Cisco began its acquisition spree in 1993 with the purchase of Crescendo Communications Inc. (Cisco, 1993). The purpose of this acquisition was to acquire a product that Cisco's customers wanted, but that Cisco did not at the time provide. Over the rest of the 1990s, Cisco focused on that type of expansion, totaling 71 acquisitions and a massive growth in the size of the company both in terms of revenue and employees (Ibid).
The company was driven to make these acquisitions because it wanted to serve its major customers better. Cisco was selling to firms like Ford and Boeing, and it was under pressure to add new products to its lineup in order to meet their needs. Acquiring companies that already had those products was seen by Cisco management as the quickest way to meet this market need to hold competitors at bay. The initial acquisitions were made in this ad hoc fashion, as needed, without any coherent plan.
As acquisitions were clearly becoming a major part of the company's strategy, Cisco sought to develop a set of acquisition criteria to guide the acquisition process in a more strategic manner. The company built the strategy around the need for speed -- once a target was identified, Cisco wanted to buy it and begin the integration process quickly in order to minimize the risk to the company that was associated with a long integration process and slower response time to customer needs.
Q2. There were five key elements to the acquisition strategy, according to Singh and Chaudhuri (2008). The first element was that "the target and Cisco share a compatible vision of the future from both an industry and product perspective." This is important because Cisco values a rapid integration process for new acquisitions. If there are major issues with respect to vision, then this integration process will not be possible.
The second element is "The acquisition will produce a quick win for Cisco shareholders, preferably within 12 months of purchase." This falls under the 'obvious' category because no company wants to make acquisitions that are detrimental to its own interests. The key here is that Cisco sees this element as orienting it towards acquiring companies for which it has an immediate use or need. The Crescendo acquisition is...
Cisco has "bought 36 companies, including WebEx, a Web meeting specialist, for $3.2 billion…Cisco also picked up PostPath, a maker of e-mail software, and Jabber, a leader in corporate instant messaging" (Vance 2008). At present, unified communications is a small part of Cisco's annual revenue, but one it intends to grow. Another ambitious venture it intends to embark upon within the next few months is its introduction of a computer
Cisco Systems Culture Organizational Goals for Recruiting and Retaining Employees Cisco is a company that has a high rate of retention on its employees. According to Yves Lermusiaux, in his Recruiting at Cisco, the company's highest turnover rate in the 90s was 7.3%. In 1999, it only has 6.3% of turnovers. Randall Birkwood, Cisco's Director of Employment, states the following formulas with regards to retaining employees (Lermusiaux, 2000). The right culture for Cisco's
Cisco Systems: Firm Strategy and Internal Strengths. Cisco Systems, the self-proclaimed "worldwide leader in networking for the Internet," has dominated similar firms in its industry. As Wall-Streets' beloved stock and an essential stock in any investor's portfolio, with over 35,566 employees worldwide and boasting revenues totaling 22.2 billion in the previous fiscal year the company aims to ensure that networks both public and private operate with maximum performance, security, and flexibility. As
Strategic Business Unit of Publicly Traded Organization The objective of this study is to select any strategic business unit from a publicly traded multi-national corporation and to analyze the overall competitive environment including market conditions, evaluate the current growth and new business strategies, along with implications, analyze the organization's primary business model, evaluate the organization's competencies and resources, evaluate the leveraging of growth strategies through partnerships and alliances and identify future
Cisco Problem Identification Cisco is a well managed company that has successfully maneuvered past downturns in the company through a management structure that encourage teamwork. Although the teamwork model has been successful, it took a great deal of time form many in the company to adapt to the new structure including the changes in the compensation model which is now heavily based on meeting organizational goals through teamwork. At the current time
The Cisco Board of Directors had to vote and approve of the plan. ERP installations are not just a large it project. They are instead a complete re-examining of the company's business model and a re-defining of interprocess communication and the defining of process conduits between systems. In short, Cisco completely re-architected the core business processes that their company was based on, down to the Bill of Materials (BOM)
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