Cisco Systems Business Strategy
Cisco Systems, Inc. is the worldwide leader in networking for the Internet. Cisco's Internet Protocol-based (IP) networking solutions are the foundation of the Internet and most corporate, education, and government networks around the world. Cisco is famous for its routers and switches that link networks and power the Internet. It also makes network access servers and management software. Although the company is very young, it has achieved an enormous growth in the last decade. The computer networking industry is an extremely fast paced business. Technology is constantly evolving, forcing companies to come up with more innovative products. The customers are well informed about the market and very demanding. They can easily switch from Cisco to one of the numerous competitors. The competition is very tough with more companies moving into the networking industry. The laws and regulations are only starting to form, which makes outcome even more uncertain.
However, the rewards are far greater than risks: in 1998, Cisco had net income of more than $1 billion and was growing at 31% rate. The success of the company was due to the groundbreaking research and development, exceptional marketing and excellent staffing.
The SWOT analysis reveals that despite on very strong position in the market, Cisco may lose because of high prices, overconfidence and inflexibility. Nonetheless, the economic conditions are favourable and through globalisation and product innovation Cisco will be able to fight its competitors. In order to remain on top of the industry, the company has to constantly decide in what direction to move. The few alternatives that Cisco's management might consider include implementation of the web services, strategic alliance with a telecommunication company, creating networking products for residential use, venturing into United Kingdom, producing software packages and marketing its internal network system. After...