Cisco Systems and China
Review of Key Issues and Plans for Future Growth
Prepared for John Chambers
Overview
Cisco Systems competitive position in China is threatened. While China's Information Technology market is among the fastest growing in the world today, Cisco's share of that market is shrinking. Cisco's Internet operating system is becoming dated and has been subject to outright piracy in China. The Chinese government is also attempting to manipulate standards for the country's Information Technology products so as to level the technological edge that many foreign companies have over domestic vendors. It is only with careful analysis and work that Cisco can continue to be the dominate player in the internet equipment providers market for many more years to come.
Key Issues
Losing market share in China/globally
Intellectual property theft is a primary concern
IOS is outdated
Losing technological edge consumer's like the latest and greatest
Reactive instead of proactive in creating new markets
Other Issues
Negative media coverage surrounding ability of Cisco products to censor the internet in China
Chinese government defines the market standards to help local firms
On-line systems are still predominately in English
Notes of auxiliary items
Declining margins
Five-forces Analysis of Chinese Market Place
Analysis of Key Issues
Simply put, the problem with being #1 at anything is it makes you a target for everyone else that wants to be #1. When you are at the top, the seemingly only direction is down. Continuing to do business based on how you got to be number one in the high tech marketplace is the surest way to not be number 1 for long.
Currently Cisco is losing market share in the Chinese market place bit by bit. The low end of the router and switch markets is already being gobbled up by others and they are setting their sites on the upper tiers of those markets as well. This point is best illustrated by the fact
Prepared for John Chambers
Overview
Cisco Systems competitive position in China is threatened. While China's Information Technology market is among the fastest growing in the world today, Cisco's share of that market is shrinking. Cisco's Internet operating system is becoming dated and has been subject to outright piracy in China. The Chinese government is also attempting to manipulate standards for the country's Information Technology products so as to level the technological edge that many foreign companies have over domestic vendors. It is only with careful analysis and work that Cisco can continue to be the dominate player in the internet equipment providers market for many more years to come.
Key Issues
Losing market share in China/globally
Intellectual property theft is a primary concern
IOS is outdated
Losing technological edge consumer's like the latest and greatest
Reactive instead of proactive in creating new markets
Other Issues
Negative media coverage surrounding ability of Cisco products to censor the internet in China
Chinese government defines the market standards to help local firms
On-line systems are still predominately in English
Notes of auxiliary items
Declining margins
Five-forces Analysis of Chinese Market Place
Analysis of Key Issues
Simply put, the problem with being #1 at anything is it makes you a target for everyone else that wants to be #1. When you are at the top, the seemingly only direction is down. Continuing to do business based on how you got to be number one in the high tech marketplace is the surest way to not be number 1 for long.
Currently Cisco is losing market share in the Chinese market place bit by bit. The low end of the router and switch markets is already being gobbled up by others and they are setting their sites on the upper tiers of those markets as well. This point is best illustrated by the fact