Cisco Strategic Audit report

Prepared by Presented to
Shady Sayed Nasr Dr. Saneya El Galaly
Mohamed Abdelaziz Mohamed Ali
Mahmoud Zein
Saif sony
Table of content
1. Company Overview
2. Vision, Mission
3. Financial position and stock price
4. Products & Competitors
5. Key success factors
6. PESTL Analysis
7. Issues priority matrix
8. SWOT analysis of Cisco systems: -
a. Internal factors (Strength & Weakness)
b. IFAS Matrix
c. External Factors (Opportunities & threats)
d. EFAS Matrix
9. SFAS
10. TOWS Analysis
11. Porter's Five Forces
12. BCG Matrix
13. Internal & External Matrix
14. Ground strategy matrix
15. Space matrix
16. Strategic Alternatives & Recommended Strategy
17. Action plan
18. Evaluation & Control.
Company overview :
An American multinational technology conglomerate headquartered in San Jose,
California, in the center of Silicon Valley. Cisco develops, manufactures and sells networking
hardware, telecommunications equipment and other high-technology services and
products. Through its numerous acquired subsidiaries, such as OpenDNS, WebEx, Jabber
and Jasper, Cisco specializes into specific tech markets, such as Internet of
Things (IoT), domain security and energy management.
Cisco Systems was founded in December 1984 by Leonard Bosack and Sandy Lerner,
two Stanford University computer scientists. They pioneered the concept of a local area
network (LAN) being used to connect geographically disparate computers over a
multiprotocol router system. By the time the company went public in 1990, Cisco had a
market capitalization of $224 million. By the end of the dot-com bubble in the year 2000,
Cisco had a more than $500 billion market capitalization.
 1984–1995: Origins and initial growth
 1996–2005: Internet and silicon intelligence
 2006–2012: The Human Network
 2012-Present day:
On July 23, 2013, Cisco Systems announced a definitive agreement to acquire Sourcefire for
$2.7 billion. On August 14, 2013, Cisco Systems announced it would cut 4,000 jobs from its
workforce, which was roughly 6%, starting in 2014. At the end of 2013, Cisco announced poor
revenue due to depressed sales in emerging markets, caused by economic uncertainty and
by fears of the National Security Agencyplanting backdoors in its products.
In April 2014, Cisco announced funding for early-stage firms to focus on the Internet of
Things. The investment fund was allocated to investments in IoT accelerators and startups
such as The Alchemist Accelerator, Ayla Networks and EVRYTHNG. Later that year, the
company announced it was laying off another 6,000 workers or 8% of its global workforce,
as part of a second restructuring. On November 4, 2014, Cisco announced an investment
in Stratoscale.
On May 4, 2015, Cisco announced CEO and Chairman John Chambers would step down as
CEO on July 26, 2015, but remain chairman. Chuck Robbins, senior vice president of
worldwide sales & operations and 17-year Cisco veteran, was announced as the next CEO. On
July 23, 2015, Cisco announced the divesture of its television set-top-box and cable
modem business to Technicolor SA for $600 million, a division originally formed by Cisco's
$6.9 billion purchase of Scientific Atlanta. The deal came as part of Cisco's gradual exit from
the consumer market, and as part of an effort by Cisco's new leadership to focus on cloud-
based products in enterprise segments. Cisco indicated that it would still collaborate with
Technicolor on video products. On November 19, 2015, Cisco, alongside ARM
Holdings, Dell, Intel, Microsoft and Princeton University, founded the OpenFog Consortium,
to promote interests and development in fog computing.
In January 2016, Cisco invested in VeloCloud, a software-defined WAN (SD-WAN) start-up
with a cloud offering for configuring and optimizing branch office networks. Cisco
contributed to VeloCloud's $27 million Series C round, led by March Capital Partners.
In February 2017, Cisco launched a cloud-based secure internet gateway, called Cisco
Umbrella, to provide safe internet access to users who don't use their corporate networks
or VPNs to connect to remote data centers. Immediately after reporting their fourth quarter
earnings for 2017, Cisco's price-per-share value jumped by over 7%, while its Earnings per
share Ratio increased from 60 to 61 cents per share, due in part to Cisco's outperformance
of analyst expectations. In September 2017, Chambers announced that he would step down
from the executive chairman role at the end of his term on the board in December 2017. On
December 11, 2017, Robbins was elected to succeed Chambers as executive chairman while
retaining his role as CEO, and Chambers was given the title of "Chairman Emeritus."
On May 1, 2018, Cisco Systems agreed to buy AI-driven business intelligence startup
Accompany for $270 million. As of June 2018, Cisco Systems ranked 444th on Forbes Global
2000 list, with $221.3 billion market cap
 Cisco acquisitions:-
Cisco seeks acquisitions where there is not only a strong business case but also a shared
business and technological vision, and where compatibility of core values and culture foster
an environment for success.

