first quarter of fiscal 2012, prolonged, supply shortages due to capacity issues or other factors affecting the manufacturing process alter the pricing of these products. If there is a supply shortage, the company may not be able to procure the required components in adequate quantities in a timely manner (Cisco Systems, Inc. SWOT Analysis, 2013). The company may be forced to purchase components at higher than normal prices in the current market due to purchasing commitments. When this happens, its gross margin is affected. Supply chain problems also lead to delays in order fulfillment, impacting company revenues and margins (Cisco Systems Inc. SWOT Analysis, 2013) Cisco faces intense competition in the networking and networking equipment markets communication (Cisco Systems Inc. SWOT Analysis, 2013) .Cisco also faces price competition from rival competitors in Asia, mainly China. The company also faces competition from customers to whom it licenses or supplies technology. The nature of networking requires partnerships; the company must cooperate and at the same time compete with many companies to achieve its goals. Failure to effectively manage these complicated relationships with customers, suppliers and strategic alliance partners could have an adverse effect on Cisco's business. Intense competition will continue to impact Cisco's operating results, financial situation, and market shares of the company in the future (Cisco Systems, Inc. SWOT Analysis, 2013). The political environment in which Cisco operates also presents its challenges. Cisco's alleged involvement in the PRISM surveillance program could cause a major setback in the Chinese market. PRISM is a mass electronic surveillance data mining program operated by...... middle of paper ......2013). Cisco Channel Sales and Inspiration in the Internet Age. Contemporary Logistics, (12), 14-30. Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/1468933047?accountid=3783Orman, N. (2001). Cisco move: risky business. Silicon Valley/San Jose Business Journal, 19(18), 13. Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com/docview/217033005?accountid=3783"Strategic Alliances." Cisco. Np, 3 May 2012. Web. 5 March 2014. La Rete. (2014.). Cisco's. Retrieved March 4, 2014, from http://newsroom.cisco.com/press-release-content?type=webcontent&articleId=1346807The Network. (2014, February 12). Cisco's. Retrieved March 19, 2014, from http://newsroom.cisco.com/release/1346807/Cisco-Reports-Second-Quarter-Earnings