Professional Documents
Culture Documents
Routing The Path To End-To-End Communication
Routing The Path To End-To-End Communication
to
End-To-End Communication
An Analysis of Cisco Systems and how the use of
Information Technology gave them a Competitive
Advantage
Mira Vissell
ISM 158 Business Analysis Paper
March 4th, 2004
Table of Contents
Objective
Section I: Industry Summary: An Analysis of Network Equipment Industry
A. Industry Profile
B. Competitive Strategies within the Industry
C. Porter Model Evaluation of Industry Forces
D. Globalization of the Industry
E. Importance of Information Technology in the Industry
Section II: Company Perspective: An Analysis of Cisco Systems
A. Cisco Systems profile
B. Market and Financial Performance
C. Competitive Strategy Statement
D. Significance of Information and Information Systems
E. Strengths and Weaknesses of Cisco
Section III: Structured Analysis of Information System Use
A. Strategic Option Generator
B. Roles, Roles and Relationships
C. Redefine/define
D. Significance of Telecommunications
E. Success Factor Profile
Section IV: A Final Analysis of the Success of Cisco Systems
A. The Success of Business Strategy and IT used to Date
B. The Effective Position of the Company for Future Performance
Bibliography
Objective
The objective of this paper is to analyze how Cisco Systems gained competitive
advantage in the networking industry through the use of information systems and key
business strategies.
This paper has four sections that help in this analysis. The first section looks at the
network equipment industry profile and examines the different competitive strategies
within this industry. The porter model can be a way of examining the industry forces. It
also looks at how companies in the industry are often forced to go global and how
information systems have a huge impact of the competitive advantage of companies in
the industry.
Section two deals with the company, Cisco, and takes a look at the profile of the company
as well as key business leaders. The market and financial analysis shows how Cisco is
doing relative to previous years and the importance of information technology shows how
Cisco has gained a competitive advantage over competitors. The strengths and
weaknesses of Cisco are also examined to help understand Ciscos standing.
The third section takes a deeper look into how information technology has helped Cisco
and the fourth section is a final analysis of the success of Cisco and how IT has helped
them gain a competitive advantage.
The fourth section is a final summary of how Cisco is positioned.
1998
1999
2000
2001
2002
1,350.10 2,096.00 2,668.00 -1,014.00 1,893.00
-593
-257 -2,995.00 -24,307.00 -3,585.00
970 4,766.00 1,219.00 -16,198.00 -11,753.00
-30.9
-9
147.9
-13.4
-119.7
Figure 1.1
2003
3578
N/a
-770
N/a
Switches
Large Corporations
North America
Vertically Integrated
Product Strategy
Network Software
Cable Product
Services
Customer Strategy
Public Institutions
Small/med Businesses
Market Strategy
Asia
Europe
Manufacturing Strategy
Vendor Emphasis
Personal
South America
Outsource
Distributors
Sales Strategy
Internet
Sales Representatives
Independent
Company Strategy
Alliance
Joint Vendors
Engineering
System
Marketing
Figure 1.2
Differentiation
The network equipment industry follows the strategies of differentiation to deal with
competition. Companies such as Cisco and Lucent compete within the
industry by offering the most advanced and reliable network
equipment to its customers. Cost of the equipment is often not as
important to the customers of this industry because businesses need
6
this network equipment to run their business. Companies therefore
offer a wide range of products and different product packages as a way
of competing.
Companies such as Cisco rely heavily on brand recognition to compete
in the network industry. Cisco is very aggressive in their Are you
Ready? advertising campaign to make the public aware that most of
the Internet and many of devices are build on products from Cisco. This
helps companies be able to compete and stay strong in the industry.
