Cisco's Systems' Ability to Handle Internal and External Factors.
Cisco's Ability To Handle Internal and External Factors.
Should managers of today's corporations be concerned about the factors that can affect their company's bottom line? Managers of today's corporations must be aware of and responsive to factors that can affect their company's bottom line. The growth and success of an organization is proportional to its ability to handle internal and external factors such as rapid change, globalization, innovation, . Cisco Systems is a model in handling these factors.
Rapid Change.
Cisco's management responds to the rapidly changing environment by keeping lots of cash on hand, being customer-centered, focusing on their core business by engaging in strategic partnering, and maintaining a nearly 100% internet-based customer support, training and order fulfillment system. .
Positive cash flow is another key strategy employed by CEO John Chambers in the response to rapid changes in the industry, especially in the case of would-be competition. Cisco has faced serious challenges from competitors in some part of their primary market about every two years (Meta Group, 2001). Every time Cisco has faced a challenge, it has either won outright or bought out the competitor (Meta Group, 2001). Chambers' policy on cash flow and his ability to keep expenses down and revenue up have helped Cisco be nimble in the face of rapid changes in the competition.
Companies that can respond quickly to customers' needs and changes in customer demands often sell more products and services at a higher profit margin (Hutley et al, 2003). In every industry, it is the needs of the customer that drives the business. Cisco CEO, John Chambers, has often been called the most customer-centered CEO in the industry. In his 1997 annual letter to stockholders, Chambers stated that, "Whatever works best for customers " if we don't have the best technology, we'll acquire it- (Richey, 2002).
