Cisco's Acquisition Strategy in the 1990s

This article discusses Cisco's acquisition strategy during the 1990s, including the ways the company managed its acquisitions and the limitations of the strategy. It covers the acquisitions of Crescendo Communications, StrataCom, and Pirelli Optical Systems, as well as Cisco's focus on early stage development and product design.

Strategic management

Table of Contents
MAIN BODY...................................................................................................................................3
Describe Cisco's acquisition strategy during the 1990s. Description of the crucial ways which
were used by the company to manage its acquisitions in a precise manner and what were
limitations of this acquisition strategy....................................................................................3
REFERENCES................................................................................................................................5

MAIN BODY
Describe Cisco's acquisition strategy during the 1990s. Description of the crucial ways which
were used by the company to manage its acquisitions in a precise manner and what were
limitations of this acquisition strategy
The acquisition strategy of Cisco could be measured as the way it tackled the issues
created by evolution of Switching technology The Cisco company focused on development of
company by taken into consideration by taking assistance of integrating Cisco's IT department or
third party systems integrator (Hagendorf Follett, (2007). In September 1993, Cisco company
acquired Crescendo communications which is based in Sunnyvale. Cisco company acquired this
company for 89 Million Dollars which included different parameters of business. The Crescendo
communications were having 60 number of employees along with zero facilities of
manufacturing and no overheads. In the acquisition of a company by other company, it is
important to focus on new operations and management of culture with the help of professional
approach (Poole, (2005). The main reason for success of Cisco was, it made the Crecendo
company as a different or separate unit of business and kept away engineering capabilities of
Cisco. The Crescendo's industry operations were bifurcated into different units because of time
to overriding factors related to marketplace (Mayer, Kenney,2004).
Cisco company also get to know that boosting its operations will require for distribution
in a unique manner, manufacturing and financial strengths. After 18 months of acquisition, 500
million dollars were cost of Cisco's products which contributed to development of annual run
rate. The Morgridge got immense and unbelievable success at the marketplace and he stated that
Crescendo's acquisition has developed a valuable asset for Cisco (Rifkin, (1997). The marketing
and channel development were two major factors which contributed to company's success in a
short period of time. The new merger company should also follow roles and responsibilities in an
ethical manner to facilitate development of a business (O'Reilly CA III, Pfeffer, (2000). Also the
Cisco company believed that broader or more professional companies were hard to be managed
according to their functioning and strength. The cheap acquisitions are also major factor in terms
of success for the company as it requires low capital and costing. The New product
introduction(NPI) process to develop products and services related to product in a precise and
systematic manner (Morgridge, Heskett,2000). Cisco company also focused on early stage

development of a product along with product design. The Cisco's deep ecosystem involvement
was also involving members and investors of board of directors of venture capital firms and start
ups firms in the ecosystem of Cisco. Company also focused on major competitors like Lucent in
order to develop a major planning framework and strategy (Mayer, Kenney, 2004). Cisco also
acquired StrataCom which was a public firm with more than 1000 employees in 1996. The Cisco
focused on acquiring StrataCom as a major business firm which was good in technological and
marketing capabilities. Cisco company also played a key role by promising StrataCom that there
will be no lay offs and planned to integrate Strata Com's quality and traffic of service software
into its own switches and routers (DePamphilis, (2005). The acquisition faced a major limitation
related to reassuring its current customers, Cisco also maintain business operations in a
professional manner. The company Pirelli Optical Systems, was also taken over by Cisco in
December 1999 for $2.15 billion, which depicted important representation of chamber's principle
in a significant deviation. In order to develop an effective approach at the marketplace, it is
essential for the company to analyse macro or external environment in a precise manner
(Eisenhardt, & Sull, (2001). The geographical and cultural factors were also major factors that
created a chaos for Cisco company.

REFERENCES
Books and Journals
Hagendorf Follett, J. (2007). Cisco Gets The Message With $830M E-Mail Security Acquisition.
ChannelWeb, 4 Jan,
Poole, H.W., ed. (2005) The Internet: A Historical Encyclopedia. Santa Barbara, CA: ABC-Clio.
Mayer D, Kenney M. 2004. Economic action does not take place in a vacuum: understanding
Cisco’s acquisition and development strategy. Industry and Innovation 11(4): 299–325
Rifkin G. (1997). Growth by acquisition: the case of Cisco Systems. Strategy and Business. Booz
Allen and Hamilton, New York
O'Reilly CA III, Pfeffer, J. (2000). Cisco Systems: Acquiring and retaining talent in
hypercompetitive markets. Human Resource Planning, 23(3), 38-92.
Morgridge JP, Heskett JL. 2000. Cisco Systems: Are you ready? (A): Case 9-901-002: Harvard
Business School.
Mayer D, Kenney M. 2004. Economic action does not take place in a vacuum: understanding
Cisco’s acquisition and development strategy. Industry and Innovation 11(4): 299–325.
DePamphilis, D.M. (2005) Mergers, Acquisitions, and Other Restructuring Activities, Elsevier
Academic: Burlington, MA
Eisenhardt, K. M. & Sull, D. N. (2001). Strategy as simple rules. Harvard Business Review,
January: 107- 116