Cisco Case Study Essay

Cisco Systems is an persistence loss leader in electronic network technology. Their primary business is technology that is employ to change communication with people all(a) oer the world with multiple functions. Whether it be email, voice video or general applications these service atomic number 18 transported over Cisco vanes. The current CEO is John Chambers who has held the position since 1995. This exemplar muse focuses on his vision and strategy over the past 17 years. Cisco is a merchandise leader in networking technology.Financial cultivation www. Bloomberg.com (1)Sales 2012 Sales/Revenue/TurnoverTotal Operating Revenues. $46,681,000,000 pull in Profit $28,558,000,00Net income $ 8,356,000,000Key Milestones in Ciscos new-sprung(prenominal)s report (2)1997 All in One Data/Voice/Video2000 Network of Networks2006 Network as Platform2008-Current Collaboration/ Web 2.0SWOT digestCiscos internal strengths are its people. They have a create a corporation with over 70,00 0 employees. 1/3 of those are frame people who develop Ciscos solutions. (2). These solutions come from internal design or from acquisitions. in that respect weakness is the size of the corporation compared to when they were in in that location 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 trance of technology to their portfolio they at times bypass the development process and postulate a company with the needed expertise. The study banes to the business are the identification number of employees who leave and go to competitors. Many of Ciscos competitors are firing by former Cisco employees. See Juniper.com(7)ANALYSIS VIA PORTERS FIVE FORCES MODELAnalyze the competitive environment by tilt the threat of new entrants, the bar reach outing power of subverters, the bargaining power of suppliers, the threat of substitute products an d services, and the intensity of rivalry among competitors in the industry (Chapter 2). Summarize your pick up points in a Figure. (25 points)Ciscos threat of new entrants is particular(a) due to Ciscos mart cap on network transformation Modular/Fixed (2) . They currently hold a 69% market 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 old bagd on thre volume al secondarys 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 potful gain a competitive reward over the manufacturers. The threat of substitute products is a common theme with Cisco. An example was a Chinese company take Ciscos design and started producing replica hardware. Years of litigation was later on settled stock-still 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 tailor with its competitors is its talent pool. Many of Ciscos engineers leave for competitor with hopes of creating the close generation of technology.STRATEGY USEDCiscos competitive advantage in the switching market has led them into being market leaders in other sectors. Having the market function of the core network as the base layer of Infrastructure allows them to see the need of its customers. These sectors have all been supplicants that give the Cisco core networking products that today has brought them an industry market share in the following sphere of influence. The core strategy used is there boilers suit cost leadership to create this competitive advantagePerformance commercialize share per sectorSecurity 31%Digital Video IPTV-64%Switching Modular/Fixed- 69%Voice-37%Wireless LAN-54%Storage Area Networks-44%Routing Edge/ sum of money/Acce ss-53%Networked Home-23%Web Conferencing-38% (2)One core strategy they used in the area of differentiation was the introduction of Voice over the network. Voice is a bequest technology created over 100 years ago and up until lately 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 down there core unsounded and produce them on IP networks., allowing today the use of voice over your PC Email Text.They were very successful in this space unless not all companies can use this strategy for this particular technology. There install base is so strong the market is saturated and would not be cost effective. This strategy however is now in the due date stage of the industry life cycle. They contain 69% of the voice market and they are continued to grow. The core installations will eventually even up however the service to maintain the phones systems will continue to remain in the matureness 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 build up from the plumbing of the Internetproviding connectivityto the platform that will change the way we work, live, diddle and learn. John Chambers, Chairman and CEO, CiscoTHE ISSUES AND CHALLENGES FACING THIS COMPANYCiscos competitive advantage in some sectors can be maintained. The boilersuit progress should continue however weaker sectors where they have lost focus on have declined. In the example of the home 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 announce they are moving away from the home based market with a sale of thei r Linksys lien to Belkin (5) I reckon the companies competitive advantage can be maintained if they focus on areas where they have control 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 effort they were able to maneuver with market needs more quickly. The fierce tilt in the home market was one of the company problems. I believe that they are an enterprises corporation provider of services and do not transform the needs of home based users.COURSE OF ACTION RECOMMENDEDI would declare oneself 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 through with(p) correctly. Th ey created a virtual server solution called UCS that if markets correctly could achieve proximo 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? name 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. Seeing 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 utilise 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/ ad duce/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+ origin+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)