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Working of Cisco Systems SWOT Analysis

Cisco Systems
Cisco Systems
Networking the Internet
Revolution
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Working of Cisco Systems SWOT Analysis
1.ABOUT CISCO SYSTEMS

Cisco is an American multinational corporation that designs and sells consumer electronic,
networking, voice and communications technology services. The company was one of the
first to sell commercially successful routers that supports multiple network protocols.
Cisco Systems, Inc. is an American multinational corporation headquartered in San Jose,
California, that designs, manufactures, and sells networking equipment. The stock was added
to the ow Jones Industrial Average on June !, "##$, and is also included in the S%&
'## Inde(, the )ussell *### Inde(, +ASA,-*## Inde( and the )ussell *### .rowth Stock
Inde(.
1.1 History
/ne of the many 0uildings on the Cisco Systems campus in San Jose
*$!12*$$'3 early years
Cisco Systems was founded in ecem0er *$!1 0y 4eonard 5osack, who was in charge of
the Stanford 6niversity computer science department7s computers, Sandy 4erner, who
managed the .raduate School of 5usiness7 computers, and )ichard Troiano. espite
founding Cisco in *$!1, 5osack, along with 8irk 4ougheed, continued to work at Stanford
on Cisco7s first product which consisted of e(act replicas of Stanford7s 95lue 5o(9 router and
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Working of Cisco Systems SWOT Analysis
a stolen copy of the 6niversity7s multiple-protocol router software, originally written some
years earlier at Stanford medical school 0y :illiam ;eager< a Stanford research engineer <
which they adapted into what 0ecame the foundation for Cisco I/S. /n July **, *$!=,
5osack and 8irk 4ougheed were forced to resign from Stanford and the university
contemplated filing criminal complaints against Cisco and its founders for the theft of its
software, hardware designs and other intellectual properties. In *$!>, Stanford licensed the
router software and two computer 0oards to Cisco.
In addition to 5osack, 4erner and 4ougheed, .reg Sat?, a programmer, and )ichard Troiano,
who handled sales, completed the early Cisco team. The company7s first C@/ was 5ill
.raves, who held the position from *$!> to *$!!. In *$!!, John Aorgridge was appointed
C@/.
The name 9Cisco9 was derived from the city name, San Brancisco, which is why the
company7s engineers insisted on using the lower case 9cisco9 in its early years. The logo is
intended to depict the two towers of the .olden .ate 5ridge.
/n Be0ruary *=, *$$#, Cisco Systems went pu0lic Cwith a market capitali?ation of
D""1 millionE and was listed on the +ASA, stock e(change. /n August "!, *$$#, 4erner
was firedF upon hearing the news, her hus0and 5osack resigned in protest. The couple walked
away from Cisco with D*># million, >#G of which was committed to their own charity.
Although Cisco was not the first company to develop and sell dedicated network nodes, it
was one of the first to sell commercially successful routers supporting multiple network
protocols. Classical, C&6-0ased architecture of early Cisco devices coupled with fle(i0ility
of operating system I/S allowed for keeping up with evolving technology needs 0y means of
frequent software upgrades. Some popular models of that time Csuch as Cisco "'##E managed
to stay in production for almost a decade virtually unchanged<a rarity in high-tech industry.
Although Cisco was strongly rooted in the enterprise environment, the company was quick to
capture the emerging service provider environment, entering the S& market with new, high-
capacity product lines such as Cisco >### and Cisco >'##.
5etween *$$" and *$$1, Cisco acquired several companies in @thernet switching, such
as 8alpana, .rand Junction, and most nota0ly, Aario Aa??ola7s Crescendo Communications
which together formed the Catalyst0usiness unit. At the time, the company envisioned layer
H routing and layer " C@thernet, Token )ingE switching as complementary functions of
different intelligence and architecture<the former was slow and comple(, the latter was fast
0ut simple. This philosophy dominated the company7s product lines throughout the *$$#s.
In *$$', John Aorgridge was succeeded 0y John Cham0ers.
*$$=2"##$3 Internet and silicon intelligence
The phenomenal growth of the Internet in mid-to-late *$$#s quickly changed the telecom
landscape. As the Internet &rotocol CI&E 0ecame widely adopted, the importance of multi-
protocol routing declined. +evertheless, Cisco managed to catch the Internet wave, with
products ranging from modem access shelves CAS'"##E to core .S) routers that quickly
0ecame vital to Internet service providers and 0y *$$! gave Cisco de facto monopoly in this
critical segment.
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Working of Cisco Systems SWOT Analysis
In late Aarch "###, at the height of the dot-com 0u00le, Cisco 0ecame the most valua0le
company in the world, with a market capitali?ation of more than 6SD'## 0illion. In July
"#*1, with a market cap of a0out 6SD*"$ 0illion, it is still one of the most valua0le
companies.
Aeanwhile, the growth of Internet 0andwidth requirements kept challenging traditional,
software-0ased packet processing architectures.
The perceived comple(ity of programming routing functions in silicon, led to formation of
several startups determined to find new ways to process I& and A&4S packets entirely in
hardware and 0lur 0oundaries 0etween routing and switching. /ne of them, Juniper
+etworks, shipped their first product in *$$$ and 0y "### chipped away a0out H#G from
Cisco S& Aarket share. Cisco answered the challenge with homegrown ASICs and fast
processing cards for .S) routers and Catalyst ='## switches. In "##1, Cisco also started
migration to new high-end hardware C)S-* and software architecture I/S-I).
"##=2"#*"3 The Juman +etwork
As part of a massive re0randing campaign in "##=, Cisco Systems adopted the shortened
name 9Cisco9 and created 9The Juman +etwork9 advertising campaign.
K"#L
These efforts
were meant to make Cisco a 9household9 0rand<a strategy designed to support the low-end
4inksys products and future consumer products Csuch as Blip Mideo camera acquired 0y Cisco
in "##$E.
/n the more traditional 0usiness side, Cisco continued to develop its e(tensive enterprise-
focused routing, switching and security portfolio. ,uickly growing importance
of @thernet also influenced the company7s product lines, prompting the company to morph
the successful Catalyst ='## @thernet switch into all-purpose Cisco >=## routing platform.
K"*L
Jowever, limits of I/S and aging Crescendo architecture also forced Cisco to look at
merchant silicon in the carrier @thernet segment. This resulted in a new AS)$### product
family intended to consolidate company7s carrier ethernet and su0scri0er management
0usiness around @NChip-0ased hardware and I/S-I). Cisco also e(panded into new markets
0y acquisition<one e(ample 0eing a "##$ purchase of mo0ile specialist Starent
+etworks that resulted in AS)'### product line.
A Cisco facility in Chennai,India. India is one of the company7s largest overseas markets and
production centers.
Throughout the mid-"###s, Cisco also 0uilt a significant presence in India, esta0lishing its
.lo0ali?ation Centre @ast in 5engaluru for D* 0illion, and planning that "#G of Cisco7s
leaders would 0e 0ased there.
Jowever, Cisco continued to 0e challenged 0y 0oth domestic Alcatel-4ucent, Juniper
+etworks and overseas competitors Juawei. ue to lower-than-e(pected profit in "#**,
Cisco was forced to reduce annual e(penses 0y D* 0illion. The company cut around H,###
employees with an early-retirement program who accepted 0uyout and planned to eliminate
as many as *#,### Oo0s Caround *1 percent of the >H,1## total employees 0efore
curtailmentE. uring the "#** analyst call, Cisco7s C@/ John Cham0ers called out several
competitors 0y name, including Juniper and J&.
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/n "1 July "#*", Cisco received approval from the @6 to acquire +S Ca TM software
developerE for 6S ' 0illion. This acquisition signaled the end of the 9The Juman +etwork9
strategy as Cisco found itself 0acking off from household hardware like 4inksys
K">L
and Blip
into the cloud and software market.
"#*H2&resent3 The Internet of @verything
Cisco launches its first glo0al re-0randing campaign for the first time in si( years with its
9T/A/))/: starts here9 and 9Internet of @verything9 advertising campaigns. These
efforts were designed to position Cisco for the ne(t ten years into a glo0al leader in
connecting the previously unconnected and facilitate the I& address connectivity of people,
data, processes and things through cloud computing applications and services.
/n July "H, "#*H, Cisco Systems announced a definitive agreement to acquire Sourcefire for
D".> 0illion.
/n August *1, "#*H, Cisco Systems announced it is going to cut 1,### Oo0s, which is roughly
=G of the company, starting in "#*1.
Cisco is opening an Internet of @verything research centre in Toronto, /ntario.
In April, "#*1, Cisco Systems announced D*'# Aillion to fund early-stage firms around the
glo0e to focus on the Internet of @verything. The investment fund was allocated to
investments in IoT accelerators and startups such as The Alchemist Accelerator, Ayla
+etworks and @M);TJ+.. After the announcement, The Alchemist Accelerator announced
Cisco as a strategic partner and launched an individual program specifically focused on
advancing the growth of IoT startups. This new funding increased Cisco Investments7
thematic investing to D"'# million total, adding to the previously announced D*## million
commitment to startups focused on the emerging Internet of @verything CIo@E market
opportunity.
Cisco Systems has seen a huge drop in e(port sales 0ecause of spying fears from the
American +ational Security Agency using 0ackdoors in its products.
/n August *H, "#*1, the company announced it was laying off another =,### workers or !G
of its glo0al workforce, as part of a second restructuring.
1.2 Media and awards
Cisco products, most nota0ly I& phones and Telepresence, are frequently sighted in movies
and TM series. The company itself and its history was featured in the documentary
film Something Mentured which premiered in "#**.
Cisco was a "##"2#H recipient of the )on 5rown Award, a 6.S. presidential honor to
recogni?e companies 9for the e(emplary quality of their relationships with employees and
communities9. Cisco commonly stays on top of Bortune 9*## 5est Companies to work for9,
with position +o. "# in "#**.
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1.3 Acqisitions
Aain article3 4ist of acquisitions 0y Cisco Systems
Cisco acquired a variety of companies to spin products and talent into the company. In *$$'2
*$$= the company completed ** acquisitions. Several acquisitions, such as Stratacom, were
the 0iggest deals in the industry when they occurred. uring the Internet 0oom in *$$$, the
company acquired Cerent Corporation, a start-up company located in &etaluma, California,
for a0out 6SD> 0illion. It was the most e(pensive acquisition made 0y Cisco to that date, and
only the acquisition of Scientific Atlanta has 0een larger. In *$$$ Cisco also acquired stake
for D* 5illion in 8&A. Consulting to ena0le esta0lishing Internet firm Aetrius founded 0y
8eyur &atel of Buse. Several acquired companies have grown into D*5nP 0usiness units for
Cisco, including 4A+ switching, @nterprise Moice over Internet &rotocol CM/I&E
platform :e0e(, and home networking. The latter came as result of Cisco
acquiring 4inksys in "##H and in "#*# was supplemented with new product line
du00ed Cisco Malet.
