...Data Market Cap $152.07B Total assets $68.128B Valuation EPS (ttm) $1.04 P/E (ttm) 25.58 Profitability & Effectiveness (ttm) ROA 9.7% ROE 16.8% Profit Margin 17.0% Oper. Margin 25.3% Analyst: Jeff Griffith jmgxb6@mail.missouri.edu JOHN LOTHMAN jdlrzf@mizzou.edu Overview: Cisco Systems Inc, currently the largest company in the Communications Equipment industry, offers a variety of communications products and services. The company supplies most of the Internet Protocol (IP) networking equipment used for the Internet and is the world’s largest supplier of high-performance computer internetworking systems. The company offers products in four segments: switches, routers, advanced technologies, and other. As of the end of Cisco’s fiscal year in July 2009, switches made up 41% of sales. Cisco has become the dominant market...
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...Cisco Systems, Inc.: Implementing ERP Introduction Cisco Systems Inc. was founded in 1984 by two of Stanford University’s computer scientists. In 1990, a matter of just six years from the start-up date, Cisco became publically traded. With the massive growth of Internet Technologies, demand for Cisco products increased dramatically, resulting in Cisco dominating the marketplace. The contributing factor to Cisco’s dominating presence in the market is due to the company’s primary product, the “router”. This is a combination of hardware and software that acts as a traffic cop on the complex Transmission Control Protocol and Internet Protocol (TCP/IP) networks that make up the internet as well as corporate intranets. TCP and IP networks provided a robust standard for routing messages between LANs and created the potential to connect all computers on an ever-larger Wide Area Network (WAN). Financially, the company experienced consistent growth from July 30, 1995 up until July 25 1998. Using figures provided in Exhibit 1 of the case study, it can be calculated that Net Sales increased a whopping 279% from 1995-1998. The year 1997 proved to be a milestone for the company. It was the first year for the company to feature on the Fortune 500 list. Cisco was ranked among the top five companies in return on revenues and return on assets. Some industry pundits predicted Cisco would be third dominating company alongside Microsoft and Intel, to shape the digital revolution. The reasoning...
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...Cisco Case Study Cisco Systems, Inc. (NASDAQ: CSCO) is an American multinational corporation headquartered in San Jose, California, United States, that designs and sells consumer electronics, networking, voice, and communications technology and services. Founded by Len Bosack and Sandy Lerner, a married couple who worked as computer operations staff members at Stanford University, along with Nicholas Pham, founded Cisco Systems in 1984. For the first time in a decade Cisco experienced its first negative quarter in 2001. The loss of earnings was due to the economic down. Their sales declined by 30%, inventory surplus was written off as a loss to the tune of $2.2 billion, 8,500 workers were laid off and stock prices plummeted by almost 60%, as of April 6, 2001 stock prices were $13.63 per share, down from $82 per share 13 short months earlier. Cisco leaders blamed the economy for its decline; the economic downturn was only partly to blame for Cisco’s problem. To analyze and interpret the article What Went Wrong at Cisco in 2001, I will first explain what actually went wrong, second I will Show a SWOT analysis to identify Cisco’s strengths, weaknesses, and threats, third we will analyze and discuss the nature and problems of the Cisco’s business-level and corporate strategy, last I will present my solutions and recommendations for Cisco in the future. What Went Wrong at Cisco In 2001? Cisco’s problems were only magnified by the economic downturn but there had been signs of...
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...Nicolas de Gonneville, Jeremy Lipszyc, Rayan Mekouar Corporate Strategy Cisco System: New millennium – new acquisition strategy? 1. What was unique in the way Cisco managed its acquisitions in the 90’s? During the 90’s, Cisco has based its growth strategy mainly on acquisitions. From the first acquisition of the company called “Crescendo” in 1993, Cisco has bought more than 45 firms until 1999. Cisco can be considered as unique in its way of managing its acquisition deals because of the methodology that they have created and the kind of expertise that they have developed. The Cisco’s acquisition framework focuses on 2 main steps: targeting and integration. § Targeting: In order to enter in niches markets, to acquire a technology, to add a product to its range or to reinforce a specific process, Cisco’s strategy was based on the purchase of smaller and innovative companies. The selection process includes 6 main criteria: -‐ size; focus mainly on small companies, -‐ growth; fast growing companies, -‐ strategy; Cisco is looking for focused companies with a strong expertise, -‐ entrepreneurial spirit, -‐ similarity in culture, -‐ and geographical proximity especially for the largest targets. Cisco is looking for good fit, complementarity of visions, quick wins for shareholders and long terms wins for all stakeholders. § Integration According to Cisco’s management, post-acquisition integration...
