Case Study Description of Estimating Cisco's Future Cash Flows
In March 2016, an investor wanted to evaluate the strategy and stability of Cisco Systems, Inc. by using historical income statements to predict future cash flows. He knew that he might be able to use time series analysis to evaluate the company's performance in the near future, but he was unsure how to proceed if the historical data would not be predictive of the future performance. In particular, the investor wondered, how would he determine the likelihood that the company's next quarter would yield similar net income to the previous quarter?
Swot Analysis of "Estimating Cisco's Future Cash Flows" written by Hubert Pun, Salar Ghamat includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Quarter Future facing as an external strategic factors. Some of the topics covered in Estimating Cisco's Future Cash Flows case study are - Strategic Management Strategies, Financial analysis, IT, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Estimating Cisco's Future Cash Flows casestudy better are - – talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing energy prices, increasing household debt because of falling income levels, increasing commodity prices, increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Estimating Cisco's Future Cash Flows
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Estimating Cisco's Future Cash Flows case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Quarter Future, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Quarter Future operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Estimating Cisco's Future Cash Flows can be done for the following purposes –
1. Strategic planning using facts provided in Estimating Cisco's Future Cash Flows case study
2. Improving business portfolio management of Quarter Future
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Quarter Future
Strengths Estimating Cisco's Future Cash Flows | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Quarter Future in Estimating Cisco's Future Cash Flows Harvard Business Review case study are -
Effective Research and Development (R&D)
– Quarter Future has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Estimating Cisco's Future Cash Flows - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Quarter Future is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Hubert Pun, Salar Ghamat can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Quarter Future in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Quarter Future in the sector have low bargaining power. Estimating Cisco's Future Cash Flows has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Quarter Future to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Quarter Future
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Quarter Future does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Quarter Future are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Quarter Future has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Estimating Cisco's Future Cash Flows HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Quarter Future has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Quarter Future to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Quarter Future is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Quarter Future is one of the leading recruiters in the industry. Managers in the Estimating Cisco's Future Cash Flows are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Quarter Future digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Quarter Future has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Quarter Future is present in almost all the verticals within the industry. This has provided firm in Estimating Cisco's Future Cash Flows case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Estimating Cisco's Future Cash Flows | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Estimating Cisco's Future Cash Flows are -
Low market penetration in new markets
– Outside its home market of Quarter Future, firm in the HBR case study Estimating Cisco's Future Cash Flows needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Quarter Future has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Estimating Cisco's Future Cash Flows should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Estimating Cisco's Future Cash Flows has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Quarter Future 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Quarter Future needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Quarter Future is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Estimating Cisco's Future Cash Flows can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Estimating Cisco's Future Cash Flows HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Quarter Future has relatively successful track record of launching new products.
Need for greater diversity
– Quarter Future has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Estimating Cisco's Future Cash Flows, in the dynamic environment Quarter Future has struggled to respond to the nimble upstart competition. Quarter Future has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Estimating Cisco's Future Cash Flows that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Estimating Cisco's Future Cash Flows can leverage the sales team experience to cultivate customer relationships as Quarter Future is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Estimating Cisco's Future Cash Flows, it seems that the employees of Quarter Future don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
No frontier risks strategy
– After analyzing the HBR case study Estimating Cisco's Future Cash Flows, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Estimating Cisco's Future Cash Flows | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Estimating Cisco's Future Cash Flows are -
Creating value in data economy
– The success of analytics program of Quarter Future has opened avenues for new revenue streams for the organization in the industry. This can help Quarter Future to build a more holistic ecosystem as suggested in the Estimating Cisco's Future Cash Flows case study. Quarter Future can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Quarter Future can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Quarter Future can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Quarter Future can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Leveraging digital technologies
– Quarter Future can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Quarter Future can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Quarter Future to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Quarter Future to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Quarter Future can use these opportunities to build new business models that can help the communities that Quarter Future operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Better consumer reach
– The expansion of the 5G network will help Quarter Future to increase its market reach. Quarter Future will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Quarter Future in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Quarter Future to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Quarter Future can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Quarter Future can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Quarter Future can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Estimating Cisco's Future Cash Flows, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Estimating Cisco's Future Cash Flows External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Estimating Cisco's Future Cash Flows are -
Environmental challenges
– Quarter Future needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Quarter Future can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Quarter Future
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Quarter Future.
Consumer confidence and its impact on Quarter Future demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Quarter Future business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Quarter Future needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Quarter Future will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Quarter Future can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Estimating Cisco's Future Cash Flows, Quarter Future may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Quarter Future needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Quarter Future with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Quarter Future can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Estimating Cisco's Future Cash Flows .
Weighted SWOT Analysis of Estimating Cisco's Future Cash Flows Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Estimating Cisco's Future Cash Flows needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Estimating Cisco's Future Cash Flows is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Estimating Cisco's Future Cash Flows is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Estimating Cisco's Future Cash Flows is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Quarter Future needs to make to build a sustainable competitive advantage.