Cisco Systems
| Case Analysis – CISCO Systems | | | | |
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1. How have Cisco's channels evolved in the last 10 - 15 years? Why have they evolved that way? What does the future look like?
Cisco is the leader in the switches and router market. Cisco was described as a classic start-up fairy tale. Indirect sales and distribution through resellers was responsible for the small percentage of products delivered in the early 1990s. Cisco model was praised as a successful indirect sales and channel strategy. In 1995, Chambers (CEO) took the helm and the company played a leading role in the internet revolution. Market capitalization exceeded $500 billion in 2000. Cisco’s sales had crossed $18 billion and it boasted relationship with 600 VARs worldwide. The company’s sale took a hit after the telecom and dot-com crash in 2001. The company reported $1 billion loss in the same year. Due to the disaffection and dissatisfaction among the resellers the company was forced to review and revamp the go-to market strategy.
Routers and Switches are the key components of Cisco. Its explosive growth and the growth of Internet were inextricably intertwined. Its router technology was a crucial component of the rapid internet buildout in the 1990s. This success was achieved from basic high-end connectivity, multilayer intelligent service switching solutions.
The company has to evolve the goto market strategy and implement the customized pyramid so that new strategy doesn’t create inter-channel conflict determines the future of the company
2. What grade would you give Cisco for managing that evolution? Good or bad? Why?
I would provide an A grade to the firm for managing the evolution. It was good implementation, when started the company sold whoever had an application on the technology however with the market exploded in the 1990s, the company relied on channel partners who added unique value, cost effectively. The company followed divide-and-grow policy, doubling the
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1. How have Cisco's channels evolved in the last 10 - 15 years? Why have they evolved that way? What does the future look like?
Cisco is the leader in the switches and router market. Cisco was described as a classic start-up fairy tale. Indirect sales and distribution through resellers was responsible for the small percentage of products delivered in the early 1990s. Cisco model was praised as a successful indirect sales and channel strategy. In 1995, Chambers (CEO) took the helm and the company played a leading role in the internet revolution. Market capitalization exceeded $500 billion in 2000. Cisco’s sales had crossed $18 billion and it boasted relationship with 600 VARs worldwide. The company’s sale took a hit after the telecom and dot-com crash in 2001. The company reported $1 billion loss in the same year. Due to the disaffection and dissatisfaction among the resellers the company was forced to review and revamp the go-to market strategy.
Routers and Switches are the key components of Cisco. Its explosive growth and the growth of Internet were inextricably intertwined. Its router technology was a crucial component of the rapid internet buildout in the 1990s. This success was achieved from basic high-end connectivity, multilayer intelligent service switching solutions.
The company has to evolve the goto market strategy and implement the customized pyramid so that new strategy doesn’t create inter-channel conflict determines the future of the company
2. What grade would you give Cisco for managing that evolution? Good or bad? Why?
I would provide an A grade to the firm for managing the evolution. It was good implementation, when started the company sold whoever had an application on the technology however with the market exploded in the 1990s, the company relied on channel partners who added unique value, cost effectively. The company followed divide-and-grow policy, doubling the