Cisco's Loyal Customer Base

1505 Words Jul 29th, 2015 7 Pages
Loyal Customer Base
Cisco has a powerful presence among sizeable corporations, which creates a vast loyal customer base. Cisco has a strong impact over enterprise purchasing decisions, for which several of its IT leaders acquire Cisco products virtually by default. Cisco’s customers perceive the safety of purchasing from a resilient global leader, which gives these corporations the opportunity to acquire WLAN equipment bundled with switches, and other equipment at great prices. The significance of Cisco 's loyal customer base is magnified by the fact that, “through 2017, more than 60% of global revenue from sales of wired and WLAN access infrastructure will continue to come from North America, Western Europe and Japan.”(Gartner)
WEAKNESSES
Dependency on Suppliers and Manufacturers
Cisco has an outsourced manufacturing strategy which creates a considerable dependency on its suppliers and manufacturers for several components. As a result, Cisco does not have a lot of influence on the operations of these manufacturers and there have been some supply chain issues. Some of these issues include delayed order fulfillments, a scarcity of components, and longer lead times on many of its products. Moreover, as a result of previous contracts, the organization is forced to pay higher prices for certain components, reducing the organization’s profit margin.
Global Dependencies
Cisco is extremely dependent on Canada and the US, earning roughly 53% of its total revenue from these two…
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