Innovation
Differentiation strategies can only be successful if they have convenience, cost
saving, and reliability. Companies have to be able to spot the newest trends and
desires and create the products. Therefore innovation is very important for companies in
the industry. They have to be able to stay on top of new technology and thus stay on top
of their competitors. In 1996 Cisco launched Cisco Connection Online
Website to help customers in learning about new Cisco products, ask
and answer questions and provide a forum to provide customers with
easier technical support. Customers were satisfied and this boosted
Ciscos sales by 70 percent.8
Growth
Growth in the industry is another important factor for competitive advantage. Companies
have to be ready to expand and grow in order to compete. One of the ways the companies
such as Cisco have been able to grow is through acquiring new companies that have the
new technology that is needed. Instead of developing technologies in house
most companies find that it is often faster to just buy the technology.
Acquisitions and the ability to quickly integrate the newly acquired
companies is key.
Alliance
Forming alliances with other companies has always been important for the industry.
These alliances can allow that technologies be combined to use as one. Lucent has
formed alliance with Sun Microsystems, Yahoo, and Strategy.com to
allow network operators to offer mobile Internet applications on such
things as personal digital assistants and cell phones. Cisco also formed
alliances to provide better products and services. They formed an
alliance with IBM to offer customers open storage networking solutions
for data intensive computing. Much of their alliances are done in the
form of outsourcing as well. They gain competitive advantage by
outsourcing.
Summary of Business Strategy Model
The business strategy model looks at the categories of strategies for
the network equipment industry. The products and customers are
8
7
defined to show who and what they are competing for. The market is
the where portion, or what places they will focus mostly in.
Manufacturing and sales evaluates how they are going to maintain
competitiveness. The company strategy explores what exact industry
they are in. Information systems strategy talks about each service or
system that the company will focus on.
Bargaining
Power of
Suppliers
Component Manufactures
Outsource Manufactures
IT vendors
Global Competition
Changing domestic Companies
Start-ups
Intra-Industry Rivalry
SBU: Cisco
Rivals: Nortel, Juniper, Lucent,
Enterasys, Avici, 3Com, Extreme
other small start-up Companies
Substitute
Products and
Services
Bargaining
Power or
Buyers
ISP service providers
Large Corporations
Small Medium business
Education
Home office (personal)
Intra-Industry Rivalry
The intra-industry rivalry consists of all the companies and organizations that provide
network equipment and software to businesses. The companies can range from smaller to
giant companies. Smaller companies provide one form of network equipment that may be
top of the line but they usually lack the capital to expand their line. Therefore the bigger
companies easily acquire them. The bigger companies such as Cisco, Nortel, and Lucent
compete with each other by selling whole packages to their customers.
8
Bargaining Power of Buyers
The bargaining power of buyers consists of the buyers with the most volume. Such
companies like large ISP companies such as AOL, Earthlink, AT&T, and Qwest,
have a huge power over the industry. They can decide what vendor to use and can singlehandedly make or break a company. Large corporations, government and
education institutions also buy large volumes of products and services.
Businesses have to be ready to compete and have the best strategies for getting the buyers
of the most volume.
Bargaining Power of Suppliers
Companies that are the most unique in the market control the bargaining power of
suppliers. Such companies like IT vendors and component manufactures make up the
majority of this section. Cisco focuses on its core abilities, such as marketing, design,
strategy, and customer service, and hires other companies to build their equipment.9 Cisco
buys most of its parts from specialized manufacturers and so they hold a great deal of
power over them. They can choose which manufacturer for each element of their
hardware parts. Cisco and other companies often outsource their products
to manufacturers such as Solectron and Flextronics to cut cost and
since they represent a large percentage of the manufacturers business
Cisco and other companies have a great deal of power.
New Entrants
The new entrants to the network equipment industry include global competition as well
as local companies. The global competition comes from companies oversees entering into
the market as start-ups or even gaining power and then entering market. Global
competitors such as Huawei from China may pose a serious threat to
Cisco in the future when they cut into Cisco's profit margins for such
things as switches and routers. Huaweis strategy is to undercut Cisco's
prices by as much as 50 percent. Currently switches and routers
account for 80 percent of Cisco's sales and profits.