Aquistions Per Year

23
19

12 12 12
9 9 10 10
8 7 7
6 6 5 5 6 6 6 6 6
3 4 4
1 2 1
3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 99 1 99 1 99 1 99 1 99 1 99 1 99 2 00 2 00 2 00 2 00 2 00 2 00 2 00 2 00 2 00 2 00 2 01 2 01 2 01 2 01 2 01 2 01 2 01 2 01 2 01 2 01

Cisco focus on acquisitions Strategy to bring new technologies and business model to cisco
( cisco acquired about 205) and Cisco segments acquisitions into three categories: market
acceleration, market expansion, and new market entry. The benefits ( including great talent
and technology, mature products and solutions

Vision: -
Changing the Way We Work, Live, Play, and Learn

Mission: -
Shape the future of the Internet by creating unprecedented value and opportunity for our
customers, employees, investors, and ecosystem partners.

Financial Highlights for Fiscal 2018

“We executed well, with strong top-line growth. We’re seeing the returns on the
investments we’re making in innovation and driving the shift to more software and
subscriptions, delivering long-term and shareholder value.”
Stock price and historical movement

Products and services

Corporate market
"Corporate market" refers to enterprise networking and service providers.

 Enterprise networks:
Products in this category are Cisco's range of routers, switches, wireless systems,
security systems, WAN acceleration hardware, energy and building management systems
and media aware network equipment.

 Collaboration
IP video and phones, TelePresence, HealthPresence, unified communications, call
center systems, enterprise social networks and Mobile applications,
 Datacenter and Virtualization
unified computing, unified fabric, data centre switching, storage networking and cloud
computing services.

 IP NGN (Next Generation Networks)

High-end routing and switching for fixed and mobile service provider networks, broadcast
video contribution/distribution, entitlement and content delivery systems.

Small businesses
 Routers and switches

The machines that route and redirect packets across a network, including those for networks of smart
meters.

 Security and surveillance

IP cameras, data and network security etc.[8]

 Voice and conferencing

VOIP phones and gateway-systems, WebEx, video conferencing

 Wireless
Indoor Wi-Fi Access points, Wireless Controller

 Network storage systems

Persistent people storage on networks, either in the traditional sense or in a cloud-like manner.

Home user
"Home user" refers to individuals or families who require networking services in the home.[9]

 Broadband
Broadband refers to cable modems.

 Flip Video
With the acquisition of Pure Digital Technologies, Cisco began to sell a line of video-recording devices called
"Flip Video" that had been Pure Digital's only line of products. This line of products was not as popular as
Cisco had thought it would have been, and on April 12, 2011, Cisco announced they were discontinuing
all Flip camera production. Cisco's product line, video conferencing for the home, also proved to be a short-
lived bid for the consumer multimedia market and sales were discontinued.

Servers / Application Appliances

 Cisco Wide Area Application Services (WAAS), optimizes the performance of any TCP-based
applications
 Unified Computing: Cisco Unified Computing System (UCS), virtual server platform
 Cisco Application Control Engine (ACE): Application Delivery Controller (now discontinued)
 Cisco UCS B-Series Blade Servers (Mini, B460 M4, B420 M4, B260 M4, B200 M4, B480 M5, B200 M5)
[14]

 Cisco UCS C-Series Rack Servers (C460 M4, C240 M4, C220 M4, C480 M5, C240 M5, C220 M5), [15]
 Cisco UCS Fabric Interconnects (6200 series, 6300 series), 

