Cisco Systems Case Analysis

Essay by PaperNerd ContributorUniversity, Master's July 2001

download word file, 4 pages 0.0

As a leader in Internet networking devices and services, Cisco Systems is facing the threat of losing its strong market share to competitors that are entering its sector. The new companies entering the networking industry are brands that are well recognized and established in other areas. Because Cisco does not have strong brand recognition with smaller and mid size customers, Cisco's bottom line is at risk as the competitors attract those customers that are new to the market. To combat this problem Cisco has two options: one is to increase advertising expenditure to promote Cisco's name to new customers and build current customer confidence, and the other is to enter new markets, such as telecommunications, by buying companies in new market sectors. Because entering new markets and acquiring companies would diversify Cisco and cause the company to grow, it is recommended that they implement this alternative.

Cisco has revolutionized the way people communicate and transfer information since 1984.

The router and switch technologies produced by the company have allowed the development and connectivity of computer networks worldwide. The success of the company lies in the innovative products that speed daily business processes, and the expandability of its current networks. Lead by John Chambers, Cisco has invested in the risky Asian market, making it one of the few technology companies to expand in this area. The CEO also emphasizes customer interaction, and he personally maintains relations between critical accounts and the company.

Cisco's success, however, has sparked the interest of many companies and lured them into entering such a rapidly growing area. The company, which has nearly 80% of the market share, has grown because of its innovative Globally Networked Business concept, which integrates all aspects of business information to increase accessibility to information. The demand for information is growing exponentially,