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...Cisco Systems Uses Its Culture for Competitive Advantage Case Study 1. What are the observable artifacts, espoused values, and basic assumptions associated with Cisco’s culture? Explain. The above terms are also known as the three fundamental layers of organizational culture, each varying in outward visibility and resistance to change an each level influences another level. Observable artifacts are the most visible and also cosist of the physical manifestation of an organization’s culture (Kreitner and Kinicki,2010, pg.65). An example of this when the CEO John Chambers uses just three words to describe the benefits of the San Jose networking giant’s management system: “speed, skill, and flexibility.” This is relates a published list of values by Cisco. Another example is with Manny Rivelo, a senior vice president at Cisco Systems, that 70% of his compensation is based on the council’s ability to meet revenue targets and collaborate. As to espoused values, they represent the explicitly stated values and norms that are preferred by an organization. In Cisco’s case, it was Chambers’ idea originated by a loss of $2.2 billion loss in 2001, which involves grouping executives into cross-functional teams. This concept would lead to faster decision making. Basic assumptions are unobservable and represent the core of organizational culture. I feel that Rivelo’s one quote sums of the basic assumptin for Cisco, “I’m on a litany of them-three councils, maybe six boards, and five working...
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...Background In 1995, John Chambers joined Cisco Systems as president and CEO. After six years under the supervision of Chambers, the company went from generating $2.2 billion in annual sales to $22.3 billion. As a result of the market downturn in 2001, the company suffered its first loss and laid off 18% of its workforce. Chambers quickly realized Cisco was in need of significant organizational restructuring if Cisco were to survive and thrive the downtown. This change shifted the company from a decentralized firm that only focused its three work silos of Marketing, Engineering and Sales to segregated and specific customer groups to a centralized firm that focused on collaboration and relevant technologies for given customer groups. This shift in organizational restructuring significantly reduced product and resource redundancies – a major contributing success factor for Cisco’s market position today. The Problem The implementation of the cross-functional business councils greatly strengthened both Cisco’s competitive position as well as their organizational culture. However, Cisco now faces the problem of how to sustain and implement the new internal governance system across new and expanding business lines within the company in addition to maintaining the new collaborative culture while retaining its customer-centricity focus. Adjustments will need to be made to ensure that systems can be scaled to address new market transitions. The three councils that were originally...
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...The problem bothered Cisco a lot in 2001 is an example of company doesn’t do anything about centralized monitoring. The decisions may different with company strategy, which may lead a waste of human resource and money. This case shows the importance of collaborating between all departments in business. After reading this case, bunch of questions jump out of my mind: would I approve the call center project if I were Boston? If yes, what kind of benefits will bring to company? If no, why? Admittedly, call center project was very important and valuable, but so were many others considered by BPOC. So the main questions for approving call center project are: would its benefits are much more than risk? Would it against other projects? Would it also benefit to other functional areas? How much will it cost- the percentage in total IT budget, people and training cost? To answer the question of if I will approve call center project, I need the answers of the questions I mentioned before. However, I can’t get perfect answers for these questions. Besides, the most urgent thing for Cisco now is to upgrade its ERP project. Even though Cisco had ERP system to store all the data, there was no common business logic allowed all the applications to read and interpret the raw data in a consistent manner. So it is more important to upgrade ERP system to capture more and accurate information about the customer. It would be better if Cisco do the ERP upgrade first, and then consider the call...
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...when the CEO John Chambers uses just three words to describe the benefits of the San Jose networking giant’s management system: “speed, skill, and flexibility.” This is relates a published list of values by Cisco. Another example is with Manny Rivelo, a senior vice president at Cisco Systems, that 70% of his compensation is based on the council’s ability to meet revenue targets and collaborate. As to espoused values, they represent the explicitly stated values and norms that are preferred by an organization. In Cisco’s case, it was Chambers’ idea originated by a loss of $2.2 billion loss in 2001, which involves grouping executives into cross-functional teams. This concept would lead to faster decision making. Basic assumptions are unobservable and represent the core of organizational culture. I feel that Rivelo’s one quote sums of the basic assumptin for Cisco, “I’m on a litany of them-three councils, maybe six boards, and five working groups”, suggests that being involved in numerous groups makes the company as a whole grow faster and be better ready for the economy. 2. Use the competing values framework to diagnose Cisco’s culture. To what extent does it possess characteristics associated with clan, adhocracy, market, and hierarchy cultures? Discuss. I feel that Cisco Systems use a clan and adhocracy culture rather than a market and hierarchy. It really depends on the company and what...
