CISCO Case Study
Cisco Value Chain Model
One of the important tools used in analyzing the internal environment of an organization is value chain analysis. Weiler and Schemel (2003, p. 3) define the value chain analysis model as an organizational approach that explains business activities based on the activities’ economic worth to a customer. Each operation or activity is analyzed to establish to what extent it adds value or worth that gives the organization a competitive edge. An operation is of value if it significantly contributes to the realization of organizational goals.
A value chain analysis of Cisco operations shows that its operations are well-tailored and contribute to customer delight. For each operation in Cisco, customers’ interest can be discerned at its core. This has been demonstrated by the value of the services that Cisco renders to its customers; especially the small, and medium business entrepreneurs. Cisco provides reliable internet services to consumers in their homesteads, schools, and business premises.
Further operations by Cisco protect against online threats, by providing firewall and other software, which helps to protect against internet threats. To business organizations, Cisco provides information technology solutions that provide a competitive edge. It further provides advice to managers on how to develop an IT-driven strategic plan that drives organizations to great heights.
Cisco’s value chains aim at meeting the needs of the consumers by developing consumer tailored products and services. Consumers’ requirements are analyzed after carrying out adequate market surveys. In addition to this, Cisco has ensured consumers get their product in real-time or near real-time through keeping consumers up to date on new developments. The new products are supplied swiftly through Cisco’s well-choreographed distribution channels. Conclusively, a value chain analysis of Cisco’s operations shows that value has been effectively embedded in all products and processes that deliver products to the consumers.
One of the most commonly used tools in analyzing the internal and external environment of an organization is the SWOT analysis. This tool is very instrumental in measuring organizations standing about factors within their environment. SWOT is an acronym for Strength, Weakness, Opportunities, and Threats. From the case study provided, Cisco’s SWOT analysis reveals the following.
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Cisco’s SWOT analysis.
Knowledge Management Systems
Knowledge Management System (KMS) is an IT-based structure for administering information within the organization (Maier, 2007, p. 22). KMS provides employees easy access and use of the organization’s information and solution in dealing with particular challenges in the course of their operations. Cisco has an elaborate knowledge management system, which is a great asset. With this well functioning knowledge management system, the organization has been able to streamline its operations as well as improve efficiency.
At Cisco, knowledge workers perform a critical role in assessing and evaluating the market status. The knowledge workers compile information and help the organization towards designing new products for specific market niches. Apart from knowledge management being instrumental in designing new products, knowledge managers help in monitoring market trends. The knowledge established by knowledge managers helps Cisco managers to evaluate the prospects of mergers, collaborations, and acquisition beforehand.
Knowledge management, therefore, comes in handy when forecasting the future or establishing in what direction the organization is to move. Knowledge managers at Cisco are very instrumental and inform the business strategies, actively participate in implementing them and take part in the monitoring and evaluation of business processes.
Emerging Mobile Technologies
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A table showing emerging mobile technologies by Cisco.
Cisco is driving information technology development in the whole world. The technologies in the table above the only point to a more exciting future. With technological developments, future networking will be enhanced and made easier and most companies will be able to use internet platforms n as a competitive tool. Since the internet provides adequate information, firms will be able to meet consumer needs conveniently. It is also evident that browsing will be made easier by the integration of voice, video, and data in a single IP address.
Cisco is a leading IP based network provider and will continue being successful in the future. The secret behind Cisco’s dominance has been its ability to forecast the future market situation successfully. This capacity, i.e. capacity to anticipate the future, helps the organization to prepare in advance for future market changes; preparedness and creative response to changes provide a competitive advantage to Cisco. In addition to this, Cisco knowledge managers’ are well informed and utilize all the available opportunities by designing superior products to those of their competitors.
To augment the possibility of a bright future, Cisco has been acquiring other firms to expand its product line. Since 1993, Cisco has acquired more than 120 firms, and should the same trend continue, the future of Cisco is promising. By acquiring other firms, Cisco has diversified its product range. Diversification makes it better placed to overcome loss or deal with risks related to having one product line. Cisco tends to review its product regularly to ensure that customers’ needs are met.
Moreover, by collaborating with companies like Microsoft, Cisco derives an added advantage and can strengthen its brand name and consequently its brand position. Since Microsoft is a giant company with an international reputation, forging this collaboration allows Cisco to enjoy increased sales by selling some of its products under the Microsoft umbrella. Such collaboration not only facilitates sales increase, but it also ensures the sharing of information and skills for the benefit of the two companies. Troy (1995, p.142) emphasizes the importance of collaboration by arguing that collaboration is far much better than the competition because formerly “competing firms” join forces in production.
