Recognizing Cisco’s Competition over the Next 15 Years – 2006 – 2012

Topics: Cisco Systems, Router, Competitor analysis Pages: 12 (2566 words) Published: November 13, 2008
Assignment – Recognizing Cisco’s competition

“Recognizing Cisco’s competition over the next 15 years – 2006 – 2012”

Table of Contents

Problem Statement:3
Solution3
Analysis3
Process of identifying competitors of Cisco3
Cisco3
Routers – Product Category4
Common sense and Market share approach4
Competitor Analysis using Analytical Tools5
Table 1: Rivalry among competitors5
Table 2: Barriers to Exit6
Table 3: Barriers to Entry6
Table 4: Threat from substitutes7
Table 5: Bargaining power of buyers7
Table 6: Bargaining power of suppliers7
Table 7: Government actions8
Table 8: Overall assessment9
Competitor Analysis using Creative Tools10
Appendix13

Problem Statement:

Who are the segment, product (Lucent and Nortel migrating from voice) and category level competitors for Cisco Systems, Inc.?(Consider existing as well as future businesses Cisco wants to own and competitors there - Google? Microsoft?)

Solution

Analysis

Firstly we note that for competitive analysis to be effective, it has to be done with a context sensitive view point.

Process of identifying competitors of Cisco

So, we would first try and apply a broad set of analytic tools to identify the competitors of Cisco. We would later proceed to use the tools for identifying Cisco’s competitors using common sense and creative techniques.

We believe that the above exercise will result in a comprehensive list of the competitors of Cisco and would answer the problem statement.

Cisco

Cisco Systems, Inc. caters to diverse consumer segments (Enterprise, Commercial and End consumers) with a diverse range of products. It has classifies its operations into 19 different product categories and each category has a comprehensive product suit.

For the purpose of this analysis, we have selected the Routers product category as our unit of analysis. The methodology developed here could be further applied to other strategic divisions of Cisco Systems, Inc. and we plan to apply it to more product categories during the course of this project.

We would like to perform competitor analysis using the five dimensions given below.

Decisional Altitude – The unit of analysis would be the Router division of Cisco. •Decisional Scope – We would look at the Cisco’s competition from a strategic analysis point of view (and not the tactical or the operational point of view) •Customer/Market Scope – We would be looking at the Router market. Cisco has been traditionally known for routers and it a bridge (a class of routers) was Cisco’s first product. Cisco is the leader in the router business and we would be looking at that. •Produce and Technology Scope – Here again, we would concrete on the Router line of products and would focus on manufacturing the Router, building the software required for it and finally deploying it and maintaining it. •Temporal Dimension – We would look at the previous 5 years and the next 15 years to come up with the possible competitors for Cisco.

Routers – Product Category

A router is a device used to facilitate transfer of data packets between two or more networks. A router acting as a junction between two networks maintains a routing table using which it determines where to forward an incoming data packet. These packets are usually IP (Internet Protocol) packets or ATM (Asynchronous Transfer Mode) packets.

Worldwide market for routers is expected to grow from $9.7 billion to $ 10.8 billion in 2008, compared to $ 8.3 billion in 2005. In the second quarter of 2006, worldwide market for routers grew from $ 2.36 billion to $ 2.47 billion helped by growth in high bandwidth consuming web services like video and music downloads. The market growth is expected to be fueled by upgrading initiatives taken by many phone and cable television companies in response to high demand from end consumers.

It is expected that as time progresses the cost for high bandwidth...
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