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...CISCO CASE STUDY QUESTION 1 How is building a brand in a business-to-business context different from doing so in the consumer market? ANSWER First of all we must describe what is meant by business-to-business. Business-to-business is a transaction that occurs between a company and another company, as opposed to a transaction involving a consumer (R wright, 2004). R .Wright further elaborates it as a term that may refer to a situation where one business makes a commercial transaction with another. This can happen through a business sourcing materials for their production processes or a business re-sells goods and services manufactured by other companies. Creating a strong brand that is able to set a business apart from other companies is always an important job. However for this to succeed knowing who the intended clients are, will assist the company in determining how to build their brand. According to Nick Kendall (2015), he describes a brand as a product, service or concept that is publicly distinguished from other products, services or concepts so that it can be easily communicated. e.g.(sign, symbol, words or combination of these, employed in creating an image that identifies a product). Business-to business branding requires that the business be willing to accept the time to completely educate the professional buyers about the product, instead of mass marking and small advertisements. The reason to have professional buyers is because they are already well informed...
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...Cisco IT Case Study – August 2013 Big Data Analytics How Cisco IT Built Big Data Platform to Transform Data Management EXECUTIVE SUMMARY CHALLENGE ● Unlock the business value of large data sets, including structured and unstructured information ● Provide service-level agreements (SLAs) for internal customers using big data analytics services ● Support multiple internal users on same platform SOLUTION ● Implemented enterprise Hadoop platform on Cisco UCS CPA for Big Data - a complete infrastructure solution including compute, storage, connectivity and unified management ● Automated job scheduling and process orchestration using Cisco Tidal Enterprise Scheduler as alternative to Oozie RESULTS ● Analyzed service sales opportunities in one-tenth the time, at one-tenth the cost ● $40 million in incremental service bookings in the current fiscal year as a result of this initiative ● Implemented a multi-tenant enterprise platform while delivering immediate business value LESSONS LEARNED ● Cisco UCS can reduce complexity, improves agility, and radically improves cost of ownership for Hadoop based applications ● Library of Hive and Pig user-defined functions (UDF) increases developer productivity. ● Cisco TES simplifies job scheduling and process orchestration ● Build internal Hadoop skills ● Educate internal users about opportunities to use big data analytics to improve data processing and decision making NEXT STEPS ● Enable NoSQL Database and advanced...
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...Cisco Case Study D. i. How did Cisco determine the allocation of the purchase price to specific tangible and intangible assets? (see business combinations in the summary of significant accounting policies in note 2.) Cisco allocates the fair value of the purchase consideration of its acquisitions to the tangible assets, liabilities, and intangible assets acquired. The excess fair value of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. ii. What percentage of the total (gross) assets acquired in the NDS acquisition (excluding liabilities assumed) are comprised of goodwill and other intangibles? Cash and cash equivalents 98,000,000 A/R 199,000,000 Other tangible assets 268,000,000 Goodwill 3,444,000,000 Purchased intangible assets 1,746,000,000 Total 5,755,000,000 % of goodwill and other intangibles of the total (5,190,000,000 / 5,755,000,000) = 90.2% iii. Show the consolidation journal entry that Cisco made to record the purchase of NDS in 2013 Cash 98 A/R 199 Other intangibles 268 Goodwill 3444 Purchased intangible assets 1746 Deferred tax liability 378 Liabilities 372 Cash 5005 iv. 12 additional business acquisitions made by Cisco in 2013 for a total purchase price of $1,977 million. How does Cisco report the purchase transaction in Note 3 in the statement of cash flows in 2013? Why does the amount reported in the statement...
