How Slow Economy is Hurting CISCO

Topics: Corporation, United States, Dot-com bubble Pages: 2 (616 words) Published: August 8, 2008

CISCO Corporation is a company that provides software, hardware and services that enable consumers to use the internet. Since its incorporation in 1984 and its IPO in 1990, CISCO has been a front runner in the internet infrastructure business. By spending billions on research and development early on, CISCO has become leading provider of networks services. With over sixty thousand employees worldwide, this company has grown and evolved since its inception in 1984 by a small group of scientist.

The most important problem facing the CISCO Corporation right now is the slowing economy. According to Ephraim Schwartz, we are experiencing “the first ripples in a revolt against consumerism”. CISCO products do not come cheap. A quick search on the popular auction website, www.ebay.com, will bring up routers as inexpensive as $200 for individuals and as high as $133,000.00 for routers for companies. Spending over a hundred thousand dollars on your internet infrastructure is a huge investment.

With the change in spending habits, many companies and individuals may decide that now is not a good time to make changes to their networks or any computer changes. Having an online filing system may not be as much of a priority in 2009 as it was in 2007. Many small companies that would have used CISCO products may be holding off until the economy makes an upswing to purchase products and/or services.

CISCO has been through tough times before. The infamous dotcom boom and then bust at the turn of the decade had many companies who sold CISCO products closing its doors. Many computer related companies were in trouble at that time. Several companies including Sun, Nortel and Lucent, faced uncertain futures. CISCO played it smart. They took their business offshore, investing in China, India and Russia. They staffed lean and mean and held their employees responsible and accountable for their actions. (Jayashankar, Mitu)

For CISCO to weather this next storm,...

References: Hunger, J.D., Wheelen, T.L. (2007). “ Essentials of Strategic Management”. (4th ed.). Upper Saddle River, New Jersey. Pearson Prentice Hall
Schwartz, Ephraim. (2008). “Is the Slow Economy Hurting High-Tech Sales”. Retrieved July 24, 2008 from http://weblog.infoworld.com/realitycheck/archives/2008/03/as_economy_turn.html
Retrieved July 24, 2008 from http://search.ebay.com/cisco_W0QQdfspZ32QQfsooZ2QQfsopZ3QQsbrsrtZd
Retrieved July 24, 2008 from http://newsroom.cisco.com/dlls/corpinfo/corporate_overview.html
Jayashankar, Mitu. “How India Became Attractive to Cisco”. Retrieved July 24, 2008 from http://www.businessworld.in/index.php/Cisco.html
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