VPN/Remote Connectivity
 Cisco AnyConnect Secure Mobility Client
 Cisco Systems VPN Client, for connecting to virtual private networks
 Clean Access Agent, Cisco NAC Appliance

Other
 Cisco Active Network Abstraction
 Cisco Fabric Manager
 Data Center Management and Automation—Cisco Intelligent Automation
 Cisco Tidal Enterprise Scheduler, a job scheduler
 CiscoView
 CiscoWorks Network management software
 Cisco Eos, a software platform
 Packet Tracer, didactic network simulator
 Cisco Network Magic Pro
 Cisco Security Manager
 Cisco Security Device Manager (SDM)
 Cisco Security Prime Device Manager
 Cisco Prime Infrastructure

Competitors: -
In 2015 Cisco’s penetration rate in routers, switches, HW firewalls, and WiFi equipment was
still as high as 80.5%. Since then, it has dropped by at least 2 percentage points every year.
The penetration rate in networking equipment by HPE, inclusive of Aruba Networks, has also
declined annually since 2012 (38.8% in 2012, compared with 38.1% in 2018).  The penetration
rate of the number four player, Fortinet, rose to 6.5% during the same period. As a result,
Dell EMC dropped out of the top four for the first time.
Switches
When we zoom in on the various types of networking equipment, it turns out that half
(54.5%) of all switches are Cisco switches, and 30.2% are HPE/Aruba switches. Avaya rounds
off the top 3 with 7.5%. All other brands do not exceed 2%.

Routers
The same two players dominate the router market as well,
with Cisco as the undisputed market leader (76.4% of all
routers) and HPE/Aruba in second place (14.3%). Juniper (3%)
is the only other player that scores above 1%.

Hardware firewalls
Hardware firewalls are the least encountered elements among
the inventoried network components. The picture here is more
diverse. Cisco tops the list once again (32.2%), with Fortinet in
second place for the first time (15.7%), at the expense of Juniper
whose share of hardware firewalls has dropped from 21.2% in
2013 to 9.8% in 2018. Dell EMC (8.8%), Palo Alto Networks (7.6%),
Sophos (5.5%), Check Point (4.8%), Watchguard (4.0%),
Barracuda (2.7%) and Zyxel (1.9%) round off the top 10.

WiFi
Cisco is also number one when it comes to WiFi equipment, with
52.5% of the installed wireless equipment in the Netherlands.
Aerohive has registered a sharp increase in market share since
last year (from 4.6% to 10.7%) to occupy third place, with
HPE/Aruba (17.5%) at number two, thanks to the good
performance of the Aruba Networks component. Juniper’s
market has nosedived from 10.6% to 2.2%.

Industry overview
• According to the International Data Corporation (IDC) Worldwide Quarterly Cloud IT
Infrastructure Tracker, vendor revenue from sales of infrastructure products (server,
enterprise storage, and Ethernet switch) for cloud IT, including public and private
cloud, grew 48.4% year over year in the second quarter of 2018 (2Q18)

Top Companies, Worldwide Cloud IT Infrastructure Vendor Revenue, Market Share, and
Year-Over-Year Growth, Q2 2018(Revenues are in Millions)

2Q18 2Q18 2Q17 2Q17 2Q18/2Q17

Company Revenue Market Revenue Market Revenue
(US$M) Share (US$M) Share Growth

1. Dell Inc $2,386 15.5% $1,433 13.8% 66.4%

2. HPE/New
H3C $1,665 10.8% $1,389 13.3% 19.8%
Group**

3. Cisco $1,016 6.6% $947 9.1% 7.2%

4. Lenovo* $822 5.3% $254 2.4% 223.5%

4. Inspur* $691 4.5% $299 2.9% 131.0%

ODM Direct $5,337 34.6% $3,508 33.7% 52.2%

Others $3,525 22.8% $2,577 24.8% 36.8%

Total $15,442 100.0% $10,407 100.0% 48.4%

IDC's Quarterly Cloud IT Infrastructure Tracker, Q2 2018

Worldwide mobile app revenues in 2015, 2016 and 2020 (in billion U.S. dollars)
This statistic presents information on the projected mobile app revenues from 2015 to 2020.
In 2015, global mobile app revenues amounted to 69.7 billion U.S. dollars. In 2020, mobile
apps are projected to generate 188.9 billion U.S. dollars in revenues via app stores and in-
app advertising.

