Cisco Case Study Essay

cisco Systems is an industry leader in network technology. Their primary business is technology that is used to en subject parley with people all everyplace the world with multiple functions. Whether it be email, voice video or general applications these service atomic number 18 transported everyplace lake herring Networks. The authorized CEO is John Chambers who has held the position since 1995. This case study focuses on his vision and strategy over the past 17 years. Cisco is a commercialize leader in networking technology.Financial Information www. Bloomberg.com (1)Sales 2012 Sales/Revenue/TurnoverTotal Operating Revenues. $46,681,000,000Gross Profit $28,558,000,00Net income $ 8,356,000,000Key Milestones in Ciscos History (2)1997 All in One Data/Voice/Video2000 Network of Networks2006 Network as Platform2008-Current Collaboration/ network 2.0SWOT ANALYSISCiscos internal strengths ar its people. They live a built a slew with over 70,000 employees. 1/3 of those are Engin eering people who develop Ciscos solutions. (2). These solutions come from internal design or from acquisitions. at that place weakness is the size of the corporation compared to when they were in on that point early days. They challenges adapting to customer demands at the rapid pace the technology industry changes. The opportunities have come with the use of acquisitions. When they want to add a piece of technology to their portfolio they at times bypass the development process and acquire a company with the needed expertise. The major threats to the business are the number of employees who leave and go to antagonists. Many of Ciscos competitors are run by former Cisco employees. See Juniper.com(7)ANALYSIS VIA PORTERS FIVE FORCES MODEL give way the competitive environment by listing the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in the i ndustry (Chapter 2). Summarize your key points in a Figure. (25 points)Ciscos threat of new entrants is limited due to Ciscos trade detonating device on network Switching Modular/Fixed (2) . They currently hold a 69% mart cap sue to their design and build of these devices. Their competitors have copied and duplicated these products and there are only handful that compete. The bargaining power as a buyer establish on thre volume allows them to keep manufacturing costs low. There suppliers in turn have strong bargaining power with their silicon and chip manufactures.New Chipsets are developed rapidly and suppliers can gain a competitive advantage over the manufacturers. The threat of substitute products is a common theme with Cisco. An example was a Chinese company stole Ciscos design and started producing replica hardware. Years of litigation was later settled however the cost to do so was a major impact. (3)This caused an intense rivalry with its competitor 3Com who partnered with the Chinese company (4). The other issue with its competitors is its talent pool. Many of Ciscos engineers leave for competitor with hopes of creating the next generation of technology.STRATEGY USEDCiscos competitive advantage in the switching market place has led them into being market leaders in other sectors. Having the market share of the burden network as the base layer of Infrastructure allows them to see the need of its customers. These sectors have all been supplicants that utilize the Cisco core networking products that today has brought them an industry market share in the following area. The core strategy used is there overall cost leadership to create this competitive advantagePerformance merchandise share per sectorSecurity 31%Digital Video IPTV-64%Switching Modular/Fixed- 69%Voice-37%Wireless LAN-54%Storage Area Networks-44%Routing Edge/Core/Access-53%Networked Home-23% nett Conferencing-38% (2)One core strategy they used in the area of differentiation was the intro duction of Voice over the network. Voice is a legacy technology created over 100 years ago and up until recently was run with the same original design concepts. Cisco changed that system buy running voice over the IP network. Today VOIP phone systems are a standard and the original POTS (plain old pots lines) are now considered legacy. They used acquisitions to buy phone providers and break spile there core fundamental and produce them on IP networks., allowing today the use of voice over your PC Email Text.They were very successful in this space however not all companies can use this strategy for this particular technology. There install base is so strong the market is gross(a) and would not be cost effective. This strategy however is now in the maturity stage of the industry life cycle. They contain 69% of the voice market and they are continued to grow. The core installations will eventually fall however the service to maintain the phones systems will continue to remain in the maturity stage.Ciscos strategy is based on catching market transitionsthe market transitions that affect our customers. With the proliferation of video and collaborative Web 2.0 technologies, the network continues to evolve from the plumbing of the internetproviding connectivityto the platform that will change the way we work, live, play and learn. John Chambers, Chairman and CEO, CiscoTHE ISSUES AND CHALLENGES FACING THIS COMPANYCiscos competitive advantage in some sectors can be maintained. The overall progress should continue however weaker sectors where they have lost focus on have declined. In the example of the star sign Networked sector they maintain a low 23% market share. This has not been inline what the projections were when they entered these markets. Recently they have announced they are moving away from the home based market with a sale of their Linksys lien to Belkin (5) I believe the companies competitive advantage can be maintained if they focus on areas where the y have come across on market share.Shedding unprofitable business such as Linksys is a step in the right direction. This product is clearly on the decline side and Cisco should focus on growth areas such as storage area networks. The companies culture is changing from when they were a smaller enterprise they were able to maneuver with market needs more quickly. The fierce competition in the home market was one of the company problems. I believe that they are an enterprises corporation provider of services and do not understand the needs of home based users.COURSE OF ACTION RECOMMENDEDI would advise Cisco to focus on server storage sectors. They are not a market leader in servers such as HP but have new products that are changing the way we companies utilize servers. This is a differentiation strategy that will change the industry if done mightily. They created a virtual server solution called UCS that if markets correctly could achieve future growth in the server storage sector. ( 6) I would use my market power and customer to base to provide these solutions at a low cost and this will expose a broad customer base to the productOPINIONWhat do you think of this case study? attract what you believe are the lessons learned from this case. (10 points) I think this case study showed me new concepts in strategic management. By studying Ciscos market dominance based on 46 billion in revenues I now understand that having a competitive advantage must be maintained. visual perception Cisco now leaving markets is a new direction for them and these concepts have brought me to understand that.REFERENCESWhen you have completed the paper using the above sections, insert a page break and have a separate references page. The references should be listed in accordance with the APA guidelines as shown in the tutorial. (5 points)http//www.bloomberg.com/quote/CSCOAR (1)http//newsroom.cisco.com/documents/10157/0/Corporate+Overview+-+Q2FY12.pdf (2) http//www.theregister.co.uk/2004/ 07/29/cisco_huawei_case_ends/ (3) http//www.theregister.co.uk/2003/07/09/3com_welcome_to_join_ciscohuawei/(4) http//www.dailytech.com/Belkin+Plans+to+Purchase+Ciscos+Linksys+Home+Networking+Business+Unit/article29747.htm(5) http//www.cisco.com/assets/global/europe/powerofu/ucs_vs_hp_deployment.pdf(6) http//en.wikipedia.org/wiki/Juniper_Networks(7)