Cisco announced on January 1, "##> that it would 0uy Iron&ort in a deal valued at 6SD!H#
million and completed the acquisition on June "', "##>.
K11L
Iron&ort was 0est known for its
Iron&ort AntiSpam, its Sender5ase email reputation service, and its email security appliances.
Accordingly, Iron&ort was integrated into the Cisco Security 0usiness unit. Ironport7s
Sender0ase was renamed as Sensor0ase to take account of the input into this data0ase that
other Cisco devices provide. Sensor5ase allows these devices to 0uild a risk profile on I&
addresses, therefore allowing risk profiles to 0e dynamically created on http sites and SAT&
email sources.
Cisco announced on Aarch *', "#*" that it would acquire +S .roup for D'5. The
transaction was completed on July H#, "#*".
In more recent merger deals, Cisco 0ought Starent +etworks Ca mo0ile packet core companyE
and Aoto evelopment .roup, a product design consulting firm that helped develop Cisco7s
Blip video camera. Also in "#*#, Cisco 0ecame a key stakeholder in e-Skills :eek. In Aarch
"#**, Cisco completed the acquisition of privately held network configuration and change
management software company &ari +etworks.
Although many 0uy-ins Csuch as Crescendo +etworks in *$$H, Tand0erg in "#*#E resulted in
acquisition of flagship technology to Cisco, many others have failed<partially or completely.
Bor instance, in "#*# Cisco occupied a meaningful share of the packet-optical
market, revenues were still not on par with 6SD> 0illion price tag paid in *$$$ for Cerent.
Some of acquired technologies Csuch as Blip from &ure igitalE saw their product lines
terminated.
In January "#*H, Cisco Systems acquired Israeli software maker Intucell for around D1>'
million in cash, a move to e(pand its mo0ile network management offerings. In the same
month, Cisco Systems acquired Cognitive Security, a company focused on Cy0er Threat
&rotection. Cisco also acquired Solveirect Ccloud servicesE in Aarch "#*H and 60iquisys
Cmo0ile softwareE in April "#*H.
Cisco acquired cy0er-security firm Sourcefire, in /cto0er "#*H.
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/n June *=, "#*1, Cisco announced that it has completed the acquisition of threat.)I, a
company that provided dynamic malware analysis and threat intelligence technology.
/n June *>, "#*1, Cisco announced its intent to acquire privately held Tail-f Systems, a
leader in multi-vendor network service orchestration solutions for traditional and virtuali?ed
networks.
1.! "rodcts and ser#ices
Cisco7s products and services focus upon three market segments<@nterprise and Service
&rovider, Small 5usiness and the Jome.
1.$ Cor%orate mar&et
Corporate market refers to enterprise networking and service providers.5orderless networks
for their range of routers, switches, wireless systems, security systems, :A+ acceleration,
energy and 0uilding management systems and media aware networks.
1.' Co((a)oration
I& video and phones, Tele&resence, Jealth&resence, 6nified Communications, Call Center
systems, @nterprise social networks and Ao0ile applications
1.* +atacenter and ,irta(i-ation
6nified Computing, 6nified Ba0ric, ata Centre Switching, Storage +etworking and Cloud
Computing services.
I" ./. 0.e1t /eneration .etwor&s2
Jigh-end routing and switching for fi(ed and mo0ile service provider networks, 0roadcast
video contri0utionQdistri0ution, entitlement and content delivery systems.
Small 0usinesses
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Working of Cisco Systems SWOT Analysis
Cisco small 0usiness S.H##-"! "!-port .iga0it @thernet rackmount switch and its internals
Small 0usinesses include home 0usinesses and Cusually technology-0asedE startups.
3oters and switc4es
The machines that route and redirect packets across a network, including those for
networks of smart meters.
Security and surveillance
I& cameras, data and network security etc.
Moice and conferencing
M/I& phones and gateway-systems, :e0@(, video conferencing
:ireless
:iBi Access points
+etwork storage systems
&ersistent people storage on networks, either in the traditional sense or in a cloud-like
manner.
Home ser
Jome user refers to individuals or families who require these kinds of services.
K>*L
5road0and
5road0and refers to ca0le modems.
5(i% ,ideo
:ith the acquisition of &ure igital Technologies, Cisco 0egan to sell a line of video
recording devices called 9Blip Mideo9 that had 0een &ure igital7s only line of products. This
line of products was not as popular as Cisco had thought it would have 0een, and on April *",
"#**, Cisco announced they were discontinuing all Blip camera production. Cisco Rmi
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product line<video conferencing for home also proved to 0e a short-lived 0id for consumer
multimedia market and did survive in Cisco product lineup.
Jardware
A Cisco ASAQ"-H"@A router deployed at C@)+ in *$!>
A Cisco >$=#. I& &hone
Cisco 6CS 0lade servers
1.6 Cisco Career Certi7ications
Cisco Systems also sponsors a line of IT &rofessional certifications for Cisco products. There
are five levels of certification3 @ntry CCC@+TE, Associate CCC+A Q CCAE, &rofessional
CCC+& Q CC&E, @(pert CCCI@ Q CC@E, and recently Architect, as well as eight different
paths, )outing % Switching, esign, +etwork Security, Service &rovider, Service &rovider
/perations, Storage +etworking, Moice, atacenter and :ireless.
A num0er of specialist technician, sales and datacenter certifications are also availa0le.
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Working of Cisco Systems SWOT Analysis
Cisco also provides training for these certifications via a portal called the Cisco +etworking
Academy. ,ualifying schools can 0ecome mem0ers of the Cisco +etworking Academy and
then provide CC+A level or other level courses. Cisco Academy Instructors must 0e CC+A
certified to 0e a CCAI certified instructor.
Cisco often finds itself involved with technical education. :ith over *#,### partnerships in
over =' countries Cisco Academy program operates in many e(otic locations. Bor e(ample, in
Aarch "#*H, Cisco announced its interest in Ayanmar 0y investing in two Cisco +etworking
Academies in ;angon and Aandalay and a channel partner network.
1.8 Criticisms and contro#ersy
S4are4o(der re(ations
A class action lawsuit filed on April "#, "##* accused Cisco of making misleading statements
that 9were relied on 0y purchasers of Cisco stock9 and of insider trading. :hile Cisco denied
all allegations in the suit, on August *!, "##=, Cisco7s lia0ility insurers, its directors, and
officers paid the plaintiffs 6SD$*.>' million to settle the suit.
Inte((ecta( %ro%erty dis%tes
/n ecem0er **, "##!, the Bree Software Boundation filed suit against Cisco regarding
Cisco7s failure to comply with the .&4 and 4.&4 license models and make the applica0le
source code pu0licly availa0le. /n Aay "#, "##$, Cisco settled this lawsuit 0y complying
with BSB licensing terms and making a monetary contri0ution to the BSB.
Censors4i% in C4ina
Cisco has 0een critici?ed for its involvement in censorship in the &eople7s )epu0lic of China.
According to author @than .utmann, Cisco and other telecommunications equipment
providers supplied the Chinese government with surveillance and Internet infrastructure
equipment that is used to 0lock Internet we0sites and track Chinese online activities. Cisco
says that it does not customi?e or develop speciali?ed or unique filtering capa0ilities to ena0le
governments to 0lock access to information and that it sells the same equipment in China as it
sells worldwide.
:ired +ews had uncovered a leaked, confidential Cisco power point presentation that details
the commercial opportunities of the .olden Shield &roOect of Internet control. In her article,
Oournalist Sarah Stirland accuses Cisco of marketing its technology 9specifically as a tool of
repression.9
Ta1 7rad in#esti9ation
/n /cto0er *=, "##>, the 5ra?ilian Bederal &olice and 5ra?ilian )eceita Bederal Cequivalent
to the American I)SE, under the 9&ersona /peration9, uncovered an alleged ta( fraud scheme
employed 0y Cisco Systems 5ra?il Chief Carlos )o0erto Carnevali since "##" that e(empted
the company from paying over )D*.' 0illion C6SD!"1 millionE in ta(es.
Antitrst (awsit
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/n ecem0er *, "##!, Aultiven filed an antitrust lawsuit against Cisco Systems, Inc. in an
effort to open up the network maintenance services marketplace for Cisco equipment,
promote competition and ensure consumer choice and value. Aultiven7s complaint alleges
that Cisco harmed Aultiven and consumers 0y 0undling and tying 0ug fi(esQpatches and
updates for its operating system software to its maintenance services CSAA)TnetE and
through a series of other illegal e(clusionary and anticompetitive acts designed to maintain
Cisco7s alleged monopoly in the network maintenance services market for Cisco networking
equipment. Cisco responded 0y accusing the person who filed the anti-trust suit, 5ritish-0orn
&eter Alfred-Adekeye, with hacking and pressured the 6S government to e(tradite him from
Canada, where he was giving evidence against Cisco in an anti-trust hearing. Canadian Judge
)onald Ac8innon, who oversaw the e(tradition hearing, stated the real reason for the
e(tradition proceedings was 0ecause Alfred-Adekeye 9dared to take on a multinational giant.9
Je also condemned the 6S prosecutor for hiding the fact that Alfred-Adekeye was in legal
proceedings against Cisco Systems, for stating that Alfred-Adekeye had left the 6SA in a
time period when he had not and a formal request for e(tradition was not filed against Alfred-
Adekeye when he was taken into custody. Judge Ac8innon descri0ed the information
provided 0y Cisco and the 6S prosecutor as 9full of innuendo, half-truths and falsehoods,9
adding that 9This speaks volumes for Cisco7s duplicity9 and accused them of 9unmitigated
gall9 in using such a heavy-handed move as an unsupporta0le arrest and Oailing to pressure
Alfred-Adekeye to drop or settle his civil antitrust complaint.
1.1: Cisco O#er#iew
Cisco is the worldwide leader in networking that transforms how people connect,
communicate and colla0orate. At Cisco C+ASA,3 CSC/E customers come first and an
integral part of our +A is creating long-lasting customer partnerships and working with
them to identify their needs and provide solutions that support their success.Bounded in *$!1
0y a small group of computer scientists from Stanford 6niversity, Cisco engineers have 0een
leaders in the development of Internet &rotocol CI&E-0ased networking technologies since the
company7s inception.This tradition of innovation continues with industry-leading products in
the core areas of routing and switching, as well as advanced technologies in areas such as
6nified Communications, +etwork Security, Mideo, Mirtuali?ation and Cloud Computing.
Innovation is a core part of the Cisco culture and annually D'.$ 0illion is invested in )%F
Cisco has more than "!,### @ngineers worldwide.