Cisco is an innovative company that designs a new product according to consumers’ needs. Continuous improvement and generation of customized products enhance customer loyalty. Through the market survey, Cisco knowledge managers identify market needs and therefore embark on fulfilling them. Poser (2003, p.107) asserts that innovation is a tool that locks competitors from entering the market. With the current trend, Cisco has a bright future; will continue holding the number one position as the world’s best information technological producer.
The other stronghold of Cisco is its ability to diversify and launch branches in different countries. The recent penetration of Cisco in India and China shows the determination of the company to tap into the global potential. Despite stiff competition from Asian IT Companies, Cisco is ready to rival them in the vast Asian market. However, managers at Cisco must relentlessly guide the company to retain existing customers amid rapid expansion.
Finally, Cisco’s focus on enhancing its brand salience makes the organization’s reputation to grow. Enz (2010, p.516) echoes support for brand development rather than using price as the only tool for competition. She argues that business success depends upon the ability of business people to develop something proprietary. Business proprietary advantage forms a strong base for competition in all forms of transactions. To this end, Cisco has done well by developing its brand and investing in innovation to develop superior products thus growing its reputation.
Role of Critical Success Factors (CSF)
The critical success factors are the key components for every organization to realize its mission and goals effectively. Every organization or firm must align its critical activities and integrate them with the organization’s strategic plan. By doing this, the organization streamlines its operations by having a single focal point. To make CSF a success, Chief Knowledge Officers (CKOs) have the sole obligation to identify and formulate specific factors that inform organizational practice or operations.
With a well-structured CFS, every firm positions itself to beat off competition from its rivals. However, failure to grasp the key elements in the CFS formulation reduces the organization’s cutting edge, and chances of success become extremely slim.
Critical Success Factors form the basis of developing the Decision Support System (DSS) of every firm. Since the DSS helps management in controlling the operations and planning in the organization, assimilating the critical success factors enhances decision making as well as improving managers’ judgmental abilities. In addition to this, the formulation of a good DSS not only helps management in decision-making but also in anticipating the future market trends.
Due to DSS’s ability to project into the future, the management prepares adequately for future market changes. Since the market experiences several variations, managers are left with no option but to prepare to counter the eminent deviations in future developments. The most volatile factors in every market are demand, tastes, and preferences. Other factors such as price changes and the behavior of competitors are also worth noting. By having specific Critical Success factors intertwined in the DSS, the organization determines what should be done in case eventualities arise.
Adopting and modeling new IT systems is a critical success factor for Cisco. Secondly, success at Cisco is dependent on the extent to which information is applied in reengineering the firm’s operations. The term reengineering means restructuring the way operations are executed to better sustain the organization’s missions and objectives and decrease costs. Reengineering commences with a high-level appraisal of the organization’s Critical Success factors, Mission, customers want, and other premeditated goals.
The adoption of the new IT project involves redefining the organization’s mission and the Critical success factors to attain the world-class competitor’s characteristics. The essence of this approach is that it rejuvenates the organization’s operations, stimulates productivity, and promotes competitive advantage development. Furthermore, the organization not only benefits from improved decision-making but also enjoys vibrant and streamlined production processes.
Digital Identity Theft
The Chief Knowledge Officer, Mr. Levy Vincent, is enraged by the increase in digital identity theft that has caused revenues from E-commerce to decline in the recent past. Due to this, I was sent to a seminar on digital identity theft. In the seminar, it was pointed out that hackers who identify the authentication of the users’ credit card, visa card, and other electronic means of payment caused digital theft.
The enormity of the crime has caused alarm worldwide. E-commerce revenues are on the decline while consumers are coy of purchasing online. As this fear intensifies, drastic measures need to be put in place to curb the spread of identity theft. However, efforts such as encrypting authentication have born little results if any, therefore, more reliable methods should be adopted to secure consumers from hackers.
Studies are underway to develop safe authentication means to bar hackers from conniving passwords and other authentication. Developing biological identification systems has positive prospects, currently, scientists are finalizing on iris scanning and hand printing. The two methods will only allow the owner of the card to carry out transactions since iris and handprints are unique for each individual. Moreover, the latest development has brought forth voice-printing detectors; these methods are believed to bring a lasting solution to digital identity theft.
The first logical step in a strategic process is understanding the current status or where an organization is. The business environment of an organization can be divided into internal, immediate, and external factors. The internal environment consists of factors such as organizational culture, organizational structure, and organizational resources. Internal capacity is critical in determining how an organization interacts with the external environment.
An organization’s culture defines the norms, values, and beliefs that inform operations or way of acting. The factors in the immediate environment of an organization include competitors, suppliers, and customers. In the external environment are macro-economic factors that determine business operations. It is from understanding the business environment that a company can identify its purpose or mission.
