Cisco Systems Business Strategy Essay

9630 words - 39 pages

Cisco Systems Business StrategyExecutive SummaryCisco Systems, Inc. is the worldwide leader in networking for the Internet. Cisco's Internet Protocol-based (IP) networking solutions are the foundation of the Internet and most corporate, education, and government networks around the world. Cisco is famous for its routers and switches that link networks and power the Internet. It also makes network access servers and management software. Although the company is very young, it has achieved an enormous growth in the last decade. The computer networking industry is an extremely fast paced business. Technology is constantly evolving, forcing companies to come up with more innovative products. The customers are well informed about the market and very demanding. They can easily switch from Cisco to one of the numerous competitors. The competition is very tough with more companies moving into the networking industry. The laws and regulations are only starting to form, which makes outcome even more uncertain. However, the rewards are far greater than risks: in 1998, Cisco had net income of more than $1 billion and was growing at 31% rate. The success of the company was due to the groundbreaking research and development, exceptional marketing and excellent staffing.The SWOT analysis reveals that despite on very strong position in the market, Cisco may lose because of high prices, overconfidence and inflexibility. Nonetheless, the economic conditions are favourable and through globalisation and product innovation Cisco will be able to fight its competitors. In order to remain on top of the industry, the company has to constantly decide in what direction to move. The few alternatives that Cisco's management might consider include implementation of the web services, strategic alliance with a telecommunication company, creating networking products for residential use, venturing into United Kingdom, producing software packages and marketing its internal network system. After a careful consideration, a recommended strategy for Cisco would be to develop and market its internal network system, known as a Globally Networked Business System, with addition of an accounting information system.The implementation of this strategy will result in increase of the market share, net profit and customer loyalty. The failure will result in financial disaster, damaged reputation and loss of customer confidence. The execution of this strategy will be most obvious in three functional areas: marketing, research and development and human resources. The process must be closely monitored. Both the Globally Networked Business System and the accounting information system will be expected to come out on the market in 2002.IntroductionCisco Systems Inc. resides in the computer networking industry. Cisco develops networking devices such as switches, routers, network management software, and dial- up access servers. The corporation developed the technology that enabled computers to be...

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