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Case Strategic management

Introduction

This case will be dealing with the overall consumer market situation of Cisco; the firm wants to tighten its grip on the consumer household segment but there are quite some issues involved, which are in the way of the firm’s success as far as this segment of the market is concerned. The company is no doubt the leader in the specified domain but the market share of the firm is slowly but steadily slipping away, and other firms are obviously getting benefited from this situation. This case will be dealing with the mentioned issue and hence the managers at Cisco need to take some tough and strategically well devised decisions in order to get out of this situation as long existence of this market situation has the potential to dent the overall performance and the market standing of Cisco; and being a market leader this is something which is detrimental for the future prospects of the firm. The managers at Cisco hence need to devise certain adept strategies in order to cope with this loss in the household or domestic segment; the strategic plan has to be made by keeping in mind the external and internal forces affecting the business

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of the firm.

Cisco Systems, Inc, California based multinational company, headquartered in San Jose is the one that has the lion’s share of networking and communications industry. The company started its business in 1984; the name “Cisco” was derived from the city name San Francisco. The computer networking industry was always Cisco’s target, and from day one it emphasized on the computer networking industry, this is evident from the fact that the first product that it introduced in the market was multiple-protocol router software. This is because Cisco adapted the product, innovated and presented it to the market; this is how it learned from the mistakes, made by its competitors. One of the basic reasons for the rapid growth of Cisco includes its immaculate strength of adaptability to the new technologies. Cisco has been serving mainly in three market segments namely the big corporations, SMEs and the consumer market; due to the implementation of some immaculate strategies the company has been leading all the three mentioned sectors for the past many years with no competitor even near to its standing. This case is based on the problems which the firm faced in the starting of the 21st century and thus all the decisions has to be taken by keeping in mind the variables present at that time. All the names and characters used in this case are purely fictitious hence any resemblance drawn under the light of this work will be false. On the other hand all the facts and figures used in the below written case are drawn from real sources in order to give the case a more realistic and interesting touch.

The Case

David Scott is the Marketing Executive at Cisco Systems, Inc; he is working at the headquarters of the world’s biggest networking and communications technology firm and is deployed at the headquarters of the firm in San Jose, California. Cisco caters to mainly three segments of the market; large sized firms, small to medium business enterprises and household industry. David’s job is to look after the household segment of the market as far as Cisco is concerned; so that the firm can do well in this segment of the market. Since a couple of years Cisco is facing a decline in the market share in this segment of the industry; this trend has been observed by approximately all the managers at Cisco. In the beginning the managers did not really concentrated on this issue as the drop in the market share was not very substantial; but after the passage of some months this decline in the market share started to increase and hence it become a concern for the management of the firm. The management obviously has the clue that something was not going well but the exact cause of this declining share was not so easy to be comprehended.

As known that domestic sector is the one which is more price sensitive in comparison to the other segments of the market so at the beginning when this issue emerged to the scene the managers at the Cisco decreased the prices of the offerings to some extent but somehow desired results were not attained by this move of Cisco. This was the time when the issue really became important for the top management of the firm as the market share was declining at some considerable pace and this was something which started to hurt the overall business of the firm. As the firm was a market leader then also in all the three above mentioned domains so it was not at all suitable for the reputation of the firm as well because this declining market share had the potential to dent the whole market status of Cisco. This resulted in an alarming situation within the ranks of the firm and thus the top management decided to solve this growing issue on prior basis.

An internal investigation committee was formed by the top managers of the company which was assigned the task to analyze the real causes behind this cutback in the market share of the household industry; in addition to this the committee was also assigned the task to delve all the internal and external forces affecting the business of the firm, so that whatever strategy is devised has wider implications. David Scott was appointed the head of the committee, the committee comprised of 5 members in totality; the final target set for the committee was to work out such a strategy which can possibly increase the market share of the firm to the former point if not more than that. The steps suggested to be taken by the investigative group has to be such which can be implemented on immediate basis because more loss in this area was an insufferable aspect from the business’ point of view. Since Cisco is a multinational giant in its respective field, so all the options are open to be taken by the company in its battle with this emerging issue. Some of the key areas which were focused by the committee and the major findings are compiled under the following headings:

Attitude of the Workforce:

Attitude of Middle Management:

Top Management’s Approach:

Competitive Forces:

Consumers’ Overall Behavior:

Market Situation:

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