Cisco

Cisco or Crisco?

Cisco, one of the largest companies in the world in terms of market cap, grew with the height of the dot-com boom in the 1990s. After the IT bubble had burst in 2001, Cisco’s value decreased tremendously. However, it still maintained one of American’ leading firm in the market. Therefore, there are strengths that should be studied and weaknesses that could become a great lesson

Acquisition is the most critical core competency of Cisco. It brought the company from a small IT hardware to the largest-market-share firm in this industry within one decade. With this strategy, it let Cisco acquire technology which responds to customer’s need instantly without heavily investing in R&D. Cisco therefore saves a great amount of money. Besides, a speedy answer to the market is able to gain reputation and trustworthiness from customers. For instance, Cisco were so confident to buy two companies that own the same technology but the latter one can respond to customer faster while the other one has to wait for years before launching. It means Cisco is willing to quickly react to the market by purchasing technology rather than to develop new technology by itself.

Other than acquisition strategy, Cisco tends to be more careful about the workers, company culture, and adaptation when considering a company. It is said by head of human resource that Cisco wants to acquire people, not the company. This is true thinking for IT industry because new technology developed will last at most 18 months. Thus the company needs people to create new one and develop others. Buying a new company for Cisco does not mean it wants to have more assets or because of its attractiveness. It just needs new people to generate money for it. Moreover, it also considers the blend of culture. Every time there is a merger, the acquisition team must make sure that newcomer’s culture ought to blend with Cisco’s so smoothly and quickly.

Another crucial thought of Cisco is that