Market Analysts are describing Cisco Systems as ‘in a slump’. That’s hard to paste on a global darling that hasn’t lost money in an 11 year run, except for last quarter (a big $2.9B loss). But there’s no denying that rivals are outpacing the company, in their dominant markets, while Cisco ponders their next move.Unfortunately for Mr. Chambers, a turnaround could take time. Even their Q3 profit announced last week did little for their stock price. In after hours trading after their announcement, Mr. Chambers acknowledged he’s seeing a weak Q4 and global layoffs are planned in June. The ‘slump’ began last year when Cisco’s sales started to show weakness which Mr. Chambers initially attributed to the sour economy. When profits continued to wither quarter after quarter, Mr. Chambers alternately blamed a decline in government spending and a “transition” after the introduction of new switches for computer networks. But some customers and analysts said Cisco's problems can be traced directly to an arrogant and even lazy sales force, which is too used to taking orders rather than aggressively selling and serving customers. "They got fat and happy and got into just taking orders," said Aaron Goldberg, industry analyst and vice president of Ziff Davis Media Inc. "Turning this around is going to be hard, and if they trip, this is where it will happen." Others flat out question the innovation-by-acquisition strategy that has been the hallmark of Chambers' regime.
