Cisco Systems Analysis

Cisco Systems: The Summa Four Case Analysis

EXECUTIVE SUMMARY

Cisco Systems is a publicly held, multi-national corporation that provides internet infrastructure and data-networking equipment and support primarily to enterprise companies, small businesses and service providers (Exhibit 1). They have dominated the next-generation, network application industry through the strategic use of acquisitions and mergers which has ultimately become their competitive advantage against rivals such as IBM, Hewlett Packard, Dell and Juniper (Exhibit 2). This strategic use of acquiring complementary, technology-related companies has enabled Cisco to grow rapidly and adapt to, as well as create, changes in the market quickly; crucial in an industry plagued by shrinking product life-cycles.

Cisco’s core competencies include focusing on high customer satisfaction, an ability to introduce new products to the market quickly and being extremely cost efficient. The corporation has always focused its efforts on being an industry leader and recognized early on that advances in technology could be realized faster through acquiring other companies than by internally developing new products and ideas. This realization led to the development of an organization-wide acquisition strategy that enabled Cisco to analyze potential value-added companies and integrate them into Cisco’s culture and manufacturing processes quickly and seamlessly.

Summa Four represented such an acquisition possibility; they were already established with products that would enable Cisco to expand their services to IP (internet protocol) networks which would allow them to transmit voice, data and video via the world’s first, standard, programmable switch. This paper shall analyze Cisco’s strengths and weaknesses through PESTEL Analysis, SWOT Analysis, VRINE Analysis, PORTER’S FIVE FORCES Analysis and STAKEHOLDER Analysis and shall give the Cisco Board recommendations pertaining to the possible acquisition of Summa Four.

INTRODUCTION

Cisco Systems, founded in 1984 by husband and wife team Leonard Bosack and Sandy Lerner, is a multi-billion dollar corporation that dominates the data-networking equipment and software industry. Cisco’s initial networking technology grew to include products and services that met individual, small to medium-sized company and multi-national corporation’s needs. After going public in February, 1990, the company’s growth exploded rapidly and just eight years later was valued at over $100 billion. Much of the company’s success can be attributed to their organization-wide strategy of outsourcing and acquiring companies that added corporate value, enabled immediate profitable growth and