New entrants can also include domestic companies that already have a large market value
to change their business strategies and cut into networking. Companies such as IBM
already have the money and talent to enter the industry and they can
decide that funding startups are more cost effective. Start-ups can
have an advantage too because unlike their large established
competitors they do no have to worry about dealing with old products.
They can set all their capabilities and resources to accomplish one
goal.
Substitute Products and Services
Substitute products and services include anything or any company that could be an
alternative to networking products. Such things like wireless access that would bypass the
need to have a network. Cisco itself has touched a little bit into the voice over IP market,
but hasnt particularly received recognition. This feature to the Internet could be a major
9
9
substitute to routers and switches that Cisco and other networking companies mainly deal
with.
Used equipment can also be a major competitor. When the dot-com bust
happened many network providers who were left with billions of dollars
in debt started to sell off some of their gear to pay back creditors. A lot
of the gear was networking equipment and was still in its original
packaging. The companies were so eager to sell that they would sell
their brand new equipment 20 to 25 cents on the dollar.
Such things as the telephone and snail mail hold a small amount of
competition simply because it is a way that people can communicate
without the use of networks. They can be seen as drawing away
customers.
10
Also Lucent has offices and distributors in more than 65 countries and
derives 34% of their total sale from areas outside of America.
With this growing need to go global, companies in the network equipment industry have
had to deal with these adoptions and make it a goal to branch out and provide equipment
overseas.
11
A medical student, Bill Yeager, was assigned to design the router. He
was able to connect the computer science department with the
medical department. He was the one who designed the boxes
operating system. Len Bosack and Andy Bechtolsheim along with other
graduate students and staff members designed the boxes computer
board.
With the router beginning to gain fame, colleges and universities
wanted to purchase them. Stanford University was getting tired of the
crew using their resources and equipment to make boxes so they told
them they would no longer fund the operations. Lerner and Bosack
along with a few other students took their operations off campus to
their house. They were working full time at this point to write code and
assemble boxes.
As the demand for routers went up, and it did at a very rapid pace, the
small crew found that they were working longer and longer hours. The
commercialization of the Internet in 1987 drew in a plethora of
customers. Cisco found that they never had to advertise; instead,
customers were coming to their doorstep wanting the new technology.
The staff at Cisco soon realized that they needed outside help to
dealing with their growing success.
In 1987 Cisco received its first and only Venture Capitalist funding from
Donald Valentine of Sequoia Capital. Sequoia systems agreed to front
$2.5 million dollars for a 32% share in the company. He soon hired John
Morgridge as the president and CEO. Sales quickly jumped from $1.5
million in 1987 to $28 million in 1989 and the company went public in
1990. Lerner was in charge of customer services and Bosack was chief
scientist. Lerner was upset that she didnt get to be CEO and soon
arguments broke out that led to her getting fired.
Cisco began seeing more and more competition. Their way of dealing
with this growing competition was acquisitions included network
company Crescendo Communication and ATM product maker
StrataCom. In 1995 John Chambers succeeded Morgridge as president
and CEO while Morgridge become the chairman. By 1998 Ciscos
market capitalization passed $100 billion and they were thought to be
the top spot in the market-cap race among Silicon Valley companies.
They were synonymous for the Internet and contained 85% of the
market for routers. This amazing company was not immune to the
economic slump following the dot-com bust in 2000.
Today Cisco considers itself to be in the end to end communication
business. Cisco products power a majority of the Internet and many
use its products businesses all over the world.
12
Business Leaders
John P. Morgridge: Chairman former CEO
John P. Morgridge was the first CEO of Cisco Systems. Valentine selected him to be CEO
because he was an industry veteran, a proven leader, a fiscal conservative, and a grownup leader. Morgridge had an MBA from Stanford and from University of
Wisconsin. Cisco never had a 5-year plan in the Morgridge years. At
Cisco we build a one-year plan with 80 to 90 percent assurance well
meet or exceed our goals, said Morgridge. 9
Under Morgridge, Cisco went from $5 million in sales to over $1 billion
and from 34 employees to over 2,260 employees. It was under
Morgridge that Cisco went public in 1990 and in 1995 he was
appointed Chairman. John Chambers became CEO through mutual
consensus because Morgridge felt it was time to move on. He is
currently still the chairman for Cisco and focuses on educational
aspects of Cisco.
