CISCO S

YSTE

MS INC.

PART

ONE:

INTR

ODUCTION A

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EXTE

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CISCO SYSTEMS - INTRODUCTION

• Founded in 1984

• Incorporated on December 10, 1984

• Have 72,935 employees

• Surpassed 39 billion in revenue in 2008

• Corporate headquarters located in San Jose, California

• 32 factories worldwide, 30 of them are outsourced.

• Spends nearly $5.3 billion a year in R&D

CISCO SYSTEMS – INTRO – RECENT EVENTS• Video Easier to Create, Consume, Search and Share Across the

Enterprise

• Cisco Demonstrates Leadership in Virtualized, Scalable, Cloud-

Ready Data Centers with Customer and Technology Milestones

• Cisco Connects Businesses to Consumers via Video

NETWORKING AND COMMUNICATION

• Industry: Networking and Communication supplies and services

• Industry Consolidation – Few competitors in their main product area

• In 2006 they had 70% of the share of its core router and switch market.

Juniper Networks and Hewlitt-Packard selected as benchmarks.Cisco's Chambers ProblemCisco Competition

CISCO’S MISSION STATEMENT

Shape the future of the Internet by creating unprecedented

value and opportunity for our customers, employees, investors,

and ecosystem partners.

Vision

Changing the Way We Work, Live, Play, and Learn.

Cisco has a very bland and basic mission statement that only ranks as an “ok” (5) on the MVV evaluation.

EXTE

RNAL ANALY

SIS

•R E M O T E ( S O C I E T A L ) E N V I R O N M E N T .

•I N D U S T R Y ( T A S K ) E N V I R O N M E N T

•A S S E S S M E N T O F C O M P E T I T I O N

•M O S T C R U C I A L T H R E A T S A N D O P P O R T U N I T I E S , W I T H S C O R E .

REMOTE (SOCIETAL) ENVIRONMENT

O P P O R T U N I T I E S

• Innovation

• Product and services

expansion

• Market of Airline Industry

• Reusing existing Cisco

gear to act as mobile POPs

• Cloud Computing

T H R E A T S

• Economic slowdown

• Price wars

• Product substitution

• Margin erosion

• Consolidation trend

• Consumer loyalty

INDUSTRY/TASK ENVIRONMENT

O P P O R T U N I T I E S

• Low supplier power, Cisco has taken control of its supply chain

• Router and switch market share discourages new entrants

• Switching costs are high(reduce buyer power)

• Acquisitions removes some threat of startup success

• Growth in the consumer market and cloud computing

T H R E A T S

• Flip Video – bargaining power of buyers.

• MSFT – Threat of new entrant (bundle unified communications software)

• GOOG – Threat of new entrant (desktop video conferencing market)

• Vyatta – Substitute (open source hardware)

• Asterisk – Substitute (open source VoIP)

ASSESSMENT OF COMPETITION

O P P O R T U N I T I E S

• Increase competition in

bottom layer switch market

• Smart Grid Technology

• Asian Market – Tata

Communications

• Server growth – up 700%

• Cloud-centric software

T H R E A T S

• Mirrorless SLRs are the response to Flip video

• Juniper announced data center

• Juniper entered into a partnership with IBM to handle network connectivity for the latter’s cloud computing

• 3COM emerging into markets like China

• Juniper’s high-end switches (EX) and Junos OS

• HP’s low cost switches

SUMMARY – MOST CRUCIAL OPPORTUNITIES AND THREATS

O P P O R T U N I T I E S

• Increase competition in bottom

layer switch market (9)

• Server growth (10)

• Cloud Computing (10)

• Smart Grid Technology (10)

• Asian Market (8)

T H R E A T S

• HP’s low cost switches (10)

• MSFT – Threat of new entrant

(bundle unified communications

software) (7)

• Consolidation trend (7)

• Juniper/IBM (9)

• Juniper’s data center (10)

Avg. ~ 47/5 = 9.4 Avg. ~ 43/5 = 8.6

O-T ~ 9.4 – 8.6 = .8

PART

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NET INCOME TRENDS -CSCO & BENCHMARKS

2005 2006 2007 2008 2009 2010

$(2,000.00)

$-

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

CiscoHPJuniper

Net

Inco

me

(in M

illio

ns)

Company Name 2005 2006 2007 2008 2009 2010

CISCO SYSTEMS INC $ 5,741.00 $ 5,580.00 $ 7,333.00 $ 8,052.00 $ 6,134.00 $ 7,767.00

HEWLETT-PACKARD CO $ 2,398.00 $ 6,198.00 $ 7,264.00 $ 8,329.00 $ 7,660.00 $ 8,761.00

JUNIPER NETWORKS INC $ 354.03 $(1,001.44) $ 360.83 $ 511.75 $ 117.00 $ 618.40

CSCO QUARTERLY EARNINGS VS. CONSENSUS ESTIMATES

Earnings History 10-Apr 10-Jul 10-Oct 11-Jan

EPS Est 0.39 0.42 0.4 0.35

EPS Actual 0.42 0.43 0.42 0.37

Difference 0.03 0.01 0.02 0.02

Surprise % 7.70% 2.40% 5.00% 5.70%

1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

EstimateActualDifference

REVENUE BY PRODUCT CATEGORY AND SERVICE

Routers Switches New Products Other Total Product Service0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Q1Q2Q3Q4