Data Protection As-A-Service Market 2019 Leading Growth Drivers

Data protection as-a-service market is expected to grow from USD 7.6 billion in 2017 to USD
28.2 billion by 2023, at a compound annual growth rate (CAGR) of 24.53% during the forecast
period. Growing concerns related to critical business data loss and the changing governance,
risk, and compliance regulations for data storage in organisations drive the demand for data
protection as-a service market.

Global Cloud Network Security Market: Growth, Trends, and Forecast (2018-2023)
The Cloud Network Security Software Market was valued at USD 6,587.2 million in 2017, and
is expected to reach USD 14,450.5 million by 2023, at a CAGR of 14.2% over the forecast
period (2018-2023).

Key success factors: -

1. Effective client organization
2. Clear boundaries of responsibility
3. Contracts that support integration
4. Culture of collaboration
5. Integrated service management processes
6. Integrated tooling
7. Meaningful reporting
8. Integrated governance
9. Core competencies
10. Security & Reliability

PESTLE analysis:
Political Factors that Impact Cisco Systems, Inc.
Political factors play a significant role in determining the factors that can impact Cisco Systems, Inc.'s
long term profitability in a certain country or market. Cisco Systems, Inc. is operating in Networking
& Communication Devices in more than dozen countries and expose itself to different types of
political environment and political system risks. The achieve success in such a dynamic Networking &
Communication Devices industry across various countries is to diversify the systematic risks of
political environment. Cisco Systems, Inc. can closely analyze the following factors before entering or
investing in a certain market-

Political stability and importance of Networking & Communication Devices sector in the country's
economy.

 Risk of military invasion

 Level of corruption - especially levels of regulation in Technology sector.
 Bureaucracy and interference in Networking & Communication Devices industry by
government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Technology
 Favored trading partners
 Anti-trust laws related to Networking & Communication Devices
 Pricing regulations – Are there any pricing regulatory mechanism for Technology
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week regulations in Networking & Communication Devices
 Mandatory employee benefits
 Industrial safety regulations in the Technology sector.
 Product labeling and other requirements in Networking & Communication Devices

Economic Factors that Impact Cisco Systems, Inc.

The Macro environment factors such as – inflation rate, savings rate, interest rate, foreign exchange
rate and economic cycle determine the aggregate demand and aggregate investment in an
economy. While micro environment factors such as competition norms impact the competitive
advantage of the firm. Cisco Systems, Inc. can use country’s economic factor such as growth rate,
inflation & industry’s economic indicators such as Networking & Communication Devices industry
growth rate, consumer spending etc to forecast the growth trajectory of not only --sectoryname--
sector but also that of the organization. Economic factors that Cisco Systems, Inc. should consider
while conducting PESTEL analysis are -

Type of economic system in countries of operation – what type of economic system there is and how
stable it is.

 Government intervention in the free market and related Technology

 Exchange rates & stability of host country currency.
 Efficiency of financial markets – Does Cisco Systems, Inc. needs to raise capital in local
market?
 Infrastructure quality in Networking & Communication Devices industry
 Comparative advantages of host country and Technology sector in the particular country.  
 Skill level of workforce in Networking & Communication Devices industry.
 Education level in the economy
 Labor costs and productivity in the economy
 Business cycle stage (e.g. prosperity, recession, recovery)
 Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates
Social Factors that Impact Cisco Systems, Inc.
Society’s culture and way of doing things impact the culture of an organization in an environment.
Shared beliefs and attitudes of the population play a great role in how marketers at Cisco Systems,
Inc. will understand the customers of a given market and how they design the marketing message
for Networking & Communication Devices industry consumers. Social factors that leadership of Cisco
Systems, Inc. should analyze for PESTEL analysis are -  

 Demographics and skill level of the population

 Class structure, hierarchy and power structure in the society.
 Education level as well as education standard in the Cisco Systems, Inc. ’s industry
 Culture (gender roles, social conventions etc.)
 Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests

Technological Factors that Impact Cisco Systems, Inc.

