INTRODUCTION
Cisco Systems, Inc., (Cisco) is an American-based multinational digital communications technology
conglomerate corporation headquartered in San Jose, California. It is one of the largest technology
companies in the world, ranked 74 on the Fortune 500 list of companies. (Wikipedia, 2023). The
company develops, manufactures, and supports systems for networking, telecommunications, data
centre, business collaboration, cloud, cyber security, Internet of Things (IoT), and energy management.
Cisco sells its products in approximately 115 countries through direct sales, distributors, value-added
resellers (VAR), and system integrators (SI); and with more than 225 sales and support offices in 75
countries.
The firm’s Fact Sheet states that Cisco's networking solutions connect people, devices, and networks for
information transfer without regardless of time, place or type of computer system. (Cisco Fact Sheet)
ANALYSIS OF THE ENVIRONMENT
POLITICAL. Cisco deals with various factors that affect the political landscape of countries it operates in.
Some of these factors that may have direct effect on the firm are –








Law governing the establishment of offices by multinational companies (MNC) including
mandatory appointment of distributors and resellers (channel partners)
Telecommunications and networking policy and regulations
Customs policy for importation of technology products
Trade regulations & tax or duty
Labour Law
Data Privacy Law
Risks of political instability
Risks of invasion
An in-depth analysis of each of these factors can help determine the feasibility of entering the market in
a given country. Standardization of business processes and legal documents should be considered but
maintain flexibility in critical areas that affect the flow of business; such as (1) effects of taxes & duties
to the “end-user price” and (2) mandatory registration of equipment that causes delays.
ECONOMIC. Cisco can analyse the economic stability of a given country using government-released
financial information. Factors to consider are –








Exchange rates & stability of host country currency
Inflation rate
Interest rate
Workforce skills availability
Labour costs
Unemployment rate
Market demographics and psychographics
Threats of Competition

Machine obsolescence and licence expirations
Cisco should consider some micro-environmental factors such as competition. Competitors such as
Fortinet and Huawei that can offer similar products at lower prices have become aggressive in winning
customers from Cisco.
SOCIAL. Social factors should be analysed carefully as these can identify subtle influences on how
employees work and why customers buy. Some of the factors that should be analysed are 





Social class hierarchy
Inclusion in terms of gender and disability
Dominant and subculture religion or faith and its practices
Education and skills level of professionals
General health of the populace including sources of health risks
Wealth or poverty level
Availability, capacity, and over-all well-being of the workforce have substantial effects on the
profitability of building a business in any given country. Also, a strong workforce attracts investors.
TECHNOLOGICAL. Cisco has been the gold standard for networking, having developed the first router
that allow communication between different networks. To maintain or widen that lead, some
technological factors should be considered and analysed –



Technologies and business models and processes derived from current technologies
Impact of disruptive technologies to Cisco’s offerings
Microchip shortage
The recent pandemic has caused major issues and delays in Cisco’s business worldwide. Although the
firm was able to pivot, the global shortage of microchips has severely affected production and sales of
the firm’s hardware products.
LEGAL. Cisco’s partnership with distributors and resellers may be the most common factor encountered
in any country the firm operates in. The factors that follow are usually borne from such partnership –




Information confidentiality – partners and customers
Consumer protection
Partner training policy for sales, pre-sales, and post-sales teams
Corporate governance
Cisco’s engagement with partners is usually governed by a non-negotiable agreement known as
“Indirect Channel Partner Agreement (ICPA). Changes that partners usually raise for negotiations are
immediately turned down; and instead, addenda are authored to cover proposed revisions that serve
the uniqueness of a given channel partner.
ECOLOGICAL / ENVIRONMENTAL. The number of countries that enforce stronger measures related to
ecological and environmental matters are growing; and Cisco should consider the impact on its business,
both with channel partners and with customers.





