Cisco Systems: Building Leading Internet Capabilities SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Cisco Systems: Building Leading Internet Capabilities
Cisco has invested in building a leading IT, Internet-based infrastructure. This case describes Cisco's latest efforts to broaden Internet capabilities in the company from 30% to 60% penetration. The strategy is intended to sustain Cisco's double-digit revenue growth through the decade.
Swot Analysis of "Cisco Systems: Building Leading Internet Capabilities" written by Richard L. Nolan, Christina Darwall includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cisco's Cisco facing as an external strategic factors. Some of the topics covered in Cisco Systems: Building Leading Internet Capabilities case study are - Strategic Management Strategies, IT, Leadership and Technology & Operations.
Some of the macro environment factors that can be used to understand the Cisco Systems: Building Leading Internet Capabilities casestudy better are - – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, technology disruption, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Cisco Systems: Building Leading Internet Capabilities
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cisco Systems: Building Leading Internet Capabilities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cisco's Cisco, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cisco's Cisco 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 Cisco Systems: Building Leading Internet Capabilities can be done for the following purposes –
1. Strategic planning using facts provided in Cisco Systems: Building Leading Internet Capabilities case study
2. Improving business portfolio management of Cisco's Cisco
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 Cisco's Cisco
Strengths Cisco Systems: Building Leading Internet Capabilities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cisco's Cisco in Cisco Systems: Building Leading Internet Capabilities Harvard Business Review case study are -
High switching costs
– The high switching costs that Cisco's Cisco has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Cisco's Cisco is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cisco's Cisco is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cisco Systems: Building Leading Internet Capabilities Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Cisco's Cisco in the sector have low bargaining power. Cisco Systems: Building Leading Internet Capabilities has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cisco's Cisco to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Cisco Systems: Building Leading Internet Capabilities Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Organizational Resilience of Cisco's Cisco
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cisco's Cisco does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Cisco's Cisco 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 Cisco Systems: Building Leading Internet Capabilities - 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
– Cisco's Cisco 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 Richard L. Nolan, Christina Darwall 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.
Training and development
– Cisco's Cisco has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cisco Systems: Building Leading Internet Capabilities Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Cisco's Cisco digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cisco's Cisco 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.
Highly skilled collaborators
– Cisco's Cisco 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 Cisco Systems: Building Leading Internet Capabilities HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Cisco's Cisco is one of the leading recruiters in the industry. Managers in the Cisco Systems: Building Leading Internet Capabilities are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Technology & Operations field
– Cisco's Cisco is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cisco's Cisco in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Cisco Systems: Building Leading Internet Capabilities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cisco Systems: Building Leading Internet Capabilities are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cisco Systems: Building Leading Internet Capabilities, it seems that the employees of Cisco's Cisco 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.
Low market penetration in new markets
– Outside its home market of Cisco's Cisco, firm in the HBR case study Cisco Systems: Building Leading Internet Capabilities needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Cisco's Cisco has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cisco's Cisco even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cisco Systems: Building Leading Internet Capabilities, in the dynamic environment Cisco's Cisco has struggled to respond to the nimble upstart competition. Cisco's Cisco has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cisco's Cisco supply chain. Even after few cautionary changes mentioned in the HBR case study - Cisco Systems: Building Leading Internet Capabilities, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cisco's Cisco vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Cisco's Cisco has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Cisco Systems: Building Leading Internet Capabilities 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 Cisco's Cisco 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Cisco's Cisco has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Cisco Systems: Building Leading Internet Capabilities 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 Cisco Systems: Building Leading Internet Capabilities can leverage the sales team experience to cultivate customer relationships as Cisco's Cisco is planning to shift buying processes online.
Lack of clear differentiation of Cisco's Cisco products
– To increase the profitability and margins on the products, Cisco's Cisco needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Cisco's Cisco 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 - Cisco Systems: Building Leading Internet Capabilities should strive to include more intangible value offerings along with its core products and services.
Opportunities Cisco Systems: Building Leading Internet Capabilities | 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 Cisco Systems: Building Leading Internet Capabilities are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cisco's Cisco is facing challenges because of the dominance of functional experts in the organization. Cisco Systems: Building Leading Internet Capabilities case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cisco's Cisco in the consumer business. Now Cisco's Cisco can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cisco's Cisco 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 Cisco's Cisco to hire the very best people irrespective of their geographical location.
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 Cisco's Cisco 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.
Using analytics as competitive advantage
– Cisco's Cisco has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Cisco Systems: Building Leading Internet Capabilities - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cisco's Cisco to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Cisco's Cisco to increase its market reach. Cisco's Cisco 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cisco's Cisco can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Cisco's Cisco 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cisco's Cisco 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, Cisco Systems: Building Leading Internet Capabilities, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Cisco's Cisco can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cisco Systems: Building Leading Internet Capabilities suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Learning at scale
– Online learning technologies has now opened space for Cisco's Cisco to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Cisco's Cisco has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Cisco's Cisco has opened avenues for new revenue streams for the organization in the industry. This can help Cisco's Cisco to build a more holistic ecosystem as suggested in the Cisco Systems: Building Leading Internet Capabilities case study. Cisco's Cisco can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Cisco Systems: Building Leading Internet Capabilities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cisco Systems: Building Leading Internet Capabilities are -
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. Cisco's Cisco 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cisco's Cisco.
Shortening product life cycle
– it is one of the major threat that Cisco's Cisco is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Cisco's Cisco 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.
High dependence on third party suppliers
– Cisco's Cisco high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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 Cisco's Cisco business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cisco's Cisco 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 Cisco Systems: Building Leading Internet Capabilities .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cisco's Cisco in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Cisco's Cisco has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Cisco's Cisco needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Cisco's Cisco 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. Cisco's Cisco can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Stagnating economy with rate increase
– Cisco's Cisco 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.
Increasing wage structure of Cisco's Cisco
– 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 Cisco's Cisco.
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.
Weighted SWOT Analysis of Cisco Systems: Building Leading Internet Capabilities 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 Cisco Systems: Building Leading Internet Capabilities 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 Cisco Systems: Building Leading Internet Capabilities 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 Cisco Systems: Building Leading Internet Capabilities 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 Cisco Systems: Building Leading Internet Capabilities 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 Cisco's Cisco needs to make to build a sustainable competitive advantage.