There is only one year for Cisco to launch the Viking product to market with low cost. Otherwise, the market share might loss. However, it is about 3 to 5 years for Cisco to launch a high-end product. To meet such tighten schedule, it’s imperative for Cisco team to perform a very collaborative operation and concurrent engineering in whole supply chain and NPI phase 1-2Cost pressure
Bandwidth prices were constantly falling and customer expected continuous improvements in price-performance on their equipment. The competitor keeps intensive discount on price. Cisco had to implement most cost effective-supply chain at launch and product design. 1-3Technical complexity handling in contract manufacturing
The product router contained about 300,000 components, about 30 times more than in a small business router. How to successfully launch such a high complexity product in a low cost contract manufacturer like Foxconn requires Cisco monitor and cooperate with CM carefully. 1-4Continuous cost down pressure from emerging market
Cisco needed to ensure that router would be attractive to service profiders worldwide. Emerging markets were the fastest-growing part of Cisco’s business, which need lower cost. 2.In selecting Foxconn and involving it from the start (instead of doing a production launch in the US first before transferring production to China), what were the potential risks and values to Cisco? Potential risk:
-Technical risk-Foxconn didn’t produce such complex product which may fail in fulfillment Cisco’s requirement in product quality and reliability. -Foxconn has no experience on produce such complex product like Viking, which require Cisco spend lots of efforts, time and resource to develop with learning curve without guarantee on success. -Foxconn failure in manufacturing qualified product to meet Cisco’s requirement will cause Cisco...