Cisco's Strategy in Recessionary Times
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Case Code: BSTR373 Case Length: 16 Pages Period: 2000-2010 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.400 Organization: Cisco Systems Inc. Industry: IT, Networking Equipments Countries: US Themes: Corporate Strategies |
Abstract Case Intro 1 Case Intro 2 Excerpts
"We are confident that our aggressive strategy of investing in the business during the downturn and our focus on innovation, operational excellence, and productivity are driving our momentum and growth in the market. We believe that we are extremely well-positioned - by geography, in our customer segments, and in our key product categories - as economies around the world continue to improve and our customers increase their technology investments."
- John Chambers, Chairman and CEO of Cisco, in February 2010.
"When you face an economic challenge, focus on what we can influence, and not over or under react to things we cannot. It's a question of living in the world as it is, not the way we want it to be"
- John Chambers, Chairman and CEO of Cisco, in July 2009.
Introduction
For the second quarter that ended on January 23, 2010, the US-based Cisco Systems Inc. (Cisco), the world's largest manufacturer of computer networking equipment, reported net revenues of US$ 9.815 billion and a net income of US$ 1.853 billion.
The results showed an improvement in the company's financial performance after four consecutive quarters of decline.
Commenting on the results, John Chambers (Chambers), Chairman and CEO of Cisco, said, "Our outstanding Q2 results exceeded our expectations and we believe they provide a clear indication that we are entering the second phase of the economic recovery. During the quarter, we saw dramatic across the board acceleration and sequential improvement in our business in almost all areas." (Refer to Exhibit I for the details of Cisco's quarterly financials). Analysts were of the view that Cisco's results showed that the economic recovery was underway, as growing demand for routers, switches, and other equipment, areas in which Cisco had a major presence, indicated that technology companies had begun upgrading networks.
According to Erik Suppiger, Analyst at the Signal Hill Group, "The results were very strong, better than we were looking for, and an incremental improvement from the last quarter when they noted their visibility into the second half of the fiscal year was limited and they didn't want to suggest a recovery was underway."....
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