Technology is fast disrupting various industries across the board. Transportation industry is a good
case to illustrate this point. Over the last 5 years the industry has been transforming really fast, not
even giving chance to the established players to cope with the changes. Taxi industry is now
dominated by players like Uber and Lyft. Car industry is fast moving toward automation led by
technology firm such as Google & manufacturing is disrupted by Tesla, which has stated an electronic
car revolution. 

A firm should not only do technological analysis of the industry but also the speed at which
technology disrupts that industry. Slow speed will give more time while fast speed of technological
disruption may give a firm little time to cope and be profitable. Technology analysis involves
understanding the following impacts -

 Recent technological developments by Cisco Systems, Inc. competitors

 Technology's impact on product offering
 Impact on cost structure in Networking & Communication Devices industry
 Impact on value chain structure in Technology sector
 Rate of technological diffusion

Environmental Factors that Impact Cisco Systems, Inc.

Different markets have different norms or environmental standards which can impact the
profitability of an organization in those markets. Even within a country often states can have
different environmental laws and liability laws. For example in United States – Texas and Florida have
different liability clauses in case of mishaps or environmental disaster. Similarly a lot of European
countries give healthy tax breaks to companies that operate in the renewable sector. 

Before entering new markets or starting a new business in existing market the firm should carefully
evaluate the environmental standards that are required to operate in those markets. Some of the
environmental factors that a firm should consider beforehand are -

 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Networking & Communication Devices industry
 Recycling
 Waste management in Technology sector
 Attitudes toward “green” or ecological products
 Endangered species
 Attitudes toward and support for renewable energy

Legal Factors that Impact Cisco Systems, Inc.

In number of countries, the legal framework and institutions are not robust enough to protect the
intellectual property rights of an organization. A firm should carefully evaluate before entering such
markets as it can lead to theft of organization’s secret sauce thus the overall competitive edge. Some
of the legal factors that Cisco Systems, Inc. leadership should consider while entering a new market
are -

 Anti-trust law in Networking & Communication Devices industry and overall in the country.
 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection
SWOT Analysis
Strengths of Cisco Systems

 Distribution and Reach: Cisco Systems has a large number of outlets in almost every state,
supported by a strong distribution network that makes sure that its products are available
easily to a large number of customers in a timely manner.
 Cost Structure: Cisco Systems’s low cost structure helps it produce at a low cost and sell its
products at a low price, making it affordable for its customers.
 Dealer Community: Cisco Systems has a strong relationship with its dealers that not only
provide them with supplies but also focus on promoting the company's products and
training.
 Financial Position: Cisco Systems has a strong financial position with consecutive profits in
the past 5 years, along with accumulated profit reserves that can be used to finance future
capital expenditures.
 Cisco Systems has a large asset base, which provides it with better solvency.
 Return on Capital Expenditure: Cisco Systems has been successfully able to generate positive
returns on the capital expenditure it has incurred on various projects in the past.
 Automation: of various stages of production has allowed the more efficient use of resources
and reducing costs. It also allows for consistency in quality of its products and provides the
ability to scale up and scale down production as per the demand in the market

Weaknesses of Cisco Systems

 Research and Development: Even though Cisco Systems is spending more than the average
research and development expenditure within the industry, it is spending way less than a few
players within the industry that have had a significant advantage as a result of their
innovative products.
 High Day Sales Inventory: The time it takes for products to be purchased and sold are higher
than the industry average, meaning that Cisco Systems builds up on inventory adding
unnecessary costs to the business.
 Rented Property: A significant proportion of the property that Cisco Systems owns is rented
rather than purchased. It has to pay large amounts of rent on these adding to its costs.
 Low current ratio: The current ratio that shows the company’s ability to meet its short term
financial obligations, is lower than the industry average. This could mean that the company
could have liquidity problems in the future.
 The company has low levels of current assets compared to current liabilities, and this can
create liquidity problems for it in operations.