John Chambers: President and CEO
John Chambers came to Cisco when Morgridge was still CEO. In 1991,
he became senior vice president of worldwide operations and
Morgridges right-hand man. In 1994 he became Vice president and the
following year became CEO as Morgridge stated that he was too old to
be CEO.
He worked at IBM, which taught him to sell at multiple levels within an
organization, something of which would help him at Cisco10. He also
worked at Wang Laboratories where he had to be part of 5 layoffs. The
layoffs deeply affected him and he promised to do almost anything to
avoid another such catastrophe. His promise could be kept until the
economy crashed and Cisco began falling in profits.
John Chambers has helped with three unique aspects of Cisco: Its successful acquisition
record, its highly developed use of Information Technologies, and unusually tight-knit
culture.11 Chambers defines his role in these terms: to develop and
empower a world-class leadership team, and to act as spokesperson
for the company and the Internet economy.
Pete Solvik: Former CIO
Pete Solvik was the Senior Vice President and CIO of Cisco. He was at Cisco from 1993
till July 2001 during which he was instrumental in driving the company's worldwide use
of information technology. He was the one who helped create Cisco Connection Online
(CCO) which has been recognized for more than 40 Industry top website awards over the
9
10
11
13
past five years. Most recently, Internet Week named Cisco as the #1 technology company
using the Internet to run its business.
Don Valentine: Venture Capitalist
Don Valentine was the first and only venture capitalist that Cisco Systems received.
Through his help, Cisco was able to become a competitive corporation with growth and
proper management. Valentine helped pick Morgridge as the CEO and helped set up
different sectors of management. He was the chairman from 1986 to 1995 when
Morgridge succeeded him. Through Valentines help, Cisco was able to get the
management they needed at a time that was most dire. Valentine helped Cisco go public.
Brad Boston: CIO Since 2001
Brad Boston is the CIO of Cisco. Under his leadership, Cisco's new web site, Cisco.com
was launched in September 2002. Cisco.com delivers a customer-focused, easy-to-use,
highly integrated application for doing business with Cisco. Focused on improving
the company's productivity, speed and agility, Boston is driving Cisco's
IT foundation strategy to enable end-to-end business processes and IT
efficiencies throughout the organization.
12
14
Sales ($ millions)
25000
20000
15000
10000
5000
0
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2000
2001
2002
2003
2002
2003
Figure 2.113
Net Income ($ millions)
4000
3000
2000
1000
0
-1000
1998
1999
2000
2001
-2000
Figure 2.214
Routers and Switches are still the main products, accounting for about
80% as of Ciscos business. However Cisco may not be able to
command high prices much longer because many smaller competitors
are starting to offer products with similar offering as Ciscos own
equipment at much lower price. It is very important for Cisco to expand
its source of income to continue its growth.
14
15
4. Pick the right strategic partners.15
With the competitive strategy of having a broad product line, it is important to keep on
top of the technology that is emerging. Cisco has always tried to keep track of the new
products that its customers needed and then buy the leading company in each product
category. To be able to keep the steady rate of acquisitions flowing in, Cisco had to keep
its stock high by ensuring that Wall Street viewed them as the backbone for the Internet.
To this day they still are synonymous for the Internet and hold 80% of the market for
routers.
By picking the right strategic partners to help position them in the competitive market
and by acquiring start-up companies, Cisco has been able to maintain a competitive
advantage over others.
16
are only one level away from him. In this way he is able to hear many
different opinions about what is going on at different levels. Many of
these vice presidents are ex-CEOs from companies that have been
acquired by Cisco. This leads to a large amount of technology savvy
people.