Cisco /(o)a( 5acts
Incorporated on ecem0er *#, *$!1 in California
:ent pu0lic on Be0ruary *=, *$$#. +ASA, +A3 CSC/ CCommon StockE
,1 B;7*1 @mployee Count3 >',###P
John T. Cham0ers is the Chairman and Chief @(ecutive /fficer, Cisco
B;S*1 revenue was D1>.* 0illion
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Cisco India
Cisco India commenced operations in *$$'F India, as a region, is part of the A&AC theater
Cisco has seven sales offices in the region - +ew elhi, Aum0ai, 5angalore, Chennai,
&une, 8olkata and Jydera0ad.
The Cisco .lo0al evelopment Center is in 5angaloreF the largest outside of the 6S. The
*A square foot campus houses Cisco7s )esearch and evelopment C)%E, IT , Services and
Customer Support teams. The centre develops disruptive 0usiness models for Cisco to create
new go-to-market channels, markets, processes and technologies for emerging markets. The
Advanced .lo0al 5riefing Center located here showcases Cisco7s latest technology solutions
and proof-of-concepts.
Currently !H# patents have 0een filed from India and '## issued for innovations across all
technologies.
The Cisco AS) $#* )outer developed 0y Cisco7s engineering team in India received the
+ASSC/A Innovation Award "#*" for innovation in creating a unified platform to serve the
needs of ".QH.Q1. mo0ile 0ackhaul and Carrier @thernet applications.T "#*1 Cisco andQor
its affiliates. All rights reserved. This document is Cisco &u0lic. &age " of H
Cisco India has won two Aegis .raham 5ell Awards for "#*". Cisco7s 6nified Computing
System C6CSE C series " socket AH Server software and +e(us H### Series Switch software
won awards for innovation in the Cloud Services and Telecom Infrastructure categories
respectively.
Cisco has Ooint evelopment Centers with :ipro Technologies and Infosys Technologies
in 5angaloreF JC4 Technologies in Chennai and Nensar Technologies in &une.
Cisco7s go-to-Aarket strategy is through partners
o "'##P &artners
o *H .old &artners 2 Accenture Services &vt 4td, 5ritish Telecom India &vt ltd, Tech
Aahindra, imension ata India 4td, JC4 Comnet , JC4 Infosystems 4td, I5A, /range
5usiness Services, A.C +etworks, Melocis , :ipro, TCS, &roactive
o *# Silver &artners 2 4ocu?, &C Solutions , +irmal atacomm, S8 International, Allied
igital Services 4td, +etplace Technologies &vt 4td, Central ata Systems &. 4td, Intec
Infonet, Syndrome Technologies and Aillennium IT CSri 4ankaE
o 1 istri0utors2 Ingram Aicro, )edington, Compuage and Inflow Technologies
Support and Service - @(tensive support system for customers with "" premium depots
Clogistics centresE.
5esides that, Cisco is the only vendor to have a support program called A)+5 Cadvance
replacement ne(t 0usiness dayE for its resellers.
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Cisco Capital was launched in "##' to offer fle(i0le leasing and financial services to
customers and partners.
Currently, there are *$$ Active Cisco +etworking Academies across "1 states % union
territories in India with *$,*1*active students. /verall, $#,#*! Students C"!G femaleE have
0een impacted since the program inception and there are "1,'"#Cisco certification ready
graduates through the program.
India Mar&et S4are ;eaders4i%
Core Technologies
@+T )outer3 >=GF S& )outer3 ='GF Switch C4"-4HE3 =>G CC; ,*7*1, ICE
Advanced Technologies
:4A+3 1*G CC; ,*7*1, ICE
Security3 H*G CC; ,*7*1, Brost % SullivanE
I!= 5lade3 *1G CC; ,*7*1, ICE
I& &5I3 '"G CC; ,*7*1, Brost % SullivanE
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Some &ey cstomers across India
Corporate - Bord India, r. )eddy7s 4a0oratories, Tata .roup, Aahindra % Aahindra,
4arsen % Tou0ro,
.as Authority of India, Indian /il Corporation, 4e )oyal Aeridien, TaO .roup of Jotels and
Jindustan 4ever
Service &roviders - Tata, )eliance, 5harti, MS+4, 5S+4, AT+4, SIB; and I@A
Cellular
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2.COM"A.Y "E3S"ECTI,E< A.
A.A;YSIS O5 CISCO SYSTEMS
A. Cisco Systems Com%any "ro7i(e
Mirtually all Internet traffic today travels through networks 0uilt with Cisco Systems
equipment. The Internet would not function without this revolutionary company. Cisco
Systems is a success story, a company envied and admired 0y many. Cisco is responsi0le for
paving the road that so many companies have seen traveled. They achieved record sales,
market capitali?ation and revenues in less than two decadesU 4egendary leaders like John
Cham0ers, CiscoSs C@/ have made these accomplishments possi0le. Cisco is also recogni?ed
as a great company to work for and has 0een included in lists like BortuneSs V5est Companies
to :ork BorW and V5est Companies for :orking AothersW in :orking Aothers Aaga?ine.
Cisco Systems has grown over "# years from its modest 0eginnings in California to a glo0al
giant with over H1,### employees and a name that is recogni?ed worldwide.
Bac&9rond
A story is intertwined with the 0irth of Cisco at Stanford 6niversity. /ne couple, Sandra
4erner and 4eonard 5osack, were frustrated with the mismatched computer technologies on
campus that hindered their a0ility to communicate using the computer. At that time, Stanford
had twenty incompati0le e-mail systems and ',### different computers on campus. :ith the
help of a few friends, the young couple linked the graduate 0usiness school 0uildingSs
network to the 5osackSs computer la0 network and the first router was 0ornU In *$!1 this
revolutionary technological achievement inspired the couple to continue 0uilding routers
which they named ciscos after the near0y city of San Brancisco.
Two years and one house mortgage later 4erner and 5osack sold the worldSs first network
router. Soon 0usiness was 0ooming. The young couple were earning over a quarter of a
million dollars each month without the help of a sales staff or marketing campaign. )eali?ing
the need for additional funding and professional staff, a sales pitch was developed and the
mission to find a venture capitalist sponsor 0egan. After >= failed attempts, 5osack hit the
Oackpot with onald Malentine from Sequoia Capital. Malentine provided the necessary
funding and installed a top notch e(ecutive team. John Aorgridge was installed as &resident
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Working of Cisco Systems SWOT Analysis
and C@/ in *$!! and the company altered its target customer from universities and the
government to large corporations. Sales skyrocketed from D*.' million in *$!> to D"! million
in *$!$. This company was going placesU Birst stop was going pu0lic in *$$#. 6nfortunately
this is also the year 4erner was asked to leave and 5osack followed her. The small company
that started in a garage was transformed into a worldwide giant, Cisco Systems. This
transformation can 0e traced to the leaders of the company that included Cham0ers,
Aorgridge, Malentine and Solvik.
Cisco credits most of its sensational achievements to their early adoption of the wide are
networks and successful implementation of Internet technologies. Cisco has information
systems for its customers, intranet systems for its employees, systems for it suppliers and
more. The man responsi0le for the leading-edge introduction of these systems was Senior
Mice &resident and Chief Information /fficer, &ete Solvik. Solvik was also responsi0le for
changing the company policy on the implementation of information technologies. &ete
Solvik, with the assistance of senior e(ecutive oug Allred, developed a ground-0reaking IT
authori?ation policy. They developed the Client Bunded Aodel, a system that allowed
individual 0usiness units to make IT e(penditure decisions. Core IT spending would remain
centrali?ed 0ut the redistri0uted responsi0ility would increase sales and 0enefit customers.
Although Solvik would continue to report directly to the C@/ not all IT decisions would 0e
required to 0e taken to the top level. This was a radical idea, that individual 0usiness units
could purchase and implement IT as they saw fit with no waiting and no approval.

B. T4e Com%any and Crrent Bsiness ;eaders
Today, Cisco Systems is a dominant worldwide player. This young innovative company has
0ecome the most financially successful company in the network equipment industry. Cisco is
a name recogni?ed and respected in the technical world. Cisco stock has made people
millionaires, Cisco products have saved companies millions of dollars and Cisco training
programs have ena0led people to advance their career.
Cisco SystemSs main corporate headquarters is located in San Jose, California with offices in
si(ty-eight countries worldwide. CiscoSs core market is routing and switching, which make
up =>G of sales. Cisco has 0ranched in other related markets including optical, wireless
4A+, network security, I& Telephony, home networking and storage networking 0y
developing advanced technology products. Cisco divides its market into four segments3 large
enterprise Ctheir principal marketE, small and medium 0usinesses, service provider and
recently added, home and home office. &roducts and end to end solution advice is given
dependent on the customerSs needs and si?e. Cisco is a glo0al company with the maOority of
CiscoSs sales, '=G made in the Americas followed 0y ">G in @urope, >G in Asia &acific and
the remaining in various countries.
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Working of Cisco Systems SWOT Analysis
Cisco is moving towards 0ecoming a Vnetworked virtual organi?ation.W John Cham0ers is an
outsourcing proponent and has outsourced many of CiscoSs main 0usiness areas, most nota0ly
manufacturing. Cham0ers states that the core 0usiness, that is - what provides a companySs
sustaina0le competitive advantage, should remain internal 0ut everything else can 0e
outsourced to those more capa0le. Cham0ers actually uses the term Vout-passW, differentiating
the concept from outsourcing 0y stating Cisco maintains control of the strategy, the
implementation, the systems and the inventory. The decision to outsource or Vout-passW was
made when Cisco was still in its infancy. :hen Cisco first 0egan selling routers they lacked
significant manufacturing capacity. 8nowing that speed was vital to survival CiscoSs leaders
made the decision to outsource, they 0ought manufacturing capacity allowing sales to 0e
made immediately. Cisco has gained a competitive advantage with this strategy, as $'G of
present customers ordered Cisco products through contract manufacturers over the Internet
who were also responsi0le for delivery. /ther areas were Vout-passedW like all customer
service which is now handled online, decreasing the average customer call cost from D"'#.##
to D>.##.
C. T4e Com%etiti#e Strate9y
Cisco has made its way to the top of the network equipment industry and has maintained this
position over time. This elevated status has 0een achieved through differentiation, innovation,
growth and alliance strategies. Cisco is considered a pioneer, as they were the first company
in the network equipment industryF in fact one of the first companies in any industry to use
the Internet for its own 0usiness practices. Cisco adopted the Internet in *$$* and 0egan
investing in information technologies. Cisco can 0e differentiated from their competitors 0y
their outstanding award-winning we0site, CC/, which offers unparalleled customer service
0y providing tools specifically designed for customers. Cisco continues to grow 0y acquiring
new companies and 0ranching into new product and geographical markets. Started 0y a few
engineers twenty years ago, this company now has over H1,### employees. Cisco is also
differentiated from their competitors 0y their numerous acquisitions and availa0le resources.
Cisco offers their customers innovative industry-leading products and tools to meet their
needs. Alliance strategies have allowed Cisco to quickly offer their customers services or
products through partner agreements. The com0ination of these strategies has proven
incredi0ly successful for Cisco, the network industrySs 0ellwether.
