Cisco shakes up distribution strategy
Fewer top-tier wholesalers
Updated Cisco has announced a shake up in its distribution strategy in EMEA (Europe Middle East and Africa) which means many of its disties will no longer deal with product procurement, effectively demoting their status.
After February 2002, Cisco's Western European wholesalers are organised into two tiers: seven Cisco Distribution Partners (CDPs), which have a direct purchasing relationship with the company; and 10 Cisco Authorised Distributors (CADs), which have a relationship with Cisco but procure kit from a CDP.
The seven CDPs are: Acal, Algol, Azlan, Comstor, Ingram Micro, PC Lan and Techdata/C2000 (so all UK disties have become CDPs).
The remaining 40 distributors in E-EMEA (Eastern Europe, the Middle East and Africa) will continue with the current distribution contracts until Cisco implements its new strategy (CDPs and CADs) in those regions. Cisco has 28,000 resellers in EMEA.
Cisco said the purpose of the changes was to maximise the efficiency of its 2-tier channel model, and increase the availability of product to end-users while reducing the costs for its distribution partners. ®
Based on an ambiguous Cisco Power Point presentation, we earlier reported that Cisco's 57 wholesalers had been culled down to 17. This is incorrect because the 40 distributors not mentioned are still working with Cisco (although their status [CDP or CAD] in the new set-up is yet to be decided).
Rather than talking about a cull it is more accurate to say that a number of Cisco wholesalers (those with a lesser competency in logistics and inventory management) have been demoted.