The process of analyzing a business environment requires looking at different facets. To do a proper business analysis, one would have to employ such tools as SWOT analysis, Five Forces model by Porter, Global model or PESTEL, Value chain analysis, among others. These tools help in the analysis of both the internal and external environment to establish how factors in either environment are affecting or are likely to affect the organization.
From the internal environment, the strengths and weaknesses of the organization are identified to define how best to restructure the organization. From factors in the external environment, industry analysis is done enabling the organization to identify opportunities and like threats to its operations.
PESTEL is an important tool in analyzing the external environment of an organization. The PESTEL analysis is a valuable tool for assessing market growth or decline of any firm while determining the potential opportunities and threats of the business. PESTEL is an acronym for Political, Economical, Social, Technical, Environmental, and Legal analysis (Bensoussan & Fleisher, 2008). When using a PESTEL Model, one has to look into all the macroeconomic factors that affect an organization.
Dealing with online theft would require a Global model analysis. Given, online crime depends largely on macro-economic factors that inform online operations, a PESTEL analysis can help in identifying issues to be tackled when it comes to interventions. A thorough evaluation of the PESTEL components would not only help to prevent theft but also in developing reliable systems to operate in such an environment.
Understanding the political environment of every business ensures it to operate within the set regulations. Also, the organization understands trade policies, registration on home and foreign market, ecological and environmental factors within the business. Marx (2006, p.88) asserts that political understanding ensures compliance with regulatory bodies and focus on future registration changes. Understanding the political environment helps the organization in a better position to pursue redress against hackers and other defaulters thereby mitigating loss from theft and other malpractices.
Turner (2010, p. 56) underlines the importance of evaluating and understanding the economical factors, especially for online marketing. This is necessitated by the need to understand the home and international business trends, taxation and tariffs applicable and changes thereof. It is also important for any firm to understand the seasons for various products so that optimal decisions should be made to either increase production or reduce production (Turner, 2010, p. 66).
It is also important to pinpoint the need to understand the end-users’ drivers and their reactions to changes in specific products and services taxes. Moreover, it is worth noting that every organization needs to remain updated on issues affecting international markets to minimize the chances of theft. For example, an organization, which has borrowed a great deal, will need to maintain a close look at the economical factors (especially interest rates) (Turner, 2010, p. 54).
It is important to social factors, which affect the organization to maintain competitiveness. The main social factors that influence the business are demographic trends (population growth and age), consumers’ lifestyles, and consumers buying patterns. Fortenberry Jr and Fortenberry (2010, p. 181) added that emphasis should be made to understand the brand image of the company from the community and the media perceptions.
Therefore, a regular survey needs to be carried out to assess social changes to determine the changes to be adopted in production and in the choice of advertisement to be adopted. For example, consumer and Business 2 Business companies are mainly affected by changes in social factors.
On the other hand, all business needs to keep abreast on the technical changes. Since technology is dynamic, E-commerce firms as well as conventional ones need to monitor current technological changes such as competing for technological developments and appraise in what way they are a threat or opportunity. In addition to this, organizations need to invest in surveys to determine consumers’ purchasing mechanism.
It is also critical to adopt global communication, which promotes innovation and new product development due to higher access to new ideas. To ensure all these, a vibrant and well-trained technical team should be put in place; else, the organization will find it difficult to compete with other firms. However, adequate security measures should be adopted to minimize the chances of identity and other online thefts such as phishing and hacking (Marx, 2006, p.88).
The analysis of information acquired shows that most consumers come from the Western region, which boasts of 211 consumers, followed by the southern region, which has 106 customers. The eastern region has 101 customers while the northern region has the least number of customers i.e. 91.
Credit card payment is the most favored mode of payment. From the findings, 63% of the total number of consumers surveyed use credit payment while PayPal follows with 37%. From this data, it is clear that most people prefer using credit cards rather than pay pal. The above information is presented in the pie chart below.
There are substantial differences in the average purchases across the four regions. The results of the analysis are shown in the bar graph below.
The southern region has the highest mean purchases at £46.85, the eastern region has an average of £38.09, while the western and Northern regions follow with £36.43 and £35.88 respectively.
Analysis of data accessed also reveals that most people prefer to shop at midnight (0000 hours) with a frequency of 26 followed by 0001hours. This shows that most customers prefer purchasing around midnight. However, no relationship exists between region, type of product purchased, and the average sales price.
Finally, it is worth underscoring the importance of using OLAP in carrying out market research. As observed above, OLAP has provided precise information on the consumers purchasing trends in various regions. Based on the outcome of the survey, the organization gets quantitative information and thus it can make informed decisions on where to invest, the commodity to sell, and the optimal time of doing promotions.
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