So What?
Allred knew that Cisco was a high touch vendor but worried that the company’s reorganization would hurt its ability to maintain and develop customer loyalty. CFI sounded ambitious, but Cisco faced real, ongoing challenges. While Cisco had so far managed to preserve share in a shrinking market, its position no longer felt as secure. Allred had just read that Cisco’s market share in core routers slid in the fourth quarter of 2002 by seven percentage points, to 73%. One competitor, Juniper Networks, accounted for the entire loss. At the same time, Cisco’s average price per LAN port was $132, significantly higher than the industry average of $75.15 While Cisco could argue that its customers were buying a relationship rather than a router, it was up to Allred to ensure that the value of that relationship justified the Cisco premium.