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Cisco Systems: Systems, Products, Forecasting Models, and Costs of Errors

Cisco Systems: Systems, Products, Forecasting Models, and Costs of Errors. By: Ann Mesavage Richard McManus. Background. Largest manufacturer of switches and routers Briefly was the most valuable company in 2000- ($555 billion company worth, stock price $80/share)

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Cisco Systems: Systems, Products, Forecasting Models, and Costs of Errors

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  1. Cisco Systems: Systems, Products, Forecasting Models, and Costs of Errors By: Ann Mesavage Richard McManus

  2. Background • Largest manufacturer of switches and routers • Briefly was the most valuable company in 2000- ($555 billion company worth, stock price $80/share) • Is thought to have 85 percent of the switch market for the internet

  3. Cisco’s success • Large outsourcer • Many acquisitions- between $20 billion to $30 billion between 1993 and 2000 • Sell many items over internet • Website- Cisco Connection Online (CCO) “Cisco uses the Web more effectively than any other big company in the world. Period.” - Fortune Magazine

  4. Cisco’s Success (cont’d) • Internet: supply chain extranet- Manufacturing Connection Online (MCO) • Cisco Employee Connection - four fifths of technical training online • Online quotas • Customer service • Job applications • Accounting- closing accounts, “virtual close”

  5. Problems • 2000-2001 recession • Fall in technology related stock • Dotcom companies- sales down, affect on Cisco • Sales fell: $22.3 billion (2001) to $18.9 billion (2003)

  6. Effects on Cisco • Oversupply in inventory (unsold) • Competitors/suppliers cut back on money • Share price down by 80%, stock closed at $14 • Competition with smaller companies • Slow down in Asia and Europe

  7. Affects on Cisco (cont’d) • Large layoff (6,000-8,000 employees) CIO Peter Solvik CFO Larry Carter CEO JohnChambers

  8. Errors in Forecasting • Did not factor growth into models • Too much inventory • Over reliance on technology • Wrong economic factors - focused more on orders, than big picture “Do our systems do a great job of telling us where we are today? Yes, but they don’t tell the future.”– CEO John Chambers

  9. Cisco Restructured • Centralized engineering and marketing organization • Track products and profitability • Improving “virtual close” system • Improve brand recognition “Cisco is not as familiar to people as some of the other large IT players… there is definitely the opportunity to increase awareness.” -Sue Bostrom, Cisco’s chief marketing officer

  10. Poll

  11. Website • Very User Friendly • Gives Up to Date News • Broken Into Many Categories like “Products & Services”, “Ordering”, and “Support” http://cisco.com/

  12. Website • Allows the User To Create An Account • Accounts: • Purchases Made Online • Tracks Products that the User Purchases • Also Provides Training And Events • Allows users to learn about the business value of networking solutions and get best practices for deploying and managing the latest technologies • Provide live Webcasts or on-demand sessions in video or audio-only formats for “students”

  13. Website • Provides Users with Product Literature • Brochures • Bulletins • Case Studies (How Products Have Helped Out Businesses With IT) • Customer Success Stories • Data Sheets • Presentations • Press Coverage • Q & A Forum

  14. Products • Specialize In Many Products And Services • List of Products from A-Z • Examples: • Switches • Network Routers • Optical Networking • Interfaces And Modules • Universal Gateways And Access Servers • Provides Information On All Products

  15. Switches Cisco switches help maximize network value by providing optimal support for business requirements while delivering superior investment protection.

  16. Switches • Many Different Varieties For Different Applications • Examples: • ATM Switches • Blade Switches • LAN Switches • WAN Switches

  17. Network Routers • Provide Routers for Small, Midsized, and Large Businesses • Each Have Different Features To Meet the Requirements of Different Types of Businesses

  18. Network Routers • Provides Routers for Network Providers

  19. Optical Networking • Service providers can optimize networks by integrating intelligent optical transport, flexible bandwidth management and converged voice/video/data services • Fiber Optics

  20. Interfaces And Modules • Deploy data and voice capabilities in an integrated routing platform to help increase productivity, decrease costs, and lower the cost of ownership

  21. Interfaces And Modules • Variety of Interfaces And Modules • Transceiver Modules • Ethernet Switching Network Modules • Line Cards • Network Modules • Optical Services Modules • Voice Modules And Interface Cards

  22. Universal Gateways And Access Servers • Current market conditions enable service providers to increase revenue by offering wholesale Voice over Internet Protocol (VOIP) services

  23. Universal Gateways And Access Servers • Voice Over IP Solutions (VoIP) • ASP Termination Services • Dial Access Solution For Service Providers • National And International Transport Services • Prepaid And Postpaid Calling Card Services • Voicemail/Unified Messaging

  24. Questions • What is the “virtual close” system?

  25. Questions Short Answer: Why is Cisco.com so successful on the international market?

  26. Questions • Cisco was briefly the mot valuable company on Wall Street

  27. Questions Who uses Cisco.com? A) International Businesses B) Small Local Businesses C) Network Providers D) All Of The Above

  28. Questions What does VoIP stand for? A) Voice Internet Packaging B) Voice Over Internet Protocol C) Voice Interpreting Packages D) None Of The Above

  29. Questions • Another name for Cisco’s website is:

  30. References • Case Study- “Cisco Systems: Poster Child for the Digital Firm?” Managing the Digital Firm. • (2001, Mar 21). Behind the Tech Slump. The Economist Newspaper Ltd., 1. Retrieved October 11, 2006, from ProQuest database. • (2001, Mar 10). An Old-Fashioned Price War. The Economist Newspaper Ltd.,1. Retrieved October 11, 2006, from ProQuest database. • Morrissey, P., Boardmen B., Franklin, C., MacVittie, D., Molta, D. (2004, Oct 28). The State of Cisco. Network Computing, Vol. 15, pg. 68. Retrieved October 11, 2006, from ProQuest database. • Boyle, D. (2006). Cisco Systems, Inc. Better Investing, Vol. 55, 43. Retrieved October 15, 2006, from ProQuest database. • Tribble, S. (2006, Oct 5). Cisco Introducing Itself to Consumers: Campaign Aims to Improve Brand Recognition. Knight Ridder Tribune Business News, 1. Retrieved October 19, 2006, from ProQuest database. • Berinato, Scott. What Went Wrong at Cisco. 1 Aug. 2001 http://www.cio.com/archive/080101/cisco.html.

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