Case Study for Cisco
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 …show more content…
Management at Cisco failed to recognize fault. CEO John Chambers blame the economy for his company’s failure; he left his management and the software without any blame. Instead of realizing that the overreliance on an inaccurate system and poor inventory control coupled with the economic downturn caused Cisco’s near implosion.
SWOT Analysis Strengths | Weaknesses | * Market share leadership * Strong management team * Accusations * Outsourcing * Technology | * Poor supply chain * High risk in a company relying solely on Virtual Close * No Management Accountability * Outsourcing * Technology | Opportunities | Threats | * Technology * Transformational leadership * Innovation * Lean Production systems | * Competition * Pricing * Substitution * Change in target Market * Brand Loyalty |
Business Level and Corporate Strategy
Cisco’s success was due two main strategies outsources manufacturing and growth through acquisition. This proved to be very lucrative for Cisco before the 2001 crisis. “From the time it went public 11 years ago, Cisco was never not growing. Sometimes its growth was staggering. Its stock split 12 times in the ’90s. Its revenues went from millions to billions to tens of billions as fast as the Internet would let it. At its height, say, May 2000,