University Assignment: Strategic Analysis of Cisco Systems Inc.

This report provides a comprehensive strategic analysis of Cisco Systems Inc. It begins with an introduction to Cisco, its history, and its position as a leading technology company. The core of the report is divided into two main parts. The first part presents a detailed SWOT analysis, evaluating Cisco's strengths, weaknesses, opportunities, and threats. Following this, a PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors affecting Cisco's operations. Porter's Five Forces analysis assesses the competitive forces within the networking and communication devices industry. A value chain analysis identifies both primary and support activities, evaluating how Cisco creates value. The second part of the report offers solutions to the issues identified in the SWOT, PESTLE, and Porter's Five Forces analyses. The report suggests strategies to capitalize on Cisco's strengths, mitigate weaknesses, address external threats, and capitalize on opportunities within the dynamic technology sector. The report concludes by providing insights into how Cisco can navigate its competitive landscape, manage supply chain issues, and adapt to evolving market trends.

Running head: STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
Name of the Student
Name of the University
Author Note

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STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
1. Introduction
Cisco Systems Inc. is an American technology based conglomerate which has its
operations in multiple nations. The headquarter of the company is located in San Jose,
California which is at the centre of Silicon Valley. The organization has been able to start its
specialised operations with the collaboration of the various acquired subsidiaries which
include, OpenDNS, WebEx, Jabber and Jasper. The main areas where the company is known
to have expertise are, energy management, domain security and Internet of Things. Cisco has
acquired the position of the largest networking based organization in the world. The stock of
the company was added to Dow Jones Industrial Average in the year 2009 and has also been
included in S&P 500 Index. Cisco Systems was established in the year 1984 by Sandy Lerner
and Leonard Bosack who are computer scientists. The concept of local area network or LAN
was mainly pioneered by the two founders of Cisco Systems. Cisco had also become the
highest valued organization in the world within the year 2000 (Cisco 2018).
The discussion in the essay is mainly based on the analysis of environment and
industry in which the organization operates. The alignment of strategies with the environment
of operations of Cisco will also be discussed in the essay.
2. First part of the analysis
SWOT Analysis of Cisco System Inc.
Strengths – Cisco has high brand value in the market and the company has been
provided the 52nd rank by Brand Finance. The organization has also established itself as the
leader in the technology industry. The major focus of Cisco has been on the high-growth
based market and designs new technologies. Cisco has also been able to acquire many other
small organizations which had provided the company with an opportunity to enter the smaller

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markets. The financial position of the organization is strong and the profits have risen by
4.3% in the year 2014.
Weaknesses – The delay that has been experienced by the clients of Cisco Systems
has proved to be a major weakness for the organization. The company also had some major
issues in the supply chain and has suffered shortage on the components (Durand, Grant and
Madsen 2017).
Opportunities – Cisco has huge opportunities in the field of cloud computing and
increase its presence on the global platforms. The growth that has been seen in the cloud
security based activities of organizations have increased the opportunity for Cisco to increase
its operations in the industry.
Threats – The increase in the competition has posed a threat to the operations of
Cisco Systems in the world. The organizations which have caused issues for the operations of
Cisco are, Alcatel-Lucent, Amazon Web Services, Arista Networks, Arris Group, Blue Jeans
Networks, Motorola Solutions, Symantec, Ubiquiti Networks. The field in which Cisco
operates is highly volatile in nature. The changes that take place in the economy of the
country in which the company operates can also affect its profitability (Ethiraj, Gambardella
and Helfat 2018).
PESTLE Analysis of Cisco System Inc.
Political factors
 The major factor that can affect the
operations and profitability of Cisco
is based on the policies that are
developed by the government and
the importance of the sector in the
country.
 The tariffs and trade regulations in
the country can affect the
profitability.
Economic factors
 The macro environmental factors
like, savings rate and inflation rate
arte able to affect the demand for the
services and products that are
offered by Cisco Systems.
 The quality of infrastructure that is
provided to the organization in a
country can affect the demands of
the customers.

