first quarter of FY2012, prolonged, shortages in supplies due to capacity issues or other factors affecting the manufacturing process alter the price of these products. When there is a shortage in supplies the company may not be able to source required components in adequate quantities in a timely manner (Cisco Systems, Inc. SWOT Analysis, 2013).The company may be obligated to purchase components at higher than normal prices in the current market because of purchase commitments. When this happens its gross margin is affected. Supply chain issues also lead to delay in order fulfillment, affecting the revenues and margins of the company (Cisco Systems Inc. SWOT Analysis, 2013)
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Strong opposition from China could dent the company’s Chinese business and impact its growth. These allegations can result in a negative impact on its growth prospects in other international markets considering serious threat to the information security (Cisco Systems, Inc. SWOT Analysis, 2013).
Cisco is in a pending litigation with the Brazilian federal tax authorities. Brazilian authorities investigated Cisco’s Brazilian subsidiary and some of its current and former employees, as well as a Brazilian importer of the company’s products, and its affiliates and employees, relating to alleged evasion of import taxes and alleged improper transactions involving the subsidiary and the importer (Cisco Systems Quarterly report, 2012).
At the end of FY2013, the total claims by Brazilian state and federal tax authorities were approximately $385 million for the alleged evasion of import taxes, approximately$1.1 billion for interest, and approximately $1.7 billion for various other penalties (Cisco Systems Quarterly report, 2012). Any negative outcome in these litigations could force the company to pay heavy penalties, which would further impact its financial performance (Cisco Systems Quarterly report, 2012).
Despite all the challenges that Cisco faces in the markets in which it operates worldwide they have not lost focus on the whole idea of giving back to the communities in which it operates. Cisco has been recognized with several awards for its corporate and social responsibilities. Cisco has also been voted as one of the top ten companies to work for. They have received awards for corporate social responsibility (CSR) programs and practices on environmental sustainability, governance and ethics, social investment programs, corporate citizenship and social responsibility (CSR Awards and Recognition, 2013).
Cisco will continue to face significant risk in the markets in which it operates; however we can expect the company to grow exponentially as a result of the strength of its management team and the different marketing strategies that it employs.
Acquisition Summary. (2014). Cisco. Retrieved March 12, 2014, from...