Cisco Systems, Inc.

1431 Words Jun 3rd, 2016 6 Pages
Cisco Systems, Inc.
A potential competitive disadvantage for Cisco is supply chain issues. Supply chain issues such as delays in order fulfillment can affect Cisco’s business because the company is significantly dependent on suppliers and contract manufacturers for certain components. Due to its outsourced manufacturing strategy, Cisco has limited control over the delivery schedules and has suffered from component shortages as a result of manufacturing process issues. Additionally, the earthquakes and tsunami in Japan prompted an industry-wide component supply constraints in 2011 and the flooding in Thailand in 2012. Supply chain issues may lead to a delay in order fulfillment that can affect the revenues and margins of the company.
A potential parity for Cisco systems is competition with Huawei. Cisco Systems over the past couple of years has seen the competition in the networking space grow rapidly, from the likes of Hewlett-Packard, Juniper Network, Avaya, and Arista Networks. However, Huawei Technologies is the competitor that apparently is most on the mind of Cisco’s CEO John Chambers. Huawei Technologies is a Chinese networking company that has made a strong push into the North American market, hoping to grab some market share from Cisco and other vendors. Over the past couple of years, vendors like HP and Juniper have positioned themselves as lower-cost alternatives to Cisco and have succeeded in stealing away some share in the switch and router markets.
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