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STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
 Pricing regulations that have been
imposed by the government affects
the prices that are charged by Cisco
Systems Inc.
Social factors
 The culture that is followed in the
society can affect the needs and
demands of the customers.
 The hierarchical levels and class
structures in different countries play
an important part in the ways by
which the marketers can understand
and further design the different
marketing messages.
Technological factors
 The industries are being disrupted in
an effective manner by the new
technologies.
 The recent developments in
technology that have been made by
the competitors of Cisco are
affecting the revenues of the
organization.
Legal factors
 The legal framework that has been
developed by different countries can
affect the competitive edge of Cisco
in the industry.
 The employment laws of the country
can also effect the operations of
Cisco (Hill, Jones and Schilling
2014).
Environmental factors
 The environmental norms are
different in various countries and
have an impact on the organizational
profitability.
 The waste management based
activities in the technology sector is
an important factor which affects the
operations of Cisco (Hitt and Duane
Ireland 2017).
Porter’s Five Forces Analysis of Cisco System Inc.
Threats of new entrants – The entry of new organizations in the Networking and
Communication Devices industry is able to bring high levels of innovation. The new
technologies that are used by organizations have created immense pressure on the
profitability and operations of Cisco Systems Inc. These challenges have to be managed
Cisco in an effective manner to manage the challenges.
Bargaining power of the suppliers – The raw materials are purchased from various
suppliers in the organizations in Networking and Communication Devices industry. This
provides a dominant position to the suppliers in the industry. The powerful suppliers are
thereby able to negotiate and affect the prices that are offered by the company to the

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STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
customers. This impact of the powerful suppliers is able to affect the prices that are charged
by the organizations (Wheelen et al. 2017).
Bargaining power of the buyers – The buyers in different industries sometimes tend
to become much more demanding in nature. Cisco Systems Inc. has been affected by the
power of buyers on a long term basis. The customer base of the organization small and
powerful, however the bargaining power of these buyers is high. This further leads the
company to provide discounts and lower prices.
Threats from the substitute products – The products and services that are provided
to the customers by Cisco have many substitutes in the current market situation. The
customers thereby have many choices of products in the industry. The high levels of service
orientation of the company can further help Cisco to operate in an effective manner (Dobbs
2014).
Rivalry among existing players – Cisco Systems Inc. has been provided huge
competition by the other organizations which operate in the industry. The Networking and
Communication Devices industry has become competitive in nature. The high levels of
competition have been able to take a toll on long term profits of Cisco Systems Inc.
Value Chain Analysis of Cisco System Inc.
Primary activities
Inbound logistics – The logistics of Cisco Systems Inc. are related to the ways by
which innovative products are designed by the company. Small amounts of suppliers are
present in the value chain who provide the raw materials to the organization.

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STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
Operations – The operations of the value chain management of Cisco Systems Inc.
are based on the ways by which the products are developed, manufactured and distributed to
the customers.
Outbound logistics – Maximum amounts of value chain operations of Cisco System
are outsourced to different areas or countries (Meyer, Neck and Meeks 2017).
Marketing and Sales – The sales and marketing based operations of Cisco System
Inc. are based on the ways by which customers can be attracted towards the products that are
offered.
Support activities
Firm Infrastructure – Cisco System Inc. has an effective infrastructure which has
been created with the help of abundant financial resources. The company has thereby created
a strong value chain in its operations all over the world.
Human resource management – The human resource management department of
Cisco has worked in a close manner with the other departments of the organization in order to
create a profitable position in the market. The HRM department is thereby able to manage the
value chain and the workforce of the organization in an efficient manner (Michael, Storey
and Thomas 2017).
Procurement – Procurement of raw materials has played an important part in the
ways by which the organization is able to create a successful relationship with the suppliers.
The prices of products that are developed by Cisco System Inc. are affected by the
procurement process and ability of suppliers to negotiate.
Technology – Cisco System Inc. has implemented new technologies for the purpose
of providing best levels of services to the customers. The company has aimed at competing

