Cisco Stratacom

Cisco Stratacom

CISCO Stratacom BC UA1 1T3 ATM Interface Back Card NEW
CISCO Stratacom BC UA1 1T3 ATM Interface Back Card NEW
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Cisco Stratacom IGX8400 Sys Clock  LEC Card 73 3341 01
Cisco Stratacom IGX8400 Sys Clock LEC Card 73 3341 01
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What are the risk to having a sole sourced supplier for a business?

I've been reading the case study for Cisco systems http://gsbapps.stanford.edu/cases/documents/OIT26.pdf
and one paragraph under suppliers stated:

Summa Four purchased approximately 5,000 individual parts from 250 suppliers, 85 of whom
were new to Cisco. While the Summa Four acquisition was far smaller than the $4.6 billion
acquisition of StrataCom in 1996, Summa Four had a comparable number of parts and suppliers
to StrataCom, reflecting the complexity of the Summa Four integration process. Of some
concern was the fact that approximately 200 of Summa Four’s parts were sole-sourced, meaning
that only one vendor supplied each of those parts, which created a risk to cost and continuity of
supply.

i dont understand how the risk would be "cost and continuity of supply"? can someone help explain to me?

It means that it's risky to depend on one supplier. That supplier can dictate the price as you have no other suppliers as 'competition'. That supplier could go out of business in which case the supply would cease (supply wouldn't continue).
hth