Cisco Systems Inc. Business Strategies

By | June 25, 10

Cisco Systems Inc. Business Strategies

Building a business from scratch and in less than three decades it is worth hundreds of billions of dollars is no mean feat; it takes generating effective strategies and executing them. It takes taking the right decisions at the right time. Here are strategies that have made Cisco Systems Inc. a multibillion dollar company from a little start-up. You can adapt them to your business too.

Great Business Ideas Can Be Born From What You Are Doing Presently

One of the ways to generate great business ideas is from observing trends, changes, challenges, and needs in your industry or where you are working.

The founding of Cisco Systems Inc. was born out of Leonard Bosack discovering the need for institutions and businesses to link up their computer systems in separate locations with themselves. He was able to know this need existed because he worked in an environment where computers in different departments shared data, and having them therefore in a network would enhance organizational efficiency.

Identify Your Target Customers And Reach Them

A major key to business success is to know exactly who your business is serving, and where they are. Then you will need to come up with an effective strategy to reach them with your product.

From inception, Cisco knew exactly who their customers were: scientists and engineers who used TCP/IP protocols and UNIX-based computers in Universities, research centers, aerospace industry, government institutions, and corporations. It then devised a marketing strategy to reach them through ARPANET.

Make Your Product More Valuable

A sure way to move to the top of your industry is to make your product or service more superior than what competitors are offering.

By 1988, Cisco’s routers supported more protocols than all others in the market. This distinguished it from the pack.

Getting Into An Industry Early Is Key

The ability to recognize a fledgling industry with huge future profit potential, and get in early and take position will certain enable your business to reap great profits when the industry gets matured.

Cisco’s strategy that has resulted more in the astronomical growth of its business over the years has been its ability to pick emerging networking businesses that would spin huge profits in future, and quickly get into them.

Allowing Professional Managers To Run Your Business

To move your business to a higher level from being a start-up, you need to bring in professional business managers, than continuing allowing friends or family members with little business management and marketing expertise to manage the business. Although this may hurt your friends or relations when asked to go, it is however to the interest of the business’ survival and growth to replace them with more qualified and experience managers. And it is a decision you have to be brave to take.

Cisco System Inc. started experiencing serious growth when its management was changed, and headed Morgridge.

Flexibility In Business Operation Is Vital For Survival

Businesses that will remain relevant in the face of technological change sweeping through its industry will be those which can easily and quickly adjust its system or product line to accommodate the change. It is therefore important to build flexibility into your business to be able to accommodate any change that may occur in your industry.

In the early 1990s, there were several new communications technologies, including ATM, introduced into the market. But Cisco System’s business was not adversely hit, as the company was flexible enough to be able to quickly improve on its routers to handle the newly invented protocols.

Expanding Your Market

A lot of businesses record low sales because they are not exploring opportunities to sell their products in foreign markets. The market in your geographical area may already be saturated, while ironically, it is up for the taking in other lands. You need to take opportunity of the fact that the world has become a global village by expanding your business outside of your shores.

Sales from foreign markets account for substantial part of Cisco’s total sales. By 1994, Cisco’s sales from foreign markets was 41.9 percent of its total sales.

Read Cisco Systems’ Success Story here.



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