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Working of Cisco Systems SWOT Analysis
+. Mar&et and 5inancia( "er7ormance
Cisco is the mighty king within the network equipment industry. )evenues per employee and
net sales for this powerhouse tower over competitors. CiscoSs growth in sales can 0e o0served
over the nineties in Bigure =, until their peak in "##*. Although it is CiscoSs peak sales year, it
is also their only reported loss of D*#*1 million. Cisco was forced to lay off over !###
employees and suffered a loss on surplus inventory in "##*. This occurrence can 0e easily
viewed in Bigures > 0elow. "##" showed little improvement as Cisco reported a gain 0ut not
as high as *$$$ or "###. This past year, "##H showed a marked recovery for Cisco as their
net income e(ceeded all other years.
Bigure $C*E Bigure *#C*E
CiscoSs revenue per employee was D'"', 1*> in "##". This is larger than all of their
competitorSs and more than dou0le the revenue per employee for a few including HCom. The
margin 0etween CiscoSs revenue per employee is much greater for the larger companies like
4ucent and +ortel than it is for the smaller companies like @(treme.
CiscoSs profit per employee was D'",'!H in "##". Compared to competitors like HCom,
4ucent and @(treme who suffered losses in "##", this num0er is phenomenal. Cisco was one
of the few networking companies that reported profit in "##".
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Working of Cisco Systems SWOT Analysis
Bigure **C*E
Cisco reached a market capitali?ation milestone of one 0illion dollars in *$$!. Aarket
capitali?ation is the total dollar worth of a company7s stock, or the price per share multiplied
0y the num0er of outstanding shares. The most nota0le factor determining this value is not
the company7s current si?e in terms of sales 0ut the market7s perception of its future
prospects. If investors think a company will grow rapidly, they are likely to 0id up its share
price. Bigure $ shows that investors 0elieve that Cisco has a 0right future, with a market
capitali?ation value higher than the com0ined values of the nine competitors shown.
Aarket Capitali?ation in Aillions of ollars for "##"
Bigure *"
C"E
E. Si9ni7icance o7 In7ormation Systems
Information systems have 0een critical to CiscoSs success. It is possi0le to say that
information systems are the single most significant factor responsi0le for CiscoSs success.
Customers would have sought out CiscoSs competitors or found su0stitute products if the
customer service pro0lems in the early nineties were not solved using innovative IS solutions.
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Working of Cisco Systems SWOT Analysis
Cisco has implemented award winning, ground-0reaking systems that 0enefit not only their
customers 0ut also their partners and employees.
CC/, Cisco Connection /nline sold over >' million dollars worth of products within the first
four months. Customer order errors dropped one-fourth, from "'G to *G. Today, over $#G
of customer orders are made online through this always accessi0le glo0ally connected
we0site. This year CC/ was awarded V5est 5usiness-to-5usiness :e0 SiteW 0y +et
Aarketing. Cisco states that in "##H, information systems saved the company over D".*
0illion in cost avoidance and time efficiencies.
C@C is CiscoSs intranet, Cisco @mployee Connection, a system that incorporates most
employee functions to simplify their process. @mployees can do everything on this site from
request a cu0icle reassignment to track a shipment to order catering services for a scheduled
meeting or review employee 0enefits. Cisco 0oasts that this system empowers employees,
streamlines administration, optimi?es workforces and improves recruiting efforts. )ecruiting
and retaining highly skilled technical employees could make or 0reak a company in the
*$$#Ss. These systems helped 0uild and populari?e 0oth the culture and e(citement of 0eing
part of the Cisco team 0y keeping individuals Xplugged inS to the corporate vision.
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Working of Cisco Systems SWOT Analysis
3. I.5O3MATIO. SYSTEMS AT CISCO
SYSTEMS
CiscoSs use of information technologies has 0een instrumental to the competitive advantage
they achieved, allowing them to dominate the network equipment industry. This section
provides an analysis of CiscoSs use of information technologies, concentrating on3
accomplishments, support from senior e(ecutives and significant contri0utions to their
industry leading position.
A. Strate9ic O%tion /enerator
The Strategic /ption .enerator is a tool that can 0e used to identify strategic 0usiness
opportunities involving the use of information systems. This model can also 0e used to
analy?e the successful use of information systems within an organi?ation to gain a
competitive advantage. The Strategic /ption .enerator first identifies the 0usiness target of a
particular company and then defines their thrust CstrategiesE, mode, direction Csystem usersE
and e(ecution. The correct com0ination of these factors ena0les companies to successfully
achieve and sustain a competitive advantage through the use of information systems.
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Working of Cisco Systems SWOT Analysis
Strate9ic O%tion /enerator
Bigure *"
Strate9ic Tar9et
Customers were CiscoSs target in their strategy to gain a competitive advantage through the
use of information systems. Customers have always 0een a focus at Cisco where customer
satisfaction is not a priority 0ut the priority. The first system designed to provide value to
customers provided easy access to technical support and improved speed and accuracy of
orders. CC/, Cisco Connection /nline is CiscoSs main information system that targets
customers. This system has 0rought value to the customer 0y3 decreasing ordering errors and
time delays, providing "1Q> technical assistance and providing access to current relia0le
information. Customers 0enefit indirectly from two other systems, C@C, Cisco @mployee
Connection and AC/, Aanufacturing Connection /nline.
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Working of Cisco Systems SWOT Analysis
T4rst
This layer includes five 0usiness strategies3 differentiation, low cost, alliances, growth and
innovation. CiscoSs primary thrust was undenia0ly differentiationF they were providing a
VrevolutionaryW service for their customers. CC/ met the growing needs of CiscoSs
increasing customer 0ase. The company also differentiated themselves 0y doing what they
preach3 Cisco is the 0est e(ample of how to implement and 0enefit from a networked
infrastructure 0uilt on CiscoSs products. Innovation, growth and alliance strategies have 0een
utili?ed 0y Cisco in addition to differentiation. Innovation is essential for CiscoSs products
and services. Cisco divides its innovation strategy into three segments3 price performance,
intelligent services and evolutionary infrastructure. @mployee growth and product line
e(pansion has 0een accomplished most often through the acquisition of smaller companies.
Alliances have also helped Cisco to improve products and services, quickened product to
market time and maintain a competitive advantage.
Mode
Cisco is a pioneer in the internetworking industry. Cisco was and continues to 0e an offensive
glo0al player, leading others in 0oth 0usiness strategies and e(tensive use of information
systems. The decision to move online, to transform a 0rick and mortar company into an e-
company was a wake-up call not only to companies within the industry 0ut other industry
leaders. Cisco took a risk with an Internet information system strategy that paid off. The idea
to share information, especially technical information with customers, suppliers and partners
was controversial. 5y sharing information, 0y e(posing themselves, Cisco ran the risk of
giving competitors information that could 0e used against them. Bortunately, Cisco
customers, given access to CiscoSs product pro0lems, now wanted the same access to
competitorSs flaws. Cisco has 0een an aggressive leader with their deployment of information
systems and other technologies.
+irection
Cisco information systems users include 0oth individuals outside the company and
employees within. Bor this reason, direction for Cisco is 0oth use and provide. Cisco
Connection /nline, CC/ an award winning site for high customer satisfaction is accessi0le to
0oth Cisco employees and customers. @mployees quickly transfer information to CC/,
ensuring that customers, suppliers, partners and investors have access to timely accurate
information. C@C is an internal system for Cisco employeesS use and AC/ is a system that
connects Cisco to their partners and suppliers.
E1ection
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Working of Cisco Systems SWOT Analysis
Cisco 0ecame a leader with their implementation of CC/, C@C and AC/. The com0ination
of these factors has ena0led Cisco to gain and sustain a competitive advantage through the
use of information systems. Their e(ample has 0een followed 0y numerous other companies
attempting to follow CiscoSs e(ample in the hopes of achieving a strategic advantage.
B. 3o(es= 3o(es and 3e(ations4i%s
5ehind the success of competitive information systems are employees and relationships. The
role of information systems is to concentrate on competitive priorities. Senior managementSs
role is to understand and prioriti?e the competitive information systems. The information
systems organi?ation is responsi0le for supporting operations, understanding the 0usiness and
capitali?ing on future opportunities. 6sers, on an operational level are the ones who actually
achieve the competitive advantage with the systems.
3o(e o7 C4ie7 In7ormation O77icer
CI/s and information system managers need to position information systems to meet the
present and future demands of their company. +ew information technologies that capitali?e
on future 0usiness opportunities must 0e provided without disrupting daily 0usiness activities.
CiscoSs current Chief Information /fficer, 5rad 5oston Vis responsi0le for the company7s
worldwide use of information technology. :ith a focus on improving the company7s
productivity, speed and agility, 5oston is driving Cisco7s IT foundation strategy to ena0le end-
to-end 0usiness processes and IT efficiencies throughout the organi?ation.W /ne of the most
important responsi0ilities 5oston has is to manage an ongoing relationship with senior
management. 5y understanding their needs, IT can develop solutions 0efore pro0lems arise.
This 0uilds a fundamental trust 0etween IT and senior management. 5oston has also
deployed some of the telecommunication technologies that will 0e discussed in the
telecommunications section.
&ete Solvik, CiscoSs previous CI/ played the role of XvisionaryS for CiscoSs information
systems. uring his time at Cisco, Solvik was responsi0le for worldwide use of information
technologies, productivity strategies and Internet initiatives. uring Solvik7s era, Cisco7s
0usiness operations 0ecame the quintessence of e-0usiness. &ractically all functions were
virtuali?ed3 customer support, manufacturing, sales, the supply chain and accounting. 6nder
SolvikSs leadership, the Cisco Connection /nline :e0 site won do?ens of awards including3
CI/ Aaga?ine7s V:e0 5usiness '#Q'# AwardW, :e0AwardSs VStandard of @(cellence
AwardW, Aomentum7s VeAarketer Aarketing AwardW and VTop *## Internet sitesW 0y &C
maga?ine. Solvik was named in the VCI/ *##W 0y CI/ maga?ine for si( years, *$$>-"##"
and included as one of the V'# &eople :ho Aake a ifference in @nterprise +etworkingW 0y
+etwork :orld. Solvik had a tremendous role in 0uilding the technology foundation and
Internet culture that Cisco is renowned for today.
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Working of Cisco Systems SWOT Analysis
3o(e o7 Senior Mana9ement
Senior e(ecutives need to recogni?e the value of information systems and personally sell this
importance to the company employees. They are responsi0le for funding and properly
staffing the information system initiatives and IS organi?ation. CiscoSs implementation and
commitment to CC/, C@C, AC/ and other technologies required senior management vision
and approval. 4uckily for Cisco, senior management has always seen the importance of
information technologies. Today, an investment equal to 'PG of annual revenue is spent on
IT. John Cham0ers defines three perspectives a C@/ can hold a0out information
technologies3 as an e(pense, a necessary requirement or as instrumental to implementing
strategies. Cham0ers is a strong proponent of the last view, stating that IT is the vehicle that
drives a competitive advantage.
