With 34,000 employees, Cisco Systems was the world's largest manufacturer of routers and switches in the early 2000s. Both form an integral part of the networking technology used to connect users to the Internet. Roughly 80 percent of the firm's revenues stem from transactions completed on Cisco's Web site, which is considered to be one of the most successful business-to-business sites in the world. Although sales in 2001 grew 17.8 percent to $22.2 billion, Cisco posted a loss of more than $1 billion. Management blamed this on a steep drop in orders—fueled by cuts in spending, particularly in the telecommunications sector—which left the firm with high levels of inventory.
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