Supply and Demand and Cisco Systems

Topics: Supply and demand, Router, Cisco Systems Pages: 5 (755 words) Published: October 14, 2014
1. Discuss the nature of the market structure and the demand for Cisco’s products.

The nature of the market structure and demand of Cisco Systems is its business market which

contains fewer bvut larger companies. For Cisco Systems, this implies that even though they have

fewer clients than other companies, they still have a good and profitable relationship with their

clients. For the customers of Cisco Systems, this implies that they will receive better and faster

service and products because they don’t have to compete for the attention and service of Cisco


The business market is derived from final consumer demand which means Cisco Systems must

know what the market demands from their business customers. For Cisco Systems, this implies

that Cisco must depend on the final consumer market, in order for their customers to buy their

supplies. This also means that Cisco Systems must also promote the products of their partner

businesses in order to get the final customers attention and loyalty to their partners in order for

them to get gain. For the customers of Cisco Systems, this implies that they would have to depend

on their customers choices if they are willing to buy their product or not. The demand of the

final customers would be the basis of the customers of Cisco Systems if they would ask for more

supply from Cisco Systems or not.

The business market’s demand is more inelastic, which means that it is not affected as much in

the short run by price changes. For Cisco Systems, this implies that they would not be affected

that much and their production of the supplies and demand for the supplies would remain the

same even though there are short run price changes.

2. Given the industries in which Cisco competes, what are the implications for the major types of

buying situations?

Straight rebuys—because Cisco deals in high-tech, there may be few truly straight rebuys. This

is due to the fact that as purchase cycles come up, technology has changed. As a result, corporate

buyers are looking at slightly different to extremely different products to replace the ones that

they have. Straight rebuys are likely to occur when a company buys a set of routers or switches

shortly after purchasing the same items. This may be due to a gradual rollout replacement or an


Modified rebuy—many of Cisco’s products will fall into this situation. Clients replace existing

routers and switches with new spec models. Cisco’s services may also fall into this classification

if this is something that a client has previously purchased.

New-task—many of Cisco’s products and most of its services fall into this classification. For

example, when Gale International, the construction company for New Songdo City, contracted

Cisco to supply the technology needs for the city; this was an all-new venture. From the

architecture to the hardware to the services, these represented new-tasks. Many companies

getting in to collaboration consulting services are doing so for the first time in a similar manner

3. What specific customer benefits will likely result from the Cisco products mentioned in

the case?

• Routers and switches—keep data flowing efficiently.

• Cybersecurity devices—protect proprietary information from being hacked

• Videoconferencing tools—allow employees to interact across distances

• Collaboration services—help clients better collaborate with employees, suppliers,

partners, and customers. Some resulting benefits are reduced time in bringing products and

services to market, reduced expenses, and strong customer relationships.

4. It should already be apparent that Cisco buying situations are much more complex than

consumer buying processes. Therefore, it is important that students recognize that customers

involved will go through a very extensive buying process....
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