Cisco’s SWOT Analysis 2021
This article will highlight the Cisco’s SWOT Analysis 2921. With its rich and diverse product portfolio, Cisco is one of the leading forces in the IT industry. This company has received numerous awards for its high performance products. In addition to this, it also holds a commanding position in the telecommunication industry. The last few years have been great for Cisco as they were able to make healthy profits from their operations.
It is a global networking company offering products and services in the areas of internet protocol based solutions, telecommunication equipment, switching systems and optical network. Cisco has diversified its business which includes products for consumer application and multimedia communication applications. The company has been able to make steady growth as it maintains a strong hold on all important market segments. Cisco has been able to maintain a strong competitive position because of its deep understanding of the application and network markets. It also focuses on maintaining high quality standards for all new products which are introduced by the company.
The internet protocol based solutions segment is very important for Cisco as it offers a wide range of networking solutions. The last few years has seen an increase in the Internet based applications and this has fueled the demand for internet protocol based solutions. The company’s switching systems segment is also important as it offers products like routing platforms, sub switches, core access routers and advanced services Routers. The optical network business plays a crucial role in helping Cisco offer high quality networking solutions in the long-distance market segment.
The company has been able to gain a strong foothold in the telecommunication industry because of its high performance switching systems. The same segment also helps Cisco add value to its customer relations by providing networking solutions for telecommunications carriers. It is very important for Cisco to maintain a close relationship with network operators as they help them gather market information which can further be used for development of new products.
Cisco has a very strong hold in the networking segment because of its advanced networking solutions and services like internet protocol based solutions, telecommunication equipment, switching systems and optical network.
CISCO Marketing Strategies
Cisco has integrated two of its divisions into one product line. These are routing and content delivery networks. This move is expected to help the company offer a wide range of service capabilities for its global clients.
There are various marketing strategies that have been adopted by Cisco to expand their business in different countries around the world. The company has worked very closely with the local government authorities by providing them with highest quality networking solutions which are compliant to all international standards. Cisco has also worked closely with local educational institutions in order to provide training for its employees. This move is expected to help develop a strong talent pool which can be used by the company in future.
It has entered into partnerships and collaborative arrangements with many local companies with a view to improve its presence in the different market segments. Cisco has also developed strong marketing strategies which have helped it strengthen its position in the various country markets. They have used their sales force as well as business offices and field offices to develop new potential customers for the company’s products and services.
There are various strengths that have enabled Cisco to come up with one of the best networking products in the industry.
The company has been able to succeed because it invests heavily in R&D and this has helped the firm introduce innovative network solutions for its customers across various market segments. The company’s latest innovation is called unified access architecture which blends together Internet Protocol (IP) routing and switching. This has helped the company maintain a competitive edge in the networking market.
It is very important for Cisco to invest heavily in R&D as new developments in this field play an crucial role in helping the firm build strong relations with its customers. The company’s various strengths also help it generate high revenues from the various business segments.
Cisco is a very well-known brand in the industry.
It is one of the market leaders when it comes to networking and telecom devices.
Very strong channel presence globally with over 22,000 resellers worldwide.
Its strong customer service network ensures 24/7 support to its customers across geographies servicing them through their own service teams.
The company has a strong presence in the small and medium business space where it enjoys over 60% market share.
With Cisco divesting itself of its consumer product portfolio, this is set to become an even bigger competitive advantage for it as more service providers would be looking towards it for their networking infrastructure needs versus peers that are not able to offer a similar level of customer support and services globally.
The company’s decision to merge its two divisions together has yielded very poor results. This has led to decrease in the company’s overall operational efficiency.
Cisco has also been unable to offer flawless products due to increase in competition in their core segment of networking solutions.
The company’s huge debt burden has also come in the way of its future growth.
The company has a weak presence when it comes to the enterprise as compared to its peers like Juniper, HP or RIM.
It is fighting with Apple for dominance in mobile devices business where iPhones are fast eroding Cisco’s market share in this space.
The company’s stock price has been hit hard in recent times due to multiple earnings misses by the company.
It faces stiff competition from peers like HP, Microsoft, Juniper besides a host of new entrants in this space that are leveraging cloud computing and software defined networking to offer their customers solutions at lower prices than Cisco can manage at the moment.
Thus, no matter how good its products are today or in the future, if Cisco cannot price itself competitively vis-à-vis peers and new vendors coming in this space, it will find it extremely difficult to sustain its market share of around 25% that it enjoys today. However, given Cisco’s strong presence in some parts of the market (such as telecom) it might take some time for this weakness to manifest itself in its overall business.
The company’s stock price is trading at a relatively higher valuation when compared with peers like HP or Juniper.
In a dynamic market like networking, new opportunities can emerge at any time. Cisco has been able to capitalize on these developments and grow steadily over the years.
The company’s continuous investments in R&D have helped it improve upon its existing services and develop newer ones. The company’s huge market share helps it leverage off its strong presence in the different business segments.
Cisco has an opportunity to grow in the enterprise segment through strategic acquisitions of companies offering cloud computing or software defined networking solutions.
The company will look to leverage its strong channel presence and customer service network to gain share in the enterprise segment.