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...text and in reading the Cisco case study, it seems that business-to-business marketing consists of a more direct approach through very specific channels of distribution. Business-to-business success is centered around more personal relationships between the partner companies. In the Cisco case this was demonstrated by Cisco's business to business relationships it developed with Matsushita, U.S. West, and Sony (Cisco). In comparison, consumer marketing is targeted at all the major demographic groups. Consumer marketing aims to capture sales through major retailers thus removing the personal connection that is inherent in the business-to-business relationship. In the Cisco case, it is obvious that throughout the 90's Cisco was extremely successful at working the business-to-business model and focused on technology companies and specific corporations to sale their internet based technologies too. This enabled them to become the largest company in the world in the 90's with over $500 billion in worth, however, they name brand through the consumer market was relatively unknown (Cisco). Cisco began making acquisitions in the 21st century of companies such as Linksys which began their efforts toward consumer marketing, away from business-to-business marketing. Cisco has continued to change its messaging, focus advertising on customers, and worked hard to make its brand image known throughout the world the same as its competitors Microsoft and Apple (Cisco). 2- Is Cisco's plan to...
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...| Case Study on Cisco Systems, Inc | Continuous Assessment | Global Supply Chain Management | | | Table of Contents Table of Figures 3 Question 1. Using an appropriate operations framework outline the challenges/risks faced by Cisco in introducing a new product. 3 Question 2. What are the general operational / supply chain issues in using a Chinese supplier 6 Question 3. Identify and briefly explain the specific risks / rewards in selecting Foxconn as a key subcontractor. 9 Question 4. Recommend, detail and justify operational and supply chain strategies for Cisco. 11 Question 5. Research and reference Cisco's subsequent actions using publically available material and comment briefly 13 Appendices 16 Appendix A 16 Appendix B 17 Appendix C 18 References 20 Project Diary: 26 Table of Figures Figure 2.1 Chinese Traditional Values (Jin et al., 2013). 17 Figure 2.2 Global Rate, Labour and Freight (Kumar et al., 2009). 18 Figure 4.1 Competitive Advantages. (Christopher, M., & Peck, H, 2003)…………...….….....18 Question 1. Using an appropriate operations framework outline the challenges/risks faced by Cisco in introducing a new product. Erhun, Gonclaves and Hopman (2007) state that risk during new product introduction (NPI) process can stem from either an internal or external source, and more critically from either a supply or a demand prospective. The challenge for Cisco during the NPI phase is to utilise an operational framework...
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...Cisco is the infamous routing and networking company that have used ingenious methods of both business-to-business and the consumer marketing. Cisco original product line was intended for sale to other business. Building a brand in a business-to-business context has some notable differences than doing so in the consumer market because it markets to different audience. Branding within business-to-business appears to be more centered on relationships of various companies. This is demonstrated when the company Cisco developed partnerships with Sony, Matsushita, and US West. Constructing a brand in a business-to-business also requires awareness or educational building activities. Cisco launched a television ad campaign to educate the consumer. In those ad campaign facts about the power of the internet where revealed to viewers in a series of questions. The target audience in a business-to-business is small and focused. In 2003, Cisco targeted corporate executives and IT decision makers to sell their products. Erecting a brand in a consumer market is more product-driven than relationship driven than the business-to-business marketing. When Cisco switched from business-to-business to the consumer market, they began producing several home entertainment products than covered a large target audience with various products for music, printing, video, and more. A new marketing brand was also necessary to tap into the emotional buying needs of the consumer market. Cisco began their ‘The...
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...In the past ten to fifteen years, Cisco has changed its marketing channel strategy majorly. While in the past Cisco was only focused on the volume of their business, they reconfigured their strategy to focus in on the value of business. Previously business was transferred through Cisco’s partners and retailers, who worked with customers to make deals and fill orders. Under their newer value-based strategy, their VARs, or value-added channel resellers, work directly with customers to ensure they are receiving the best value products and latest technologies. These VARs were able to work with large accounts as well as small to mid size accounts by offering specializations and value in niche markets or specific regions. Using this method makes it impossible to structure the strategy based on volume, because it is unfeasible to rate resellers effectively based on volume of sales when the focus is so highly placed on quality and value of the sale. Resellers and channel members were rated based on the value that they brought to the table rather than the volume of sales, making it easier for lower-tiered members to gain high status based on the value that they brought to the table. For example, a member that previously did not generate nearly enough sales to be considered a top-tiered reseller would now be able to achieve a higher status if the value of their service and specializations were up to par. This creates a stronger relationship between the customer and the VAR, thus increasing...
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