Internal Factor Analysis Summary (IFAS)

Internal Strengths Weight Rating Weighted Score

 Innovation 0.15 4 0.6

 Leading market position 0.1 4 0.4

 Diverse customer base and product

0.1 4 0.4
offerings

 Robust financial performance 0.15 5 0.75

 Extensive geographic reach 0.15 4.5 0.675

 Culture diversity 0.1 4.5 0.45

Internal Weaknesses 0

 Delay in order fulfillment due to

0.1 3 0.3
various supply chain issues

 Relatively weak presence in china 0.05 4 0.2

• Complexity of solving problem due

0.05 3 0.15
to large nature of the company

• Structural and technical changes in

0.05 2 0.1
new company acquired.

Total Weighted Score 1 4.025

Opportunities of Cisco Systems

 Internet: there has been an increase in the number of internet users all over the
world. This means that there is an opportunity for Cisco Systems to expand their
presence online; by using the internet to interact with its customers.
 E-commerce: There has been a new trend and a growth in sales of the e-commerce
industry. This means that a lot of people are now making purchases online. Cisco
Systems can earn revenue by opening online stores and making sales through these.
 Social Media: there has been an increase in the number of social media users
worldwide. The three social media platforms; Facebook, Twitter and Instagram, have
shown the greatest number of increase in monthly active users. Cisco Systems can
use social media to promote its products, interact with customers and collect
feedback from them.
 Technological developments: technology comes with numerous benefits among
many departments. Operations can be automated to reduce costs. Technology
enables better data to be collected on customers and improves on marketing efforts.
 There has been an increase in average household income along with an increase in
consumer spending following the recession. This will result in growth in Cisco
Systems’s target market with new customers that can be attracted towards the
business
Threats of Cisco Systems
 Technological developments by competitors; New technological developments by a
few competitors within the industry pose a threat to Cisco Systems as customer
attracted to this new technology can be lost to competitors, decreasing Cisco
Systems’s overall market share.
 Suppliers: The bargaining power of suppliers has increased over the years with the
decrease in the number of suppliers. This means that the costs of inputs could
increase for Cisco Systems.
 New entrants: there have been numerous players that have entered the market and
are gaining market share by gaining existing companies’ market share. This is a threat
to Cisco Systems as it can lose its customers to these new entrants.
 Increasing competition: there has been an increase in competition within the industry
putting downward pressure on prices. This could lead to reduced revenue for Cisco
Systems if it adjusts to the price changes, or loss of market share if it doesn’t.
 Exchange Rate: the exchange rate keeps fluctuating and this affects a company like
Cisco Systems that has sales internationally, while its suppliers are local.

External Factor Evaluation (EFE) Matrix

Opportunities Weight Rating Weighted Score

 Acquisitions & strategic

0.15 5 0.75
alliances

 Increasing adaptability of
0.15 4 0.6
cloud security solutions

 Growing demand for

unified communication 0.1 4 0.4
solutions

• Comparative advantages
0.1 2 0.2
of host country

Threats
 Intense Competition 0.1 5 0.5

 Dependence on supplier 0.1 3 0.3

 Uncertain global
0.1 3 0.3
economy

 Growing demand for

skilled labor in many 0.05 2 0.1
companies

 Political and legal risk 0.1 4 0.4

 Infrastructure quality in
Networking in hosting 0.05 2 0.1
countries

Total Weighted Score 1 3.65

The Strategic Factor Analysis Summary (SFAS) Matrix

Weigh Rat
Strategic factor Score Short Immediate long
t e

S1 Innovation 0.15 4 0.6 X

S2 Leading market position 0.1 4 0.4 X

S3 Robust financial performance 0.2 5 1 X

Delay in order fulfillment due

W1 0.1 3 0.3 X
to various supply chain issues

Relatively weak presence in

W2 0.05 4 0.2 X
china

T1 Intense Competition 0.05 5 0.25 X

T2 Dependence on supplier 0.1 3 0.3 X

T3 Political and legal risk 0.1 4 0.4 X

Acquisitions & strategic

O1 0.1 5 0.5 X
alliances

Increasing adaptability of cloud

O2 0.05 4 0.2 X
security solutions

Total Weighted Score 1 4.15

TOWS matrix
Strengths Weaknesses

1. Cisco Systems has a Strong 1. A high proportion of property in

Distribution network with a large use by Cisco Systems is on rent,
number of outlets. and rental charges need to be paid.
2. It has a low-cost structure, which 2. Low amounts of spending on
provides it with an advantage research and development as
over the competition. compared to the competition.
3. It has a strong financial position 3. It has a high employee turnover
with positive profits reported in rate, with low employee
the past few years. It also has a motivation and working morale.
strong asset base. 4. It has liquidity problems with low
4. It has a skilled labour force that is quick ratio; the level of current
highly qualified, innovative and assets is less than current
diversified. liabilities. It also faces cash flow
5. It has a strong presence on social problems.
media.
Opportunities SO Strategies WO Strategies

