International Business Case Study
Cisco Systems is a global market leader and innovator of computer communications and networking solutions. Established in the 1980’s, the company rapidly developed into the world’s greatest manufacturer of internet routers and was/is a foremost provider of commercial communication network devices. The aim of this case study report is to create an understanding of Cisco’s historical international business activities as well as explore their recent and current developments in international business management. The ‘Recent Development’ section details both Cisco’s main strategy of Acquisitions and how the company has operated under and coped with new management.
The report will also address three relevant issues of the organisational internationalisation process and how they relate specifically to Cisco; these issues include Corporate Social Responsibility, Managing change in the International Business and Managing Human Resources on a global scale.
The report concludes with an outline of strategies Cisco may employ in future; detailing both short term and long term plans and objectives that are all possible opportunities that the company could pursue.
2 Recent Development of Cisco’s International Business6 3.1 Acquisitions6
3.2 New Management of Cisco7
3 Issues of Cisco’s Internationalisation Process10
4.3 Corporate Social Responsibility10
4.4 Managing change in International Business12
4.5 Managing Human Resources on a global scale13
4 Future strategy for Cisco15
Cisco Systems, Inc. is one of the world’s leading suppliers of communications and computer networking products, systems, and services. The international business serves three main market segments: large organizations, service providers and small / medium-sized businesses whose needs include operating networks, connecting to the Internet, and connecting with business partners. Increasingly, Cisco's products are appearing in the consumer marketplace. Cisco operates globally, deriving roughly 44 percent of its sales from overseas business.
Cisco Systems was founded in December 1984 in Menlo Park, California, by a husband and wife team from Stanford University, Leonard Bosack and Sandra Lerner. The company was established on a very tight budget and its most notable CEO to date is John Chambers – who assumed his position in 1995. Cisco's initial primary product was the inter-networking router.
The company’s routers initiated support for multiple data transmission standards (protocols), and could therefore link together different kinds of networks. “Cisco thus became the first company to provide a commercial multi-protocol router when it shipped its first product in 1986, a router for the TCP/IP protocol suite ... In 1988, the company began to target its internetworking routers at mainstream corporations with geographically dispersed branches that used different networks ... By the late 1980s, when the commercial market for internetworking began to develop, Cisco's reasonably priced, high-performance routers gave it a head start over the emerging competition” (RFB 2005).
The company quickly began to grow at a tremendous rate and the market – and thus their market share - rapidly expanded. In the early 1990’s Cisco adopted an international business strategy that mainly focused on expansion through acquisition. Cisco began to snap up a variety of companies in an attempt to capture and utilise innovative products and talented employees to their advantage within the company - According to Dunning and Wymbs (2001, p.288) acquisitions counts as Cisco’s main research and development vehicle. “Cisco had acquired 71 companies (mostly start-ups with un-proven products) between 1993 and 2000. With such a large number of...