Brand Strength
Cisco has a huge advantage over other companies in that they have such a well-known
brand. Cisco is frequently thought to be synonymous for the Internet. They have
established themselves as being the standard for networking products. Through
advertisements that push the Internet as being made up of Cisco, they have been able to
gain a competitive advantage.
Employee Environment
Its no wonder that Cisco was voted number 28 out of the best 100 places to work.
Individual empowerment, access to information, and increased
productivity are an integral part of the culture that Cisco advocates.
Employees are able to have meetings and make appointments with
higher-level management if they so desire to voice opinions. There are
little complaints that can be found on the site of Cisco. The employees
are happy and excited about their work and this transfers into the
customer environment as well. For example, engineers at Cisco are
required to spend time with customers regardless of what their areas
of research and development are.
Weaknesses
Acquisitions where leadership left
One of Ciscos key competitive tactics is to acquire companies that have some sort of
market advantage to Cisco. Through acquiring them, Cisco is able to sidestep the
Research and Design phase of producing new products. They use the information brought
to them by the new company. According to John Chambers, if Cisco lacked the internal
resources to develop new products in six months, it had to buy its way into the market or
miss the window of opportunity. This can be seen as a strength and a weakness. The
weakness comes when the valuable employees of the acquisition simply leave after the
deal is made, leaving Cisco with little or nothing to work with.
In the case of Monterey Networks Inc., Cisco had to take a $108 million write-off simply
because all three of Montereys founders walked out after the deal was made. The chief
executive of GeoTel Communications Corp. walked out after nine months. There are
many more cases of the top executives and engineers walking out after the deal was done.
This has hurt Cisco a great deal in that they often have to sack the company when the top
people leave.
17
Supplier
Differentiation
Cost
Thrust
Innovation
Competitor
Growth
Mode
Offensive
Defensive
Direction
Use
Provide
Execution
Strategic Advantage
Fig 3.1
Target
Alliance
18
The strategic target in the case of Cisco is customer. Commitment to customer
has always been, and continues to be part of Ciscos core culture. CEO
John Chambers has always held a strong belief that in order for a
company to survive, it must listen to its customers.
Thrust
Ciscos primary business strategy is differentiation. Cisco succeeds
with this strategy by continuously providing value to customers by
offering a wide range of solutions in networking for customers. Ciscos
secondary strategies are growth, innovation, and alliances. Growth has
played a big role in what Cisco is able to do. By growing and acquiring
new companies, Cisco has been able to keep its stock relatively high
which in turn allows them to provide customers with the best
technology. One of Ciscos major innovations is the Cisco Connection
Online (CCO) Website. The CCO provides customers with easy access
to information about the company and products, as well as customer
support. Cisco formed alliances with other companies to provide
resources and talents that would be too difficult to acquire on its own.
Mode
Cisco has a very strong offensive mode strategy. Right from the
beginning they were leading the way for other companies in the
industry. Cisco seeks to dominate the market by always offering the
top of the line, newest and most improved products and services. By
doing this they are able to gain a competitive advantage and stay in
the offensive strategy.
Direction
Direction defines the users and the use of the information systems.
Cisco has a direction of use and provide strategies. Cisco internally
uses its information systems, such as the CEC (Cisco Employee
Connection) to help reduce time on many administrative tasks.
Employees with Cisco can access their company information as well as
personal information. The CEC breaks down the barrier in
communication. In this case the users are within the boundaries. Cisco
also extends out of the boundaries through means of the CCO. The
CCO allows for quick flow of information between the partners,
suppliers and customers. Important data about products and services
is posted on this site and made available for all to see. Through these
services Cisco is able to provide its users with cost-saving, easy to use
information systems that give it a competitive advantage in the
industry.
