Cisco Case Study

Only available on StudyMode
  • Download(s) : 183
  • Published : January 28, 2013
Open Document
Text Preview
Case Study Report

COMPANY NAME/WEBSITE/INDUSTRY

Cisco Systems/ www.Cisco.Com /Telecommunications Industry

BACKGROUND/HISTORY

Cisco Systems is an industry leader in network technology. Their primary business is technology that is used to enable communication with people all over the world with multiple functions. Whether it be email, voice video or general applications these service are transported over Cisco Networks. The current CEO is John Chambers who has held the position since 1995. This case study focuses on his vision and strategy over the past 17 years. Cisco is a market leader in networking technology.

Financial Information: www. Bloomberg.com (1)
Sales 2012 Sales/Revenue/Turnover:
Total Operating Revenues. $46,681,000,000
Gross Profit $28,558,000,00
Net income $ 8,356,000,000

Key Milestones in Cisco’s History (2)
1997 All in One: Data/Voice/Video
2000 Network of Networks
2006 Network as Platform
2008-Current Collaboration/ Web 2.0

SWOT ANALYSIS

Cisco’s’ internal strengths are its people. They have a built a corporation with over 70,000 employees. 1/3 of those are Engineering people who develop Cisco’s solutions. (2). These solutions come from internal design or from acquisitions. There weakness is the size of the corporation compared to when they were in there early days. They challenges adapting to customer demands at the rapid pace the technology industry changes. The opportunities have come with the use of acquisitions. When they want to add a piece of technology to their portfolio they at times bypass the development process and acquire a company with the needed expertise. The major threats to the business are the number of employees who leave and go to competitors. Many of Cisco’s competitors are run by former Cisco employees. See Juniper.com(7)

ANALYSIS VIA PORTER’S FIVE FORCES MODEL

Analyze the competitive environment by listing the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in the industry (Chapter 2). Summarize your key points in a Figure. (25 points)

Cisco’s’ threat of new entrants is limited due to Cisco’s market cap on network Switching: Modular/Fixed (2) . They currently hold a 69% market cap sue to their design and build of these devices. Their competitors have copied and duplicated these products and there are only handful that compete. The bargaining power as a buyer based on thre volume allows them to keep manufacturing costs low. There suppliers in turn have strong bargaining power with their silicon and chip manufactures. New Chipsets are developed rapidly and suppliers can gain a competitive advantage over the manufacturers. The threat of substitute products is a common theme with Cisco. An example was a Chinese company stole Cisco’s design and started producing replica hardware. Years of litigation was later settled however the cost to do so was a major impact. (3)This caused an intense rivalry with its competitor 3Com who partnered with the Chinese company (4). The other issue with its competitors is its talent pool. Many of Cisco’s engineers leave for competitor with hopes of creating the next generation of technology.

STRATEGY USED

Cisco’s competitive advantage in the switching market has led them into being market leaders in other sectors. Having the market share of the core network as the base layer of Infrastructure allows them to see the need of its customers. These sectors have all been supplicants that utilize the Cisco core networking products that today has brought them an industry market share in the following area. The core strategy used is there overall cost leadership to create this competitive advantage

Performance Market share per sector
Security 31%
Digital Video: IPTV-64%
Switching: Modular/Fixed- 69%
Voice-37%
Wireless: LAN-54%
Storage: Area Networks-44%
Routing:...
tracking img