Paris Agreement on climate change
Corporate Social Responsibility (CSR)
Weather / Climate
Recycling and usage of renewable energy
Waste Management
Cisco is committed to environmental practices as it has set a target of net zero greenhouse gas (GHG)
emissions across its value chain by 2040 (Cisco website, 2023); which is set a decade earlier than the
Paris Agreement’s.
PORTER’S FIVE-FORCES and the LIFE-CYCLE MODEL
Cisco developed the routing technology that pioneered a whole new technology for communicating and
sharing information. It had no competition in the Embryonic Stage, as it improves on the technology
based on information the firm gathers from customers. Buyer Power is usually strong in this stage.
As the most well-known brand, it enjoyed a quasi-monopolistic status that gave it Supplier Power. It
came to a point when Cisco faced its weaknesses that caused it to stumble: Ambition, Distraction, and
Management. The company admitted to having lost focus and was slow to make decisions and execute
(Duffy, 2011). With the product moving to the Growth Stage, Competitive Rivalry may rise.
Now having many strong competitors, the firm’s technology is compared in various websites where
competitors beat Cisco in terms of performance, price, and commercial policies (PeerSpot website,
2023). This shifts the balance from Supplier Power to Buyer Power where customers have equally
reliable world-class alternatives such as Huawei, Fortinet, Palo Alto, and Dell.
Such a shift has naturally brought forth the Threat of Substitution, particularly choosing competitors
over Cisco primarily due to price; and now, even based on performance.
For indirect substitution, Cisco’s customers that have migrated to cloud will have eliminated much of its
reliance on physical networking and cyber security infrastructure. For additional layers of security, Palo
Alto Networks has developed a pay-per-use licencing scheme that makes it cheaper yet still manageable
compared to a fixed licencing model.
As the lifecycle entres the Maturity Stage, the demand for a specific technology will flatten, and
eventually reaching the Decline Stage, both stages affecting players that have weak financial capacity.
This may further enhance Buyer Power. It is in the Decline Stage where players like Cisco may retire
technologies that can no longer be scaled; as well as develop more efficient and more effective versions
of the same technology. This could be in the form of disruptions that, as it picks up momentum, can and
will encourage Threat of New Entry. New players may develop better, cheaper, more efficient ways for
customers to have their requirements fulfilled maybe even in a more worry-free business model
compared to Cisco’s current model.
LEADERSHIP
Cisco practices five themes for effective leadership known as C-LEAD which stands for Collaborate,
Learn, Execute, Accelerate, and Disrupt.
The firm's leaders were tested when the COVID-19 pandemic hit, being primarily a networking company.
This put Cisco in a very vital and profitable position due to the sudden need of collaboration and other
critical infrastructure.
Cisco prioritised the technology requirements of its customers, particularly the government and the first
responders, in order to keep essential services and support operational in government and healthcare
facilities.
Next on its list are its employees, helping them cope with working from home, and anticipated the
eventual return to office with protocols in place. Employees also received regular updates to ascertain
that their well-being is managed through the help of mental health workers.
Suppliers were also included in the programme as protections were set in place for their safety and
welfare.
Service to the communities was not forgotten as Cisco donated US$ 53M in cash and personal protective
equipment to non-organizations that provide care for vulnerable citizens.
(Cisco website, 2021)
BUSINESS STRATEGY IMPLEMENTATION
Cisco has proven itself as a firm that learns from its mistakes by conducting critical evaluation of
mistakes made then devise logical strategies that will help the firm alleviate the problem and even profit
from it (Duffy, 2011).
The main strategies that Cisco implemented were –


the use of advance technology to develop and manufacture its products in fair prices
the shift of its ordering system from manual to e-business model.
These strategies fit the general demands of the market as these both aid in managing costs as well as
prices. They also help ascertain that customers can place orders conveniently through an online system.
With the surge of order, equipment are manufactured faster than before that fulfills supply availability
commitments to customers.
Cisco remains to be a formidable player despite strong competitors that resort to price war and even
imitation. The firm’s way of doing business is a good indicator that it has accepted the reality of rapid
changes in the market; particularly, in customer preferences. It has been relentless in keeping itself a
leader and a relevant player in the technology industry.
REFERENCES
Cisco Blogs, 2023, 'Connecting in a time of crisis: Cisco’s response to COVID-19', viewed on 01 March
2023
Cisco Fact sheet, viewed on 02 March 2023
Cisco website, 2023, 'Environmental Sustainability', viewed on 28 February 2023
Cisco website, 2023, 'Five Themes for Effective Leadership', viewed on 28 February 2023
Duffy, J 2011, 'Cisco's 3 biggest weaknesses', viewed on 01 March 2023
IvyPanda, 2022, 'Strategic Management: Cisco Systems, Inc. Case Study', viewed on 01 March 2023
Wikipedia, 2023, 'Cisco', viewed on 28 February 2023