KEY INCOME STATEMENT DATA FY2010HP Cisco Juniper

Sales $ 126,033.00 $ 40,040.00 $ 4,093.27

Cost of Sales $ 92,753.00 $ 12,858.00 $ 1,200.46

Pretax Income $ 11,083.00 $ 9,415.00 $ 778.15

Basic EPS - Exclud Extra Items $ 3.78 $ 1.36 $ 1.18

Diluted EPS - Exclud Extra Items $ 3.69 $ 1.33 $ 1.15

Net Income (Loss) $ 8,761.00 $ 7,767.00 $ 618.40

KEY BALANCE SHEET DATA FY2010  HP Cisco Juniper

Cash $ 10,934.00 $ 39,861.00 $ 2,286.40

Total Current Assets $ 54,184.00 $ 51,421.00 $ 3,214.37

PP&E $ 11,763.00 $ 3,941.00 $ 493.88

Total Assets $ 124,503.00 $ 81,130.00 $ 8,467.85

Other Investments $ 4,191.00 $ 2,607.00 $ 535.18

Total Current Liabilities $ 49,403.00 $ 19,233.00 $ 1,471.98

Total Liabilities $ 83,722.00 $ 36,845.00 $ 1,859.05

Total Stockholders' Equity $ 40,449.00 $ 44,267.00 $ 6,608.80

CASH FLOW DATA FY2010  HP Cisco Juniper

Cash Flow 12mm $ 13,581.00 $ 10,064.00 $ 773.69

Dividends Paid - Cash $ 771.00 $ - $ -

Operating Activity $ 11,922.00 $ 10,173.00 $ 812.34

Investing Activity $ (11,359.00) $ (11,931.00) $ (532.75)

Financing Activity $ (2,913.00) $ 621.00 $ (72.42)

Change in Cash & Equiv $ (2,350.00) $ (1,137.00) $ 207.16

IMPORTANT FINANCIAL RATIOS FY2010  HP Cisco Juniper

Current Ratio 1.097 2.674 2.184

Quick Ratio 0.779 2.397 1.959

Net Profit Margin 6.951 19.398 15.108

Return on Assets 7.037 9.574 7.303

Return on Equity 21.659 17.546 9.357

Return on Investment 15.634 13.753 9.357

Financial Leverage 2.956 1.800 1.292

APPLYING ALTMAN’SBANKRUPTCY FORMULA

Z = 1.2*A + 1.4*B + 3.3*C + 0.6*D + 1.0*E, where;A = Working Capital / Total Assets (%)B = Retained Earnings / Total Assets (%)C = EBIT / Total Assets (%)D = Market Value of Equity / Total Liabilities (%), andE = Sales / Total Assets

“Scores below 1.81 indicate significant credit problems while scores above 3.0 indicate a healthy firm. Scores falling between 1.81 and 3.0 indicate question marks.”

2005 2006 2007 2008 2009 2010

Z Value 2.902 2.315 2.473 2.500 2.292 2.166

Z-VALUE

2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

3

3.5

Upper LimitZ ValueLower Limit

INDEX OF SUSTAINABLE GROWTH

Jul05 Jul06 Jul07 Jul08 Jul09 Jul100.000

0.050

0.100

0.150

0.200

0.250

0.300

0.350

0.400

0.450

0.500

g* score

g* = [P(1-D)(1+L)] / [T-P(1-D)(1+L)], whereP = (Net Profit before Tax / Net Sales) x 100D = Target dividends / Profit after TaxL = Total Liabilities / Net WorthT = (Total Assets / Net Sales) x 100

INVENTORY TURNOVER FY2010

HP Cisco Juniper0.000

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

Inve

ntor

y Tu

rnov

er

CREDIT RATINGS

Issuer Credit Rating Ratings Rating Date

Foreign Long-term A+ 10-Feb-06

Foreign Short-term A-1+ 31-Jan-11

Local Long-term A+ 10-Feb-06

Local Short-term A-1+ 31-Jan-11

March 9, 2011-Standard & Poor's Ratings Services said today that it assigned its 'A+' issue rating to San Jose, Calif.-based Cisco Systems Inc.'s (Cisco) three tranches of senior unsecured notes.

CISCO STOCK PRICE HISTORY

CSCO STOCK PRICE – 5 YEAR TREND

CSCO STOCK PRICE – 2