1. Internet users are increasing  Increase marketing to attract  Finance ownership of the property
around the world. E- consumers to spend (S1, S3, O3). through low interest rate to
commerce is also growing  Use its presence on social media increase the proportion of owned
with the increase in internet for marketing and to attract property to rented property (W1,
usage. customer towards its website O5).
2. Social media users are (S5, O2, O3).  Increase payrolls, provide incentive
increasing worldwide.  Develop environmentally friendly packages and benefits to
3. Household income is products through innovation, at a employees to reduce turnover and
increasing and so is the low cost so that they could be improve work morale. This could
consumer spending. Inflation sold at a low price (S2, S4, O4). be possible as costs are low
in the economy is expected  Market products at low prices by currently. (W3, O3)
to remain low. offering discounts. This would
4. Growth in environmentally help increase sales in volumes
friendly products and and is feasible due to low
services. Government is inflation and cost (S2, O3).
offering subsidies on these.
5. Interest rates are low, which
provides an investment
opportunity for large
projects.

Threats ST Strategies WT Strategies

1. There is a threat of new  Use a strong distribution network  Increase spending on research and
entrants coming into the to reach out to customers and development to enable Cisco
market. fight off new entrants into the Systems to better compete with
2. The exchange rate has been market (S1, T1). competition (W2, T4).
devalued.  Use its strong financial position  Provide incentives, increase
3. Fuel price has risen in recent to invest in intellectual property engagement, or provide a better
years making inputs rights. This would help compete work environment to retain talent.
expensive. with increasing competition in This will ensure that employees
4. Competition within the the market (S3, T4). don’t leave and join competitors
industry is increasing.  Use its innovative teams to find (W3, T4).
5. More substitute products are cheaper alternatives to fuel so
now available. that these could be used, thereby
reducing costs (S4, O3).

Porter's Five Forces:

BCG Matrix :-
Internal & External Matrix:

Ground strategy matrix

Space matrix
External Analysis:      
Stability Position (SP) Ratings
Technological Changes -2
Rate of Inflation -2
Price Elasticity of Demand -5
Competitive Pressure -2
Barriers to Entry into Market -2
             
Stability Position (SP) Average -2.6

Industry Position (IP) Ratings

Growth Potential 6
Financial Stability 6
Ease of Entry into Market 5
Resource Utilization 5
Profit Potential 6
             
Industry Position (IP) Average 5.6
Internal Analysis:      
Financial Position (FP) Ratings
Return on Investment (ROI) 6
Leverage 6
Liquidity 6
Working Capital 5
Cash Flow 6
             
Financial Position (FP) Average 5.8

Competitive Position (CP) Ratings

Market Share -1
Product Quality -1
Customer Loyalty -2
Technological know-how -1
Control over Suppliers and Distributors -1
   