C@/s can not 0e the only 0usiness leaders to support the use of information systems. Cisco
has 0enefited from other senior management leaders like 4arry Carter who have prioriti?ed
information technologies at Cisco. Carter, now a senior vice president was CiscoSs CB/ for
eight years. Je can 0e credited with implementing CiscoSs ground0reaking daily financial
reporting that ena0led their one-day worldwide virtual close. A one day close is a phenomenal
tool translating to real-time, Xhands onS the pulse of the company.
Bigure *H
3o(e o7 5nctiona( Mana9ement
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Working of Cisco Systems SWOT Analysis
Bunctional managers should understand the competitive advantage of information systems,
identify new system requirements, financially Oustify systems and support their use. CiscoSs
functional managers have these responsi0ilities along with certain unique freedoms. In *$$H,
Cisco developed a revolutionary process for distri0uting IT proOect development and IT
funding responsi0ility. CBA, the Client-Bunded Aodel was developed 0y Solvik and oug
Allred to delegate IT e(penditures to 0usiness functions.
This decision allows 0usiness leaders to decide when, where and what technologies they want
to invest in to change the 0usiness. This unique IS structure shown in Bigure *H, is not a
traditional hierarchy. IS decisions are made at each functional 0usiness level. In the updated
model of CBA, 5oston e(plains that Cisco Vencourages people to 0uild applications and
systems that work cross-functionally and encompass the whole 0usiness process. 5usiness
and IT are 0oth responsi0le for sharing the necessary infrastructure across all the parts of the
0usiness. Cross-functional funding helps the company integrate systems and processes.W
This form of employee empowerment has ena0led lower level managers to make decisions,
unleash their creativity, feel like they can make a difference and ensures employee V0uy inW.
CEO>CIO 3e(ations4i%
To achieve and sustain a successful information system it is imperative that a strong,
continuous working relationship 0etween senior management and the information systems
organi?ation e(ists. Cham0ers and 5oston 0elieve their relationship, the partnership 0etween
the 0usiness side and the technology side of the company is crucial. Cham0ers views the
C@/-CI/ relationship as critical for success, stating that VThis KC@/-CI/L relationship must
0e a true partnership focused on 0usiness results. Cisco CI/ 5rad 5oston and I work very
closely together on our company goals.W
C*E
Cham0ers 0elieves that IT and 0usiness must 0e
aligned to increase productivity which helps companies 0ecome more competitive. Cham0ers
is responsi0le for communicating CiscoSs long-term vision to 5oston and the rest of the
information systems organi?ation. 5ostonSs team must use IS to make the vision a reality.

C. 3ede7ine?+e7ine
Cisco has 0een a0le to provide value to their customers through their use of information
systems. 5y redefining their internal 0usiness processes, Cisco redefined or changed their
industrySs factors of competition. Cisco also used information technologies to 0etter define
the nature of their 0usiness and products 0y placing emphasis on 0eing their own 0est model,
a networked 0usiness. Some product development processes have 0een redefined with use of
information technologies 0ut these changes have not 0een as
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Working of Cisco Systems SWOT Analysis
instrumental to providing customer value as the changes to the 0usiness processes. Three
maOor systems, CC/, CA/ and C@C redefined CiscoSs 0usiness processes, differentiating
Cisco from their competitors.
Cisco Connection On(ine 0CCO2
In the early *$$#s, Cisco was struggling to keep up with their rapid growth. They could not
handle the growing num0er of product orders and customer service pro0lems. After CiscoSs
network crashed in *$$1, Solvik convinced senior e(ecutives to purchase an /racle @)&
system for D*' million. This single investment was huge, a0out ".'G of *$$HSs revenue and H
times larger than the previous yearSs entire IT 0udget. /nce this system was implemented,
CC/ was launched and soon customer satisfaction was soaring.
CC/ is a self-service system that offers a u0iquitous connection 0etween Cisco customers,
employees, partners and suppliers. Customer usage and satisfaction with this system have
continued to grow since CC/Ss introduction ten years ago. Initially, the site was designed for
customer technical assistance and product information, not online purchasing. In *$$=, the
second phase of CC/ was launched, the e-commerce side of the system that permitted online
ordering. Customers were given the a0ility to configure, price, direct and su0mit electronic
orders to CiscoSs automated order-flow system. The maOority of the orders go directly to
Cisco7s third-party suppliers, who will ship directly to customers, reducing CiscoSs product
order cycle over >#G. Shipment status can 0e tracked with CiscoSs direction link to Bederal
@(press and 6&S. Today, almost all, over $#G of orders are made online. /ver !#G of
customerSs service or support issues are resolved online. @rror rates have decreased from over
H#G to less than *G. )eal time communication and vast access to information have helped
increase customer loyalty. Cisco.com, the CC/ application, is a monster site today,
containing over ten million pages of information.
/ther 0eneficiaries of CC/Ss self service system include Cisco suppliers, partners and
employees. Companies wishing to 0e suppliers to the networking giant can find all the
necessary applications and information online. Suppliers profit from this streamlined supply
chain management that incorporates fully automated activities and accelerates new product
development. Cisco partners are given e(tended access to CC/ secure areas and tools to
effectively manage this relationship. CC/ adds value to partner relationships 0y sharing
access to3 online training tools, a partner locater search engine and &artner Access online,
&A4, a system that measures customer satisfaction and tracks trends. CC/ has led to higher
employee satisfaction and retention levels and created a thriving Internet culture. This can 0e
attri0uted to the self-serving empowerment of CC/. @mployees can perform their Oo0s more
efficiently with the use of CC/. 5enefits to Cisco include3 increased employee effectiveness
Page | 2
Working of Cisco Systems SWOT Analysis
and efficiency, lower costs, accelerated time to market and most importantly, increased value
to customers. CC/ has proven to 0e one of CiscoSs main competitive advantages 0ecause of
the increased customer care with the added 0onus of workforce optimi?ation and integration
of supply chain management.
Cisco ,a(e to Cstomer C4art
Page | 2!
Working of Cisco Systems SWOT Analysis
Bigure *1
Cisco Em%(oyee Connection 0CEC2
C@C, Cisco @mployee Connection is CiscoSs intranet site, first launched in *$$'. /riginally,
the site had limited capa0ilities, only e-mail, information 0ulletin 0oards and search tools.
C@C was soon e(panded to simplify employeeSs daily tasks and 0oost efficiency. @mployees
can do everything from order supplies, e(ercise stock options or hold meetings. /ne of the
first 0usiness processes to 0e redefined 0y this information system was the Juman )esources
department. J) forms such as e(pense reports, health insurance, and new hires were
standardi?ed and incorporated into this @)& for online employee access. @mployees are
highly satisfied with this system that makes their lives easier. A great e(ample of these
computeri?ed processes in C@C is the e(pense report process. Charges can 0e quickly
transferred from an employeeSs American @(press corporate card electronic statement to an
electronic e(pense form. These forms are su0mitted automatically and employees can 0e
reim0ursed in as little as forty-eight hours. IT has made employees more productive,
Page | 2"
Working of Cisco Systems SWOT Analysis
contri0uting to CiscoSs profita0ility in this e(ample. Another key process that was automated
was accounting. )eal-time management accounting was created with the goal of empowering
management teams to improve decision-making with real-time information. Aanagers can
access company orders, discounts, and revenues from the previous day. Accounting
automation has also ena0led Cisco to close their 0ooks in a day, a monumental feat for any
large company.
Man7actrin9 Connection On(ine 0MCO2
/ne of CiscoSs first landmark decisions was to outsource manufacturing, a necessary decision
to meet the raging demand for Cisco products. Cisco redefined their manufacturing process
with the use of an information system that was developed in *$$!. Cisco Aanufacturing
Connection /nline, AC/, is a 0usiness-to-0usiness portal Cwe0 access gatewayE that
connects CiscoSs manufacturers, suppliers, logistics partners, assem0lers, and distri0utors.
AC/ integrates and networks the supply chains of Cisco and CiscoSs partners and contract
manufacturers. Access to information a0out customers, products, shortages and sales
proOections are shared through AC/, resulting in decreased inventory costs and more
accurate customer delivery dates. AC/ is a highly automated process that can reach the
assem0ly line with little human intervention.
+. Si9ni7icance o7 Te(ecommnications
Telecommunications descri0es the sciences and technologies that transmit various forms of
voice and data electronically. Telecommunication technologies have significantly 0oosted
CiscoSs cost savings, productivity, and effectiveness. Cisco is considered the network
equipment industrySs most productive company 0ecause of their high revenue per employee.
@fficiencies have 0een gained with e-learning initiatives like I&QTM and network access
e(tensions like :4A+s. Cisco estimates their use of Internet capa0ilities saved them over
D*.$1 0illion in "##" through cost avoidance and time efficiencies. A common theme can 0e
found in all of these technologies3 an increase in employee value, productivity, a 0asis for a
competitive advantage and tremendous cost savings.
Cisco@s 5isca( Year @:2 Bene7its 7rom Internet Ca%a)i(ities
Application Cost Avoidance Time @fficiencies Total Savings
Customer Care D!$*A D!A D!$$A
:orkforce /ptimi?ation DH##A DHH$A D=H$A
Page | 3#
Working of Cisco Systems SWOT Analysis
Supply-Chain Aanagement D"#!A D==A D">1A
@-4earning D>HA D=#A D*HHA
Total D*.$15
I"?T,
/ngoing education and training is necessary to ensure employees understand new
technologies and are moving towards the same company goals. This training is often
e(pensive and time consuming for 0oth the company and individual employee. Cisco
recogni?ed this pro0lem and developed some innovative technologies to com0at the dilemma.
I&QTM is CiscoSs network streaming video solution that provides immediate results3 cost-
savings, wide-scale training, viewer convenience and real-time educational opportunities.
Cisco trains their own employees with this I&QTM H1## series server that they sell to
customers along with software as an end-to-end complete network video solution. @mployees
watch training videos at their own workstations, at their own scheduled time. This unique
approach to training employees virtually eliminates the need for costly travel and loss of
productivity. Training can 0e scheduled during Vdown timesS like 0etween software releases
or completed from home. Cisco implements this technology for new product training, up-to-
the-minute corporate communications and educational programming. Cisco 0enefits from this
form of e-learning that produces a well-trained knowledgea0le staff, provides continual cost
savings and increases productivity.