19
Sales
Manufacturing
Marketing
CFO
EVP
EVP
EVP
Finance IS
Sales IS
Mfg IS
Marketing IS
CIO
Fig 3.2
20
C. Redefine/define
The redefine/define concept is important in understanding the approach in using
information systems to gain a competitive advantage. The following model shows the
value to customer analysis. It examines the delivery process to see if it adds value to a
customer, which in turn effects the buying decision.
Value to Customer Analysis:
Cisco Systems
Product / Service
Ordering
ERP System
Save Time
Cisco Connection
Online
Manufacturing
Connection Online
Delivery
Process
Product /
Service
Value-Add Process
Manufacturing
Value to customer
Fig 3.3
21
Cisco implemented Cisco Connection Online and Manufacturing
Connection Online.
In 1995, Cisco decided to implement its famous ERP system. At that
time it was still using separate systems for each department. Cisco
decided to implement the ERP system, which is now able to extend the
network to customers, suppliers and partners. With this network, Cisco
can distribute information easier. The system helps Cisco adapt to new
advancements in technology. The ERP system is able to have its
partners and suppliers act as part of the company.
It was through this system that Cisco was able to create Cisco
Connection Online (CCO). The CCO is safely the strongest link between
customers and Cisco. It all came to pass in 1996 when Solvik decided
to create the website. He employed developers, artists, technical
writers, and financial experts to revamp the entire site. Every
department that works with customers - market, public relations,
documentation, engineering, customer service, and tech support was
individually responsible for building and maintaining its respective
pages on the CCO. The day a product debuts, documentation, from
manuals to marketing info is put online. Customers can report
problems and submit queries. Bug alert feature posts info about
software problems within 24 hours after they are found. Customers can
reach bug navigator to find info on specific problems. Those looking to
purchase can search online databases of authorized Cisco equipment
resellers.16 Cisco formed partnerships with suppliers to enable rapid
exchange of information and its automated gathering of product data
information help to reduced delays in product development that
resulted from delays in the exchange of information.
The sales organization launched an e-sales portal in March 2001 to streamline the sales
process and boost productivity. The portal reduces the time needed to track bookings and
manage lead times and shipments. It also conveniently presents background information
salespeople need to best serve their customers -- for example, sales statistics, customerrelated alerts, pertinent news about customers and competitors.17
The CCO and ERP are vital to the company because it ties together
chip manufacturers, component distributors, electronic manufacturing
services, logistics partners, Cisco employees and customers into a
single information system. Together these groups act like part of a
single company because they are operating on a unified information
base.
Making the Cisco Connection, David Bunnell, 2000, pg. 139
Putting the IT into productivity.
http://www.cisco.com/en/US/about/ac123/ac114/ac173/ac205/about_cisco_packet_netizen09186a0080101
4f7.html
16
17
22
The CCO also offers customer support through online forums and web
queries. Cisco Technical Assistance Center (TAC) Web site is more cost-effective than
call centers with its self-service approach. The TAC currently offers about 5200
documents that address high-volume, low-complexity problems.17 Customers can
send their queries in or talk in the forum to other customers that may
have the solution to their problem. Over 80% of Ciscos customer
support is handled through the web resulting in significant cost
savings.
It was around the time that the CCO was becoming popular that Carl
Redfield, then senior vice president of manufacturing, decided that
Cisco needed to add more value by having less people touch the
product. He decided to outsource manufacturing. He also had a special
subset of CCO set up that is now called the manufacturing connection
online (MCO). Customers can look up the specs for routers, switches,
and other networking gear on the MCO. Many of the finished products
never even cross a Cisco buildings premises.18 Ciscos ability to supply
real-time supply and demand information to manufacturers and
suppliers enables them to replenish orders faster. This improvement
allows Cisco to considerably reduce inventory costs. Ciscos
information systems also have enabled manufacturers to ship orders
directly from the manufacturer to the customer without having to go
through Ciscos distribution centers. With direct links to its
manufacturers, Cisco can streamline procurement, eliminate paper
orders, save time, and expediate delivery.