Competitive Position (CP) Average -1.2

Strategic Alternatives & Recommended Strategy

Corporate strategy:
1- Concentration Strategy: (Horizontal growth) by expanding its operations into other
geographic locations and/or by increasing the range of products and services offered to
current markets.
• Pros
 Increase Market size for products
 Increase economies of scale and scope
 Enhance reactiveness due to proximity to local markets.
 Better customer relations through adopting to local cultural environment.
 Cons
 Draining resources to compete in rapidly shifting and unique competitive
environments globally.
Adjusting to varied political/ legal environment
2- Diversification Strategy: (Conglomerate unrelated growth) By establishing CISCO
Academy to provide quality learning experience in related and unrelated fields. This will
increase the company profit and promote the brand name of CISCO.
This will be a part from our Corporate Social Responsibility, we aim to create a network
of industry professionals and students to enhance the technology learning.
• Pros
 Increase Market size for services.
 Increase economies of scale and scope to transfer the know how to our new
hires.
 Chance to adapt the innovated ideas and source to create new technologies.
 Will support the HR function in training and development area.
 Good Pension plan for the retired staff by gave them the chance to transfer
the knowledge and provide them with a part time job.
 This will increase the global brand name of CISCO.
 Maintain the same level of qualification for the staff.
• Cons
 Risk though keeping the know how of our products.
 Difficult in the establishment phase due to the new industry.
Business strategy
1- Competitive Strategy: (Cost Focus) by expanding our Operations in developing countries,
which will allow us to create subsidiaries with low cost in the material and labor.
Training for the staff will be internal process through our new Academy.
2- Cooperation Strategy: (Alliances)
Joint Venture though agreement with laptops and mobile device companies to use our
application & security system.
Contract with banks , insurance company to ensure the security of data for customers.
The product leadership strategy involved the innovation of Cisco’s engineering teams,
complemented by alliances, acquisitions, and minority investments

Functional strategy
• Operation Strategy:
• Operations in developing countries.
• Implementation phase to create CISCO Academy.
• Financial Strategy:
• Utilize part from out annual revenue to create the subsidiaries in the
developed countries and to establish CISCO Academy.
• HR Strategy:
• the structure of the new subsidiaries and the manpower needs.
• the best calibers in the market to CISCO Academy.
• In house implementation for the Training and development function.  
• Marketing strategy:
• Conduct market research to open new markets worldwide.
• Procurement strategy:
• Conduct long term deals with the suppliers to offer the company with its
needs with the best price.
• Prepare a new supplier list.
• Logistics Strategy:
• Prepare the transportation strategy to transport the material and products.

Action plan:
Goal Objective Action plan Time frame

Acquisitions 1- To strength Cisco Offers will prepared by Within this year

position in security strategic team and
market approved by CEO
2- to ensure superiority
in infrastructure
market

Alliance with Increase Awareness 1- Actively working on Within this year

service and Relevance of Cisco new product
provider services in application development for
sector Commercial customers,
including both new
hardware and software.
2-Joint venture with
laptop company like
(HP , Lenovo ) through
marketing team.

Establish Promote the global 1-Prepare for a big Within three year
CISCO branding and became market campaign for
Academy the source of the Academy by
innovation ideas in the marketing team.
industry.
2-Hire qualified
professors from CISCO
retired staff.

Evaluation & Control:-

• Quarterly review the achievement.
• Check the co. financial performance through ROI and operating cash flow.
• Ensure employee satisfaction through periodical surveys.
• Investigate the results of KPI's for accurate performance evaluation.
• Measures the difference between the market value of a corporation and the capital
contributed by shareholders.
• Developing a balanced score card to measure the co. innovation and improvement in
financial, customer, and internal activities.
• Evaluating the performance of top management and board of directors though the
financial statements analysis, strategic audit, management audit and the company
performance.
• Analyze the stock performance during the financial year.
• Measure customer satisfaction.
• Measure the efficiency in the supply chain & distributes.
Reference
1- https://www.cheshnotes.com/2017/01/cisco-mission-and-vision-analysis/
2- https://en.wikipedia.org/wiki/List_of_Cisco_products
3- https://www.idc.com/getdoc.jsp?containerId=prUS44358318
4- https://www.statista.com/statistics/269025/worldwide-mobile-app-revenue-
forecast/
5- https://www.marketwatch.com/press-release/data-protection-as-a-service-
market-2019-leading-growth-drivers-emerging-audience-segments-sales-
profits-review-by-quantitative-analysis-comprehensive-landscape-current-and-
future-growth-by-forecast-to-2023-2019-03-29?mod=mw_quote_news

6- https://www.businesswire.com/news/home/20181218005415/en/Global-Cloud-
Network-Security-Market-Growth-Trends

7- http://fernfortuniversity.com/term-papers/pestel/nyse4/3455-cisco-systems--
inc-.php
8- https://www.smartprofile.io/analytics-papers/ciscos-share-in-networking-
equipment-continues-to-decline/
9- https://www.essay48.com/term-paper/12661-Cisco-Systems-Swot-Analysis