I" Te(e%4ony
/nce again, Cisco 0ecame their own 9first and 0est customer9 in deploying this
ground0reaking new technology. In *$$!, Cisco 0egan deploying integrated Internet
&rotocol networks to their worldwide offices. Traditional telephone systems were replaced
with feature-rich, cost-efficient I& telephony systems. Although it was a risk to deploy
integrated data, voice and video, Cisco 0elieved it was a 0etter alternative to reinvesting in
legacy technology. They started with a pilot program, with "## employee volunteers and
rapidly e(panded. Today, over *## Cisco sites have I& telephony, serving nearly 1#,###
phones, and 0enefiting employees worldwide through relia0le, cost-saving I& telephony
applications. The knowledge Cisco gained through this implementation process helped Cisco
0ecome the world leader of I& Telephony with over *.1 0illion phones shipped.
Aire(ess ;A.s
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Working of Cisco Systems SWOT Analysis
:ireless local area network deployment or :4A+ deployment was one of CiscoSs goals at
the turn of the century. Cisco wanted to integrate :4A+s with their e(isting network
infrastructure to produce a glo0al, scala0le, secure wireless end-to-end solution. The :4A+
would 0e a secondary network, not meant to replace the wired infrastructure, 0ut used to
increase employee productivity and safeguard against any unforeseen service impacts. The
process of deploying the Aironet :4A+ solution 0egan in early "##" and was completed in
more than H!# sites in >$ countries 0y that summer. This Vanywhere, anytimeW network
connectivity allows Cisco employees to conduct 0usiness wherever, whenever. Today, the
:4A+ is a fully deployed and used worldwide, with more than H### access points Ca0out
"'QuserE and H",'## clients. This is the largest single enterprise deployment of a glo0al
wireless network. @very Cisco employee has 0een provided with a wireless network interface
card C+ICE or wireless laptop. 5enefits for the employee include ease of access, convenience,
0etter responsiveness, a wire-free environment, increased fle(i0ility and porta0ility.
@mployee access to the Internet, applications and e-mail is no longer limited to cu0icles 0ut
can include locations like conference rooms and lo00ies. A study 0y +/& :orld estimates a
time savings of almost $# minutes per employee per workday with the use of :4A+s. Cisco
has profited from this cost effective solution that reduces errors, ena0les quick decision-
making and 0oosts productivity.
I" ,".
Secure I& Mirtual &rivate +etworks, M&+s, allow employees to telecommute and virtually
meet. @mployees can access CiscoSs M&+ remotely through a high-speed S4 or ca0le
connection. Cisco estimates that M&+s have increased productivity one to two hours a day for
each employee. I& phones allow users to hold virtual meetings and access the same tools as
employees within Cisco office 0uildings. /ther advantages include retention of highly skilled
employees who can not commute, travel cost savings and the elimination of long-distance
phone tolls.
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Working of Cisco Systems SWOT Analysis
E. Sccess 5actor "ro7i(e
The Success Bactor &rofile is a compilation of the strengths of over *'# organi?ations and
their strategic use of information systems. Si(teen factors that helped companies gain a
competitive advantage were defined. &rimary factors vary 0etween companies in the
networking equipment industry 0ecause of different company strengths such as3 strategies,
management and product line. The maOority of these factors could 0e used to descri0e CiscoSs
successful utili?ation of information systems. The following success factor 0reakdown is
limited to the maOor factors that helped Cisco successfully achieve a competitive advantage
with information systems.
E1ecti#e and In7ormation Systems Mana9ement "artners4i%
A strong relationship 0etween senior management and information systems management is a
crucial success factor for Cisco. There must 0e an ongoing working relationship where
communication 0etween the two parties is open and frequent. In a recent interview Cham0ers
stated Vthe relationship 0etween the C@/ and the CI/ is critical for success.W Cham0ers
meets with CiscoSs CI/ frequently, 0elieving that he has a strong partnership with 5oston.
Through direct communication with Cham0ers, Aorgride and Malentine, CiscoSs most
influential CI/, &ete Solvik, was a0le to understand CiscoSs 0usiness needs and develop
Cisco Connection /nline.
/ther important aspects of this relationship include senior management confidence in
information systems and information systems management 0usiness understanding.
Cham0ers is a great e(ample of a company leader who 0elieves in the dependa0ility of
information systems and views them as a competitive resource. &ete Solvik, CiscoSs most
influential CI/ and 5rad 5oston CiscoSs current CI/, understand CiscoSs priorities and
direction. +either CI/ is solely technicalF 0oth have a 0usiness perspective from their
previous companies.
Bsiness ,ision
Cisco is striving to VChange the way we :ork, 4ive, &lay, and 4earn9. This change will occur
as Cisco 9Shapes the future of the Internet 0y creating unprecedented value and opportunities
for customers, employees, investors, and ecosystem partners.9 CiscoSs vision is defined and
supported 0y CiscoSs visionary C@/. Cham0ers is the Vindustry spokespersonW, the V8ing of
the InternetW who is campaigning for the Internet revolution. Jis vision and prioriti?ation of
information technologies has spread through the company. Cham0ers has consistently 0een
0oth a motivator and educator within his own companyF he understands the power of all
employees marching together. VI want Cisco to 0e a dynasty. I think it can 0e a company that
changes the world.W Cham0ers long-range goal is for Cisco to 0ecome the most powerful and
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Working of Cisco Systems SWOT Analysis
influential company in history. This goal is fairly vague and gives Cisco room to make all
kinds of changes needed to move towards this goal. CiscoSs vision to change the world is
accepted 0y employees who are motivated to use the information technologies tools at their
fingertips to move the company in this direction. @mployee approval and vision support help
foster a healthy culture within Cisco.
C(tre
Cisco has 0een honored 0y 0eing in many annual V5est Company to :ork BorW lists. A
healthy company culture keeps employees motivated and happy. Cham0ersS values have
0een driven down throughout the organi?ation. Slogans are transformed into reality 0y
educating and uniting employees around the companySs goals. The message is clear3
customers are the priority, focus on their needs and providing solutions to make them
successful. @mployees respond positively to culture that emphasi?es customer satisfaction
0ecause it translates into 0eing part of an organi?ation that 0elieves in quality. .iven CiscoSs
product line and e-0usiness foundation it is no surprise that Cisco has 0een identified as
having an VInternet cultureW. @mployees are computer savvyF they recogni?e and accept the
use of computer 0ased information systems. Aany employees are a0le to telecommute due to
the IS systems implemented.
A 0ig part of this healthy culture stems from employee empowerment and the motto, Von7t
ask for permission, ask for forgiveness laterW. @ncouraging employees to take risks, to go
forward with their ideas, creates an e(citing work environment. &eople are not stuck doing
the same monotonous tasks day after day. @mpowerment is also tied to communication, the
a0ility for every employee to ask questions and make suggestions. @ach month Cham0ers
holds a V0irthday 0reakfastW session where any employee who had a 0irthday that month can
ask questions. The goal is to allow employees who are not involved in senior management
meetings to get a chance to listen and contri0ute.
Cham0ers 0elieves CiscoSs emphasis on giving 0ack to the community has helped shape
Cisco culture. /ther factors promoting a strong culture include unique employee centered
programs like the technically sophisticated childcare service in Silicon Malley. CiscoSs Bamily
Connection is a childcare center for over 1## children. The center has classrooms and
playgrounds with I&QTM technologies that let parents check on their child from their desktop
at any time. &arents are delighted to have their children in this on-site childcare center. 4astly,
educational opportunities and reward programs have helped facilitate a strong company
culture. CiscoSs success and the individualsS success are cemented through employee stock
award programs
In7ormation System Inte9ra( to t4e Bsiness
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Working of Cisco Systems SWOT Analysis
If CiscoSs information systems stopped functioning for any e(tended period of time Cisco
would 0e wiped off the map. Cisco is synonymous with e-0usiness, with online applications.
+ot only would customers lose faith in a company that failed to keep their own products
working 0ut virtually all of communication and transaction channels would disappear. CiscoSs
streamline 0usiness processes would 0e inoperative. There is no way that Cisco would 0e a0le
to resolve this pro0lem quickly. Jow would the $#G of customer orders currently made
online 0e received and filledY Jow would the lost online technical support information 0e
accessedY Cisco Systems would face a maOor irresolva0le consequences if their information
systems shutdown.
;in&a9e to S%%(iers and Bsiness "artners
CiscoSs glo0al network was e(tended to their 0usiness partners and suppliers3 sharing
accurate, timely data. This system has instantaneous sharing of data a0out supply, demand,
design, finance and manufacturing. Through the sharing of critical knowledge, process times
and decision making has 0een reduced from days to minutes or seconds. &artners , suppliers
and Cisco 0enefit from this close relationship that improves responsiveness and efficiency.
Suppliers now have the tools to do their own forecasting, to 0etter manage their costs and
inventory. The streamlining of supply chain management has allowed Cisco to reduce costs,
get products to market faster, increase value to customer and guarantee the delivery process.
There is a definite competitive advantage in a link to suppliers that is so powerful that Cisco
products get delivered to the customer without a Cisco employee ever touching the product.
;in&a9e to Cstomers and Cstomer Ser#ice
Through the use of information systems Cisco was a0le to redefine their connection to
customers and customer service. As previously cited, customer satisfaction in the early *$$#s
was dangerously low, something had to change. There were too few employees to effectively
run a call center and the cost to employ the num0er of employees needed to sustain the
growth rate was e(or0itant. Customers now diagnose network pro0lems and access technical
data through the Technical Assistance Center, CTACE on CC/ or use TAC to communicate
with Cisco employees.
Customers can also place and customi?e orders using CC/ as well as research products and
end-to-end solution alternatives. CustomersS primary interaction with Cisco is through CC/,
making user-friendliness and user approval a must. Cisco runs one of the largest usa0ility
testing programs in the world for their we0site. Customers and engineers are videotaped and
interviewed to identify parts of the site with navigation pro0lems. This feed0ack allows Cisco
to make frequent changes resulting in improved user convenience and e(perience.
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Working of Cisco Systems SWOT Analysis
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Working of Cisco Systems SWOT Analysis
!. A 5I.A; A.A;YSIS O5 CISCO
SYSTEMS
T4e Sccess O7 Cisco Systems
Cisco has had their ups and downs, e(treme ups and e(treme downs. They had a momentous
0eginning with record growth and sales. 5y "###, Cisco was named the VworldSs most
valua0le companyW with a market capitali?ation of almost D=## 0illion. They were one of the
fastest growing companies in the world pushing the envelope with their innovative
technologies. The tech recession hit the unsuspecting company hard and fast. 5y "##*,
CiscoSs stocks had plummetedF they were forced to have layoffs and incurred a 0illion dollar
net loss. Cisco was in pain and forecasters predicted the worst. Cisco surprised the industry
critics 0y 0eating the odds with a strong come0ack. Today, Cisco is recovering, doing well,
0ut still struggling to regain the position they held a few years ago.