Cisco can leverage partnerships with other vendors such as Apple, Microsoft, Google for growing its presence in mobile devices and consumer electronics markets.
The company has an opportunity to expand globally and look for growth opportunities in emerging geographies such as Asia Pacific and Africa.
The networking solutions industry is very dynamic and Cisco has been able to succeed by staying abreast with new developments taking place across the world. It has continued to invest heavily in R&D with a view to develop products and services that comply with the latest international standards. The company’s top-notch research facilities in U.S. have helped it come up with some of the best networking solutions for its clients around the world.
Cisco might face pricing pressure from competitors like Juniper, HP, Dell or NEC which can offer their customers similar products at lower prices than Cisco can.
Deployment of cloud computing solutions by big companies will also hit the margins of Cisco’s traditional business.
Cisco faces stiff competition from peers like Juniper, HP and a host of new entrants which can provide their customers with products at lower price points than what Cisco will be able to offer.
Deployment of software defined networking by other competitors might impact the company’s share in enterprise segment where its strength has been mainly due to its ability to deliver hardware and software solutions through its own service teams.
This will also open up new opportunities for Cisco’s competitors like HP, Dell or Juniper as they will now be able to offer their customers a much broader range of networking solutions that can include cloud computing, software defined networking alongside products from other areas such as servers or storage.
Cisco might lose its lead in the service provider segment where it has a more than 50% market share.
Large consumer electronics and mobile devices vendors such as Apple and Google will offer IP based mobile devices that would be aimed at providing services that can cannibalize what Cisco currently offers to its customers. For instance, using iPhones for video conferencing can hurt Cisco’s current video conferencing business.
Deployment of Software Defined Networking and Cloud Computing solutions by large vendors such as Apple, Google or Amazon might hit the margins of Cisco’s traditional business.
Key Strategy Question:
What strategy should Cisco adopt to grow its enterprise segment given that companies like Juniper, HP or Dell can offer their customers similar products at lower price points?
CISCO Growth Strategy
Cisco has adopted various growth strategies in order to sustain its future growth. These include:
The company has expanded rapidly across the globe and this has helped it emerge as a major player in the networking market. Cisco is expected to continue on these lines of action and look for emerging markets where it can offer its services to customers. The company can also leverage off its strong hold in the different business segments and sustain its future growth.
It is important for Cisco to remain consistent with its current growth strategies in order to maintain its competitive edge in the networking industry. The company must also continue investing heavily in R&D as this can enable it come up with better quality products and services than its competition. cisco should also put into place a strong collaboration strategy with its current partners to develop innovative networking services for customers.
The company should also avoid over-expansion and leverage off its presence in the different business segments successfully. CISCO investment
What is Cisco Mission?
We connect everything…. that transforms how people live, work and play.
Cisco’s vision statement is “to lead in the innovation of global networking” and this has helped them come up with various new products for their customers across the globe.
Cisco mission is to help transform our world to a more connected planet in every way possible. Cisco helps people connect to each other, network equipment, information, entertainment and much more by delivering the best networking products its customers have come to trust over many years of use. The company’s well-known tagline “Leading the Way” clearly indicates that it is always on top of all new developments taking place in the networking market. The company helps people and institutions connect to each other and share information.
What is Cisco’s Current Market Scenario?
Cisco has recorded a steady increase in its overall sales over the years, with FY 2012 being one of its best years. Here are some important facts related to Cisco’s industry position:
The company is currently sitting on an annual revenue of $40 Billion, which is mainly generated from more than 60 countries across the globe. Its market share in the networking market is also on the rise, with Cisco recording a revenue of $21.4 Billion in Q1 2013.
Cisco’s product sales have also been on the rise over the year, reaching nearly $36 Billion in 2012. The company recorded a growth rate of more than 20% in its products’ sales for 2012 as compared to the previous year.
Cisco is the largest networking company in the world, with a market share of 36% in 2012 and expected to reach 42 % during 2013 – 2014.
The company has also been able to diversify its reach across different industries and has even started catering to the government sector with its latest products. Cisco’s sales for this particular sector have doubled over 2012.
CISCO Business Model
Cisco offers a wide range of networking products ranging from various network equipment to security measures. The company currently offers its products for nearly 40 different business segments and this has helped it tap new markets with their high demand for networking solutions.
The company’s three business models are:
Direct Sales Model
In the direct sales model, Cisco directly promotes and sells its products to many markets across the globe. The company has also established a strong presence in different countries, which enables it reach new customers directly with ease. Cisco’s business model is very suitable for these markets as it can respond quickly to any of its customer’s demands, without any extra delays or costs incurred. Indirect Sales Model
Indirect Sales Model
In the indirect sales model, the company outsources its work to different independent partners across geographical locations. The business model allows the company to maintain its competitive advantage while reducing its operations and maintenance costs. Partner Sales Model In this particular business model, Cisco acts as a reseller for other networking companies’ products. This has helped it generate higher sales than it would have on its own as Cisco is able to sell other networking companies’ products with ease.
Hybrid Sales Model
The third Cisco sales model is hybrid, where the company combines its direct and indirect sales models together to generate maximum profits while keeping its operations costs low.