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STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
with the other technology based organizations with the help of high levels of technologies in
the value chain.
3. Second part of the analysis
Solutions to issues identified in the SWOT analysis of Cisco Systems Inc.
The major strengths of the company that have been identified in the analysis are based
on the value that the brand has in the industry. The leadership of the company in the
technology based sector is also an important part of the strengths of Cisco System Inc. The
financial strength of the organization is also an important factor that can affect its operations
in the future. The growth of potential of the company can be used for the purpose of
overcoming the major weaknesses which are based on the issues that it has in the supply
chain. The shortage based issues of the organization can be solved with the help of the strong
financial position that it holds in the market. Cisco is also facing some major threats from the
organizations like, Amazon Web services and Arista Networks (Morschett, Schramm-Klein
and Zentes 2015). This threat can be mitigated by Cisco with the introduction of new
products in the existing line of products of the organization. The volatility issues that are
faced by Cisco in the industry can be easily solved by the shield that is created by the strong
financial position of the company.
Solutions to issues identified in the PESTLE analysis of Cisco Systems Inc.
The political issues that are faced by Cisco System are mainly based on the stability
of the environment and the corruption levels in the system. Cisco System can mitigate the
risk with the help of proper formation of regulations and policies. The benefits that the
organization provides to the employees need to be planned in an effective manner. The
economic situation in the country of operations of Cisco System can be tackled with the help

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of the formation of proper financial strength of the company. The organization further needs
to analyse the needs and demands of customers in order to provide the best quality products.
The organization can thereby be able to operate in the industry in an effective manner with
the help of its loyal customer base. The new technologies that are being implemented by the
competitors of Cisco System Inc. can be further used by the organization itself in order to
provide the best levels of services (Stead and Stead 2014). The environmental issues need to
be taken care by Cisco is order to reduce the impact of its operations on the external
environment. The organization needs to include sustainability in its operations in order to stay
in the market for a longer term.
Solutions to issues identified in the Porter’s Five Forces analysis of Cisco Systems Inc.
The industry in which Cisco System Inc. has its operations is highly competitive in
nature. The company thereby needs to bring innovation and the different types of products in
existing product line in order to compete with the new organizations in an effective manner.
The economies of scale can be used in such a manner which will be helpful for the company
to reduce the cost per unit of production. The number of suppliers of the organization can be
increased in order to create an efficient network and reduce their power as well. Cisco can
also develop the dedicated suppliers so that the organization can depend on them. The
customer base of Cisco is quite small and the company needs to increase the number of
customers so that is able to control the prices of the products and services (Trigeorgis and
Reuer 2017). The threats that are provided by the other products in the industry can be
reduced by Cisco with the improvement of the products. Cisco System needs to create a
sustainable differentiation so that it is able to decrease the rates of rivalry in the technology
industry. The organization can also think of collaborating with the competitors in order to
reduce the levels of rivalry to some extent.

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Solutions to Issues identified in the Value chain analysis of Cisco Systems Inc.
The value chain analysis of Cisco Systems Inc. has shown that the company has been
able to create a successful chain of activities with the help of its financial strength and
efficient workforce. The value chain based strategy of Cisco System Inc. has been
implemented in an effective manner which has helped the organization to operate in a
profitable way.
4. Recommendation on the strategic agility
The strategy that has been implemented by Cisco to create a sustainable position in
the global technology industry is mainly based on the search for new technologies for
improving the current range. Cisco has acquired more than 100 companies within the year
2012 and the organization is looking for more opportunities on a constant basis. The
company thereby aims at innovating the products and services with the help of acquisition.
Cisco has taken many risks in its operations in the industry which is based on the
implementation of technologies that have not been introduced in the market. The innovation
based momentum of Cisco Systems has reduced in the recent times and the revenues have
also decreased.
The strategic acquisitions that are done by the organization have also become quite
ineffective in nature. The company is thereby not able to bring more innovations in its
operations in order to compete with the other organizations in the technology industry. This
has been able to reduce the profitability of the company and revenues as well. The employee
base of Cisco has also been affected by the reduction in its profitability levels. The major
recommendation that can be provided to Cisco System Inc. is based on the implementation of
research and development activities within the organization itself. This can be helpful for the
company to create a profitable position in the market in an easier manner.

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STRATEGIC ANALYSIS OF CISCO SYSTEMS INC.
The company will be able to innovate its own products and try to provide tough
competition to the others in the technology industry. Cisco can thereby try to maintain its
sustainable position in the industry with the help of proper implementation of the research
and development based activities within the organizational processes. Cisco System
Inc. will be able to improve the levels of profitability and revenues with the help of the
implementation of high-end technologies within the organizational processes. The levels of
strategic agility can be achieved by Cisco System Inc. with the help of innovation of in the
existing products and services that are available. The organization can also increase its
customer-centric orientation for the purpose of improving the profitability levels and
revenues and further create its previous position in the industry.

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References
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