Based on open and steady communication with customers, Cisco is not
only able to provide individual support, but also uses that information
to create products that meet the rapidly changing needs of its
customers. Cisco is able to keep up with the growing demand of its
products based on its comprehensive knowledgebase and the flexible
nature of its operations. It can be concluded that Cisco used information systems to
redefine a major business process.
D. Significance of Telecommunications
Telecommunications have played a big part in the success of Cisco. Cisco uses its
telecommunication infrastructure to enhance every aspect of its
business including interaction and information sharing between
employees, customers, suppliers and manufacturers. It does this by
having all of its internal applications in one unified web-enabled
interface. In this way, employees and vendors can share the same data
and tools.
1
18
23
24
evolve their IT system to provide better value to their customers. The
success of the information systems has allowed the company to remain
a leader in the industry.
25
Linkage to Customers
Starting right from the top with John Chambers, customers are thought
to be key in the success of Cisco. Everyone at Cisco is eager to provide
a broad range of solutions to fulfill whatever the customer wants. Cisco
strives to keep its eye on the need of the customer and not fall in to
the trap of thinking that they know what the customers want. By
catering to the customers with such systems as CCO and MCO, Cisco is
able to increase customer satisfaction, which leads to better
competitive advantage.
Culture
Cisco has a very strong company culture and part of this is through the use of the Cisco
Employee Connection (CEC). Employees are able to have the most up to date
information and post news or hold discussions online. Executives and managers
announce new acquisitions and make staff announcements. The CEC even stores personal
information and benefits. Everyone using the CEC feels more connected to
the company as a whole.22
Because of its reliance on acquisitions Cisco is very eager to accept
good ideas that come from outside. By rewarding managers for
successful integration of acquisitions, Cisco creates a culture that is
open to the best new ideas. At Cisco, ego is discouraged and productivity is
rewarded. These values are what make Ciscos culture unique and
successful.
26
current information regarding Ciscos performance resulting in an
increase in employee morale, and a total optimization of the workforce.
Externally, Cisco continues to maximize the utilization of its IS
architecture for customers with online help. The CCO is an amazing site
for customers who want to buy, research, or find out more about
Ciscos products. CCO has become one of the largest Ecommerce web
sites in the world with a run-rate of over $25 billion annually. Over 90%
of software upgrades are now delivered electronically, lowering costs
and delivery times substantially. MCO has also brought huge benefits
for the company. Currently 50- 60% of Ciscos unit volume from
manufacturing partners comes from MCO. One third of
Ciscos new technologies are from partnerships and acquisitions. 23
Because of the IS, Cisco has been able to create an environment that keeps its customers,
suppliers, partners, and employees happy. By implementing and updating their
technology they are able to gain a competitive advantage of other companies in the
industry of network equipment. Cisco would not be able to sustain a competitive
advantage without the use of IS.
23
CCO. http://www.interwoven.com/news/press/1999/991129ccopr.html
27
Bibliography
Bunnell, David, Making the Cisco Connection, New York: John Wiley &
Sons, Inc., 2000.
Fox-genovese, Elizabeth. Profits and Prophets: The Global Economy and the
Erosion of the Family. January 2001.
http://www.worldandi.com/specialreport/2001/january/Sa21295.htm
Grosvenor, Franklin and Terrence A. Austin. Supply Chain Management Review. August 1,
2001. http://www.manufacturing.net/scm/index.asp?
layout=articleWebzine&articleid=CA154379
Lowering the Cost of Training - The Cisco IP/TV Network Streaming Video Solution 2003.
http://www.cisco.com/warp/public/779/video/iptv/roicalc/ROI_AI.pdf
28
Bunnell, David, Making the Cisco Connection, New York: John Wiley &
Sons, Inc., 2000.
This book provided me with a vast head start to the researching process. Although it is outdated,
it gave me a good idea of the story behind Cisco and the general information systems at Cisco.