A.Sccess o7 Bsiness Strate9y and In7ormation Tec4no(o9y Use
to +ate
Cisco is the leader in the network equipment industry. Their sales, profits, and revenue per
employee surpass all competitors. Implementation of 0old strategies, including information
technologies and e-0usiness processes has made this a reality. Cisco has continued to grow
and e(pand glo0ally Cwith the e(ception of the layoffs in "##*E with the help of information
technologies that connect their customers, employees, investors and partners. 5usiness
processes have 0een streamlined 0y information technologies that share accurate real-time
data.
Tec4no(o9y and In7ormation Systems
There is no dou0t that technologies and information systems have made Cisco the world-class
leader they are today. Information systems like Cisco Connection /nline, CC/, Cisco
@mployee Connection, C@C and AC/, Aanufacturing Connection /nline have helped Cisco
increase employee efficiency to 0ecome one of the most productive companies. These
systems have also set Cisco apart from their competitorsF they are the foundation of CiscoSs
competitive advantage. They are the companySs main provider of value to the customer.
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Working of Cisco Systems SWOT Analysis
These systems along with technologies like I&QTM and :4A+s have saved Cisco money
through cost avoidance and workforce ma(imi?ation, while providing value to the customer.
Telecommunication technologies have ena0led Cisco to complete over !#G of their sales and
technical training online. They have saved 1#-=#G in costs compared to the typical e(penses
of travel and traditional classroom training.

Access to real-time information has 0een a critical success factor for Cisco. The companySs
decision to link employees, customers, partners and suppliers through a glo0al
network has 0een 0eneficial to all parties, Bigure Information technologies have empowered
Cisco employees who can access relia0le data to forecast and make decisions. An e(ample of
this access is the automated financial 0usiness process. /ne of CiscoSs most impressive
technical achievements 0riefly mentioned a0ove is their virtual close. Cisco is a0le to close
their 0ooks within "1 hours 0efore the end of a quarter, a task that takes most companies
weeks to accomplish. The accomplishment isnSt so much the quick close at the end of the
quarter 0ut CiscoSs continuous access to real-time hard num0ers like revenue and orders, not
Oust estimates. :ith real-time management accounting Cisco is 0etter a0le to maintain control
in a dynamic environment and avoid financial surprises.
Accom%(is4ments
Cisco is a trail0la?er. They were the first ones to develop and market routers, the first network
equipment devices. They were the first industry company to implement e-sales and e-support
to enhance their value to customers. Cisco is not afraid to take risks. &roOects like CC/ and
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Working of Cisco Systems SWOT Analysis
I& Telephony network integration could have failed and cost Cisco greatly. Some proOects
have failed 0ut the positive gains far e(ceed the negative losses and Cisco will continue to
sponsor new endeavors.
Cisco is an enthusiastic user of the products that they sell. They are their own 0est customer,
providing a great e(ample of how to 0enefit from network infrastructure technology. @very
Cisco 0usiness process employs networked technology3 streamlining their customer,
employee, supplier and partner interactions to decrease costs and accelerate innovation. @d
8o?el, CiscoSs previous Chief Technology /fficer e(plains that VC@/s didnSt want to see a
0o( KrouterL. They wanted to see how a company could 0e run. All of our competitors were
saying, XAy 0o( is faster, itSs cheaper.S They were competing at the level of 0o(es. They
werenSt talking a0out what you can do with 0o(es.W
C*E
Customers want to emulate this model,
to reap the 0enefits that Cisco has. CiscoSs decision to use their own company as a model has
strengthened their company name and customer willingness to implement new technologies.
Crcia( 5actors 7or Sccess
/ne of the fundamental factors of CiscoSs success has 0een their strong leaders. Cham0ers
and Solvik had the vision that has driven Cisco to the forefront of technology and the
essential focus on customers. Cham0ers is fanatical a0out customers and has instilled this
customer satisfaction emphasis on employees. As &ete Solvik e(plains, 9The goal is to create
a relationship where customers can get access to every aspect of their relationship with our
company over the intranet or Internet9.
C"E
@mphasis on customers inspired the development
and adoption of information systems like Cisco Connection /nline and its customer-facing
applications.
Customer satisfaction and customer support are huge contri0utors to CiscoSs leading position.
Cisco has prioriti?ed the customer from their early days and implementation of CC/. +ot
only does this attention make customers happy and 0oost their loyalty 0ut this focus provides
Cisco with the means of predicting future trends. If Cisco can continue to anticipate
customerSs future needs they will 0e a0le to maintain their competitive advantage.
In todaySs stressed economy companies are reluctant to take risks. Customers need to feel
secure with their decision to purchase a product or end-to-end solution. 5rand name
dependa0ility and history are factors that have helped Cisco maintain their dominant position
within the network equipment industry. +etworks today are implemented in mission critical
systems. Customers want to purchase equipment from companies with a strong history and
0right future. Cisco, unlike their small start-up competitors is an e(ample of a company that
has weathered the test of time. Current and future marketing campaigns are introducing Cisco
to new customers and strengthening their company name.
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Working of Cisco Systems SWOT Analysis
B. T4e E77ecti#e "osition o7 Cisco 7or t4e 5tre
Can Cisco SystemSs phenomenal strength and worldwide dominance withstand the test of
timeY Bour years ago investors, employees and customers alike were asking the question VIs
Cisco going to surviveYW uring CiscoSs free-fall days people werenSt so sure of the answer.
Cham0ers was confident though, he 0elieved Cisco would rise again and he was correct.
Continued emphasis on the customer has postured Cisco well for the future. @(ceptional
customer support and service are strengths at Cisco and will continue to 0e an asset. TAC,
CiscoSs technical assistance center provides customers with "1Q> access to all technical data.
Systems monitor customer satisfaction and programs like customer usa0ility testing are used
to pinpoint areas that need improvement. Customer focus gives Cisco the a0ility to predict
the future needs of customers and industry trends. Customers are growing more sophisticated
and demanding. If Cisco understands the customer needs they will 0e a0le to offer innovative
solutions and sustain their competitive position.
/ne of the maOor future concerns for Cisco is what will happen when the company loses John
Cham0ersY VIn the fall of *$$$, John Cham0ers told the Cisco 0oard that he would stay
through "##1F he also said that he might stay for *# years if everyone would have him.W It is
"##1 and although there have 0een no announcements, this could 0e one of Cham0ers last
years as Cisco C@/. Cham0ers has not identified a num0er two or group of potential
successors, there is no apparent heir. :ill Cham0ersS heir 0e a0le to carry on Cham0ersS
legacy and 0uilt upon CiscoSs success storyY Cisco grew from D*." 0illion in annual revenue
to their current run-rate of appro(imately D*$ 0illion under Cham0ers. Cisco stock increased
*#,### percent since Cham0ers took over as C@/. Is there another person who can persuade
companies to Ooin the Internet crusadeY Can Cisco employees 0e motivated under someone
elseSs leadershipY If John Cham0ers personally mentors a replacement and eases him or her
into a leadership position, they will have a good chance of success.
As the 6nited States economy and glo0al economy improves, network equipment sales and
profits will increase. Corporations that delayed capital spending for network upgrades during
the recession will not survive unless they invest in their network. /ther
less networked countries like China have 0egun to 0uild their network infrastructure and
more countries will follow. There is a large opportunity for growth in the future. The num0er
of Internet users and e-0usinesses is growing at a phenomenal rate. Cisco is in an e(cellent
position with a name that 0oth companies and governments recogni?e and trust. Aany
smaller potential competitors did not survive the technology crash and new start ups will need
to prove themselves. Cisco will continue to 0e profita0le and has some time 0efore up and
coming companies like Juniper and @(treme present a real threat. These companies are
smaller, agile and are producing faster networking equipment, at a lower price. :ith a smaller
product line, these companies are also a0le to get products to market much sooner than their
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Working of Cisco Systems SWOT Analysis
giant competitor. Jowever, many maOor corporations got 0urnt recently 0y failed start ups
and will not trust another small company with their network. Cisco will profit from this
e(perience. Cisco will also face pro0lems if they continue to fail to 0reak into the
telecommunications market. This is a huge market that will continue growing and Cisco has
not made any advances despite their many attempts.
The Internet )evolution is happeningU In *$!$ there were !#,### Internet hosts, 0y *$$=
there were *1,H"',### hosts and *##,### we0sitesF two years later there were "$,=>#,###
Internet hosts and *,!H1,>*# we0sites. In "##", there were a staggering *1>,H11,>"H Internet
hosts and H=,=!$,##! we0sites. The world is changing, Cham0erSs Internet )evolution is
happening and Cisco is playing a maOor role. Cisco is routing the future, changing the way
you and I live, work and play.
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Working of Cisco Systems SWOT Analysis
$.CiscoBs Or9ani-ationa( +esi9n C
Strctre
esigning Channels of istri0ution
Cisco Systems3 Aanaging the .o-to-Aarket
&roduct design and development.
Indirect sales and distri0ution through resellers 0ecame the maOorsales channel ,its
Vvalue-added resellerW CMA)Ewas the most successful indirect sales channel strategy
at that time.
$.1.CiscoBs Or9ani-ationa( +esi9n C Strctre and its
Co((a)orati#e A%%roac4 to +ecision Ma&in9
Cisco Systems, Inc. CCiscoE, an Internet
technology company, had an
organi?ational structure comprising of
various cross-functional teams. The key
decisions in the company were taken 0y
councils, 0oards and working groups.
These committees Caround =# as of "##$E
working at different levels were cross-
functional in nature, and according to the
company, lent Cisco speed, scale,
fle(i0ility, and rapid replication.
Cisco had made the shift to this type of
organi?ational structure in "##* and had
refined it in su0sequent years. According
to John T. Cham0ers CCham0ersE, the
Chairman and C@/ of Cisco, the
company had reorgani?ed to 0reak free of
the silo culture in the company prior to
"##*, so that it could remain agile and
innovative in a rapidly changing industry.
The company felt that the traditional command-and-control model had lost its relevance, and
the future would 0e a0out colla0orate models of decision making. Je also claimed that the
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Working of Cisco Systems SWOT Analysis
new organi?ational model had served the company well and helped implement its aggressive
growth strategy amidst the economic downturn.
Industry o0servers and organi?ational e(perts were divided in their opinion a0out Cisco7s
organi?ational structure and approach to decision making. :hile some industry o0servers felt
that such a model was effective, others felt that the management-0y-committee approach
would slow down decision making and impede innovation. Some e(perts were e(tremely
critical of Cisco7s organi?ational model. 5ut others 0elieved that if Cisco could further refine
the model 0y addressing some of the lacunae associated with it, it could very well 0e adopted
more widely and 0e accepted as a radical management innovation.
Isses<
To understand the various issues and challenges associated with organi?ational design.
iscuss the pros and cons of different types of organi?ational structures and in the
light of this analysis, critically analy?e Cisco7s organi?ational structure.
iscuss the pros and cons of Cisco7s approach to decision making.
iscuss ways in which the organi?ational model at Cisco can 0e improved further.
