Cisco Systems
Overall impression of Cisco’s business model – strengths/weaknesses: I found that Cisco has changed its business model several times to reflect changing market needs and economies. In 1993, Cisco had to realize that the growth of the Internet was creating a demand for technology other than their routers. They set about adopting a strategy to become either the number 1 or number 2 player in each market. They planned to have their company own, develop and market an array of network products and standards as the market demanded them. One of their objectives was to provide a complete solution for businesses. They knew the only way to do that was through acquiring other companies with the needed technologies. In 1997, the business model had to change again when John Chambers realized that the future of the Internet was over IP networks. They moved their strategy to all areas of telecommunications from the end-user to the network backbone, focusing on Digital Subscriber Lines, multi-service products, and Is their acquisition/integration strategy a sound strategy (what are the benefits, what are the potential pitfalls with this approach? The acquisition strategy does seem to work for Cisco. It ena
Is it a good idea to buy technology vs. having an internal R&D – what are the advantages/disadvantages of this strategy? I believe the best strategy would be to have a mixture of R&D and acquisition. Cisco is well aware that no one company would be able to develop everything necessary for Internet service. Cisco knows the pitfalls of sticking to one technology and that diversification is the key to success in the future. All acquisition with no R&D would set the company up for failure should some of the acquisitions fail; all R&D with no acquisitions would limit the growth of the company. A diverse strategy could lead to unlimited growth. Is Cisco in danger of becoming a monopoly – what do they offer that gives them a competitive edge in the marketplace? I’m not sure I understand how becoming a monopoly could be dangerous for a company; I would think it would be more dangerous for consumers, as Cisco could then have complete control over prices with no competition. Cisco does not believe they have a monopoly – just check John Chamber’s quote. He knows that competition is always one step behind him. Their competitive edge, of course, is their acquisition process. They know what technology to acquire and how to go about doing it. Their reputation as a fair company also helps in the acquisition process. Their systems are in place to continue to acquire needed technology to keep them in front of the game. bles Cisco to own, develop and market an array of network products and standards, as the market demands them. The process includes investigating buying start-up companies if they decide that it is too far behind its competitors to take the time to build the product from scratch. They knew they couldn’t possibly develop all the products on their own. They target compani
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Approximate Word count = 1219
Approximate Pages = 5 (250 words per page double spaced)
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