|Foundations of Business|
But when the telecoms industry hit a downturn, Cisco was one of the worst affected - perhaps in part because of the high gearing that had served it well on the way up. Customer orders fell, production orders continued to go out, raw-parts inventory increased by more than 300% between the third and fourth quarter of 2000. Cisco was forced to write down $2.25 billions.
According to Lakenan, Boyd and Frey, "Cisco simply wasn't able to scale up or down as quickly as it thought it could."
Source: "Why Cisco Fell: Outsourcing and its Perils", by Bill Lakenan, Darren Boyd & Ed Frey, Strategy+Business Third Quarter 2001.
Social Patterns -- What business relationships are implied by such concepts as the virtual supply chain or global virtual manufacturing? What is the nature of these relationships in the Cisco case?
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