cisco systems: systems, products, forecasting models, and costs of errors by: ann mesavage richard...
TRANSCRIPT
Cisco Systems: Systems, Cisco Systems: Systems, Products, Forecasting Models, Products, Forecasting Models,
and Costs of Errorsand Costs of Errors
By:
Ann Mesavage
Richard McManus
BackgroundBackground
Largest manufacturer of switches and routers
Briefly was the most valuable company in 2000- ($555 billion company worth, stock price $80/share)
Is thought to have 85 percent of the switch market for the internet
Cisco’s successCisco’s success
Large outsourcerMany acquisitions- between $20 billion to
$30 billion between 1993 and 2000Sell many items over internetWebsite- Cisco Connection Online (CCO)
“Cisco uses the Web more effectively than any other big company in the world. Period.” - Fortune Magazine
Cisco’s Success (cont’d)Cisco’s Success (cont’d)
Internet: supply chain extranet- Manufacturing Connection Online (MCO)
Cisco Employee Connection - four fifths of technical training online
Online quotasCustomer serviceJob applicationsAccounting- closing accounts, “virtual close”
ProblemsProblems
2000-2001 recessionFall in technology related stockDotcom companies- sales down, affect on
CiscoSales fell: $22.3 billion (2001) to $18.9
billion (2003)
Effects on CiscoEffects on Cisco
Oversupply in inventory (unsold)Competitors/suppliers cut back on moneyShare price down by 80%, stock closed at
$14Competition with smaller companies Slow down in Asia and Europe
Affects on Cisco (cont’d)Affects on Cisco (cont’d)
Large layoff (6,000-8,000 employees)
CIO Peter Solvik
CFO Larry Carter
CEO John Chambers
Errors in Forecasting Errors in Forecasting
Did not factor growth into modelsToo much inventoryOver reliance on technologyWrong economic factors
- focused more on orders, than big picture
“Do our systems do a great job of telling us where we are today? Yes, but they don’t tell the future.” – CEO John Chambers
Cisco RestructuredCisco Restructured
Centralized engineering and marketing organization
Track products and profitability Improving “virtual close” system Improve brand recognition “Cisco is not as familiar to people as some of the
other large IT players… there is definitely the opportunity to increase awareness.” - Sue Bostrom, Cisco’s chief marketing officer
PollPoll
WebsiteWebsite
Very User Friendly Gives Up to Date
News Broken Into Many
Categories like “Products & Services”, “Ordering”, and “Support”
http://cisco.com/
WebsiteWebsiteAllows the User To Create An Account
– Accounts: Purchases Made Online Tracks Products that the User Purchases
Also Provides Training And Events– Allows users to learn about the business value of
networking solutions and get best practices for deploying and managing the latest technologies
– Provide live Webcasts or on-demand sessions in video or audio-only formats for “students”
WebsiteWebsite
Provides Users with Product Literature– Brochures– Bulletins– Case Studies (How Products Have Helped Out
Businesses With IT)– Customer Success Stories– Data Sheets– Presentations– Press Coverage– Q & A Forum
ProductsProducts
Specialize In Many Products And ServicesList of Products from A-Z
– Examples: Switches Network Routers Optical Networking Interfaces And Modules Universal Gateways And Access Servers
Provides Information On All Products
SwitchesSwitches
Cisco switches help maximize network value by providing optimal support for business requirements while delivering superior investment protection.
SwitchesSwitches
Many Different Varieties For Different Applications– Examples:
ATM Switches Blade Switches LAN Switches WAN Switches
Network RoutersNetwork Routers
Provide Routers for Small, Midsized, and Large Businesses
Each Have Different Features To Meet the Requirements of Different Types of Businesses
Network RoutersNetwork Routers
Provides Routers for Network Providers
Optical NetworkingOptical Networking
Service providers can optimize networks by integrating intelligent optical transport, flexible bandwidth management and converged voice/video/data services
Fiber Optics
Interfaces And ModulesInterfaces And Modules
Deploy data and voice capabilities in an integrated routing platform to help increase productivity, decrease costs, and lower the cost of ownership
Interfaces And ModulesInterfaces And Modules
Variety of Interfaces And Modules– Transceiver Modules– Ethernet Switching Network Modules– Line Cards– Network Modules– Optical Services Modules– Voice Modules And Interface Cards
Universal Gateways And Universal Gateways And Access ServersAccess Servers
Current market conditions enable service providers to increase revenue by offering wholesale Voice over Internet Protocol (VOIP) services
Universal Gateways And Universal Gateways And Access ServersAccess Servers
Voice Over IP Solutions (VoIP)– ASP Termination Services– Dial Access Solution For Service Providers– National And International Transport Services– Prepaid And Postpaid Calling Card Services– Voicemail/Unified Messaging
QuestionsQuestions
What is the “virtual close” system?
QuestionsQuestions
Short Answer:
Why is Cisco.com so successful on the international market?
QuestionsQuestions
Cisco was briefly the mot valuable company on Wall Street
QuestionsQuestions
Who uses Cisco.com?A) International Businesses
B) Small Local Businesses
C) Network Providers
D) All Of The Above
QuestionsQuestions
What does VoIP stand for?
A) Voice Internet Packaging
B) Voice Over Internet Protocol
C) Voice Interpreting Packages
D) None Of The Above
QuestionsQuestions
Another name for Cisco’s website is:
References• Case Study- “Cisco Systems: Poster Child for the Digital Firm?” Managing the Digital
Firm.• (2001, Mar 21). Behind the Tech Slump. The Economist Newspaper Ltd., 1. Retrieved
October 11, 2006, from ProQuest database.• (2001, Mar 10). An Old-Fashioned Price War. The Economist Newspaper Ltd.,1.
Retrieved October 11, 2006, from ProQuest database.• Morrissey, P., Boardmen B., Franklin, C., MacVittie, D., Molta, D. (2004, Oct 28). The
State of Cisco. Network Computing, Vol. 15, pg. 68. Retrieved October 11, 2006, from ProQuest database.
• Boyle, D. (2006). Cisco Systems, Inc. Better Investing, Vol. 55, 43. Retrieved October 15, 2006, from ProQuest database.
• Tribble, S. (2006, Oct 5). Cisco Introducing Itself to Consumers: Campaign Aims to Improve Brand Recognition. Knight Ridder Tribune Business News, 1. Retrieved October 19, 2006, from ProQuest database.
• Berinato, Scott. What Went Wrong at Cisco. 1 Aug. 2001 http://www.cio.com/archive/080101/cisco.html.