should these manufacturers give Brightstar a supply deal? Manufacturers have spoken pejoratively about distributors in general, but Claure says there is something missing from the UK incumbents: 'They are not generating demand or bringing in new channels.'

Attack on price
As far as customers go, Claure says that Brightstar will attack on price and service, confounding 20:20's view that the UK market cannot go lower on price. He says not only will Brightstar undercut the incumbent distributors, but it will be cheaper than the networks can do it themselves. He claims that the service will also be far superior to anything the networks or retailers have seen before or can do themselves.

'Our job is to delight our customers. We will bring genuine innovation to the UK when it comes to service and price. As far as I'm concerned, distributors shouldn't be in business if they can't provide cheaper, faster and more efficient service.'

The foundation of his claims are rooted in the tie-up with Tech Data, the IT distributor Brightstar agreed a deal with in February. The deal involved sharing each others' resources and buying power, and, critically for Brightstar, each others' systems and customer databases.

As far as price is concerned, there are natural economies of scale where Brightstar can leverage its colossal global buying power. It is also piggybacking on Tech Data's systems and personnel, so these costs don't come out of Brightstar's bottom line.

'The only wireless specific personnel we have are salespeople. [In contrast,] Finance, HR, operations... that's all using Tech Data's resources. This is a volume business and when you consider we don't have the fixed costs of the established players, we have a real competitive advantage when it comes to pricing.'

The proposition to networks and retailers is that the real saving goes way beyond the price per handset at the time of the deal.

'We have the systems and expertise to deliver [handsets] to 500,000 points in Europe by 10am if the order is made before 4pm the previous day. Tech Data has the most sophisticated “just in time” systems of anyone out there, and the savings we can make to an operator's inventory cost are huge. We can save them money by being more efficient.'

But are operators and the big retailers willing to give a further leg-up to a distributor as powerful as Brightstar simply for shaving off a few pounds here and there?

'We know there is interest because they are wide open to talking to us.'

Although he seems utterly confident that Brightstar's brand of distribution has not been seen in these parts so far, Claure is conscious that the company's success has invariably relied on bulldozing through virgin markets.

'We sat down and thought about which areas to attack. First Latin America, then the US, then Australia, Asia-Pacific, India, Middle East, Africa, and now Europe. The reason we left Europe to last is because there are established companies here and the cost of entry is high. It would have been very difficult and very costly without Tech Data.'

Giving customers an edge
Claure maintains that the hardest task is removing preconceived ideas of distribution from potential customers.

These claims have been heard before, with attempts to sell the 'adding value' story often repeated, but falling short on countless occasions by distributors in the past.

Claure claims that Brightstar has a track record that speaks for itself when it comes to giving operator and retailer partners an edge over their competitors on price, stock availability, exclusive handsets, first-to-market products, and lots of other services he fires off.

The obvious question is how does Claure juggle several customers all vying against each other? 'We have always aimed to have fewer, deeper relationships with certain customers rather than serve everyone.'

Brightstar supplies almost all the phones in Latin America, the majority in the US and handles all of Australian carrier Telstra's handsets.

A distribution centre was opened at Magna Park, near Leicester, earlier this year. It has been described by manufacturers who have visited it as 'different class' and 'well ahead of the competition'. Claure, meanwhile, says: 'It's highly robotised with less costs [associated with salaries], so we can undercut on deals and still be profitable.

'If you look at Tech Data's systems, mobile distributors are still in diapers comparatively.'

Pan-European
There's a new dimension to distribution now, Claure says, which makes Brightstar a more compelling proposition for both customers and suppliers.

'We are the only pan-European distributor with 16 countries. It allows us to try every market, and then stick to the ones we can make a profit from.'

So, Brightstar's UK targets are operators, virtual networks, specialist retailers, high str

Written by Mobile Today
Mobile Today

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