3ationa(e o7 t4e 3eor9ani-ation
Speaking a0out the organi?ations structure, Cham0ers, said, 9/ur organi?ation structure
leverages the power of communities of interest which we call councils which we 0elieve are
D*# 0illion opportunities, 0oards that we see as D* 0illion opportunities and working groups.
How it Started
The idea for the new structure occurred during the economic down turn in "##*, when Cisco
wrote off 6SD"." 0illion in losses. )eali?ing the Cisco7s hierarchical structure was preventing
it from moving fast, Cham0ers started grouping e(ecutives into cross-functional teams.
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Working of Cisco Systems SWOT Analysis
'.Ty%es o7 Or9anisationa( +esi9n C
Strctre Cisco Ada%ted
Cisco Systems a company that has reinvented itself time and again has proved that the key to
corporate success lies in an organi?ational structure that is 0oth responsive and in tune with
the changing industry and market requirements.
"rodct Based
&hase-*3 The @mergence of a .iant
In April-*$$> Cisco structured its products and solutions into three customer segments3
@nterprise, SmallQAedium 0usiness, and Service &rovider. The organi?ational structure was
crafted to address two maOor new market opportunities at that time3 the service provider
migration to I& services and the adoption of I& products 0y small and medium-si?ed
0usinesses through channel distri0ution. The change was a marked departure from a product-
focused structure, which had 0een CiscoSs hallmark since inception 0ack in*$!>, to a
customer-oriented, solutions-0ased structure.
All of CiscoSs research-and-development and solutions marketing would 0e organi?ed under
the three 4ines of 5usiness. The 4ine of 5usiness teams defined and implemented
0oth market and operational strategies that ena0led them to deliver end-to-end solutions to
their target customers. The new organi?ational alignment meant increased focus on specific
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Working of Cisco Systems SWOT Analysis
customer segments to provide complete end-to-end solutions, including integrated software,
hardware and network management. The different market segments at the time had nothing in
common. The fact that Cisco was riding high on the imploding growth in the networking
industry meant Cisco did not have to worry so much on costs since margins very high.
An analysis on the effectiveness of V&roduct 5asedW organi?ational structure reveals the
following attri0utes.
&roduct Centric /rgani?ation @ffectiveness
8nowledge Sharing 4ow
A0ility to reduce Costs 4ow
Bostering Innovation Jigh
Control and Coordination Aedium
Addressing Customer Q Aarket requirements Jigh
@fficiency in )esource 6tili?ation 4ow
Centra(i-ed or9ani-ation
&hase-"3 The ot-Com Aeltdown
In August-"##*, Cisco Systems realigned the company7s focus around changing industry and
customer requirements and to reinforce the company as a dominant force in the networking
industry. Customer segments and product requirements that were distinct in the past had
0ecome 0lurred. The downturn in the networking industry that followed the 0road meltdown
across the technology industry in early "### meant Cisco had to act quickly to minimi?e
costs and reduce overhead. To respond to these changes Cisco ?eroed in on a centrali?ed
engineering and functionally driven organi?ational structure.
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Working of Cisco Systems SWOT Analysis
The centrali?ed structure was developed to 0ring Cisco closer to its customers, to encourage
teamwork and to eliminate product and resource overlaps and more importantly to provide
the industry7s 0roadest family of products united under a consistent architecture designed to
help CiscoSs customers improve productivity and profita0ility. The rationale 0ehind a
centrali?ed organi?ational structure was to design all equipments using a 0aseline standard
and architecture, which lowered the cost of product development and manufacture. A
centrali?ed organi?ational structure fostered deeper sharing of knowledge and components
across Cisco product groups while promoting more consistent manufacturing and testing to
reali?e economies of scale.
A centrali?ed organi?ation structure ena0led Cisco to respond successfully to
changing market conditions. The companySs focus was on reigning in costs and respond to
revenue shortfalls from declining growth prospects within the industry. The emphasis shifted
from delivering new product launches or innovation to survival. An analysis on the
effectiveness of VCentrali?edW organi?ational structure reveals the following attri0utes.
Centrali?ed /rgani?ation @ffectiveness
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Working of Cisco Systems SWOT Analysis
8nowledge Sharing Jigh
A0ility to reduce Costs Jigh
Bostering Innovation 4ow-Aedium
Control and Coordination Jigh
Addressing Customer Q market requirements 4ow
@fficiency in )esource 6tili?ation Jigh
Technology /rgani?ation
&hase-H3 Convergence
In ecem0er-"##> Cisco announced a new VTechnology /rgani?ationW structure to address
the challenges imposed 0y the ne(t phase of Internet growth and productivity centered on the
demands of tremendous growth in video, the revolution in the data center, colla0orative and
networked :e0 ".# technologies, where the network emerged as a platform for all forms of
communications and data management. The new organi?ational structure ena0led Cisco to
position itself for growth in new market and cater to new and emerging markets in China,
5ra?il and India.
VThe Technology /rgani?ationW3
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Working of Cisco Systems SWOT Analysis
The changes were designed to enhance Cisco7s effectiveness and efficiency glo0ally in
delivering integrated products and solutions, as well as to provide greater synergies in its
development process. The need for innovation and a0ility to cater to
different marketsegments that had different product requirements necessitated a move toward
a product-technology 0ased organi?ational structure. :ith the industry evolving towards a
services 0ased &ay-As ;ou .oW revenue model Cisco had to develop products with
scala0ility, relia0ility and adapta0ility in mind. The emphasis on software and centrali?ed
nature of the Software .roup allowed Cisco to access resources glo0ally while driving
integration and interopera0ility across all of Cisco product lines.
An analysis on the effectiveness of the VTechnology /rgani?ationW structure reveals the
following attri0utes.
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Working of Cisco Systems SWOT Analysis
Technology Centric /rgani?ation @ffectiveness
8nowledge Sharing CAcross ivisionsE Aedium
A0ility to reduce Costs 4ow
Bostering Innovation Jigh
Control and Coordination Aedium - Jigh
Addressing Customer Q market requirements Jigh
@fficiency in )esource 6tili?ation Aedium
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Working of Cisco Systems SWOT Analysis
*.CS3 "ro9rams at Cisco
Investing in local communities to solve glo0al challenges
Cisco invests in scala0le and self-sustaining programs that use technology to meet some of
society7s 0iggest challenges. :e deploy our e(pertise, technology, partnerships,
and financial resources to help 0uild thriving, prosperous communities that improve people7s
lives and support our 0usiness. /ur social investment programs focus on four areas where we
0elieve Cisco CS) can add the most value and make a significant and lasting impact.
Access to Edcation
/ur innovative programs make use of networked technology to prepare people of all ages
worldwide to succeed in a glo0al, technology-driven society.
Connected +orth3 Connecting a remote Canadian community to education and
healthcare
+etworking Academy3 5uilding the workforce of the future 0y training * million
students each year in ICT
"*st Century Schools Initiative3 A model of technology integration in education
after a disaster
Connected Hea(t4care
Cisco colla0oration technologies 0ring healthcare specialists to the patients who need them,
reducing the stress and e(pense of traveling to receive care.
Connected Jealthy Children3 /vercoming the glo0al shortage of pediatric specialists
Connecting Sichuan3 )e0uilding and reinventing healthcare after an earthquake
strains health providers
Jordan Jealthcare Initiative3 A national initiative 0rings specialty care to rural towns
Economic Em%owerment
Investing in human potential through programs that use ICT to connect challenged
communities and underserved populations to resources that change lives.
Community 8nowledge Centers3 A model for economic development through ICT
access
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Working of Cisco Systems SWOT Analysis
.irls in ICT ay3 Attracting more girls and women to the technology field
&alestinian Investment Commitment3 Stimulating long-term, sustaina0le growth in
a promising IT industry
6.S. Meterans &rogram3 Training, connecting, and hiring veterans for high-demand
Oo0s
Critica( Hman .eeds and +isaster 3e(ie7
Speeding the delivery of essential resources through ongoing programs and disaster response.
.lo0al Junger )elief Campaign3 Aillions to food agencies worldwide each year
from employees and gift matching
Cisco Tactical /perations3 @(pertise and equipment to restore communications
after disaster
&roOect Samudaya3 Blood-ravaged villages in India re0uilt with improved
healthcare and education
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Working of Cisco Systems SWOT Analysis
6.SAOT Ana(ysis o7 Cisco Systems
S:/T Analysis
Strength
*. .eographically iverse 5usiness
". @conomies of scale lower cost and increases margin
H. iversified into many segments and tapping sophisticated market
1. Aarket leading position 0rings many 0enefits
'. )o0ust financial performance
=. 8nown for its strong ) % division
>. A culture that e(periments produces 0etter long term values
:eakness
*.eclining storage networking market
". :eak presence in 5&/ technologiesQmarket compared to glo0al
leaders
/pportunity
*.@(pansion through Strategic Alliances and Acquisitions
". Smart grid infrastructure could increase demand
H. :i-Bi Jome Calling and mo0ile 0road0and
1. ata intensive applications
'. ata Aining
Threats
*.The use of cloud servers is lowering sales and especially profits
margins for cisco7s core 0usiness.
". /pen Source Competitors
H. Jigh competitive rivalry
1. Mirtuali?ation
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Working of Cisco Systems SWOT Analysis
8.Conc(sion
Cisco is the leader in the network equipment industry. Their sales, profits, and revenue per
employee surpass all competitors. Implementation of 0old strategies, including information
technologies and e-0usiness processes has made this a reality. Cisco has continued to grow
and e(pand glo0ally Cwith the e(ception of the layoffs in "##*E with the help of information
technologies that connect their customers, employees, investors and partners. 5usiness
processes have 0een streamlined 0y information technologies that share accurate real-time
data. Cisco Systems a company that has reinvented itself time and again has proved that the
key to corporate success lies in an organi?ational structure that is 0oth responsive and in tune
with the changing industry and market requirements.
/rganisation design is not simply a0out mapping out an organisational structure, 0ut also
a0out how the organisation is aligned with all other aspects, functions, processes and
strategies within the 0usiness. /rgani?ational design is the way an organi?ation is to 0e
structured and operated 0y its mem0ers. It is 0oth a plan and process.
Cisco has designed and structured its organi?ation in many ways like as per the technologies,
products, various issues etc and thus achieved success through it.
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Working of Cisco Systems SWOT Analysis
1:.Ae)(o9ra%4y
Anderson, &hilp, Trim0le, Chris, .ovindaraOan. VCisco Systems, @volution to
@-5usiness.W "##" Tuck 5usiness School at artmouth
Z http3QQm0a.tuck.dartmouth.eduQcglQdownloadsQ*###*[Cisco[A.pdf\
Cisco Systems www.cisco.com
VCisco Systems Shows its Appreciation.W Septem0er "", "##H. Binistar Corp.
Zhttp3QQwww.electronicstalk.comQnewsQfniQfni**'.html\
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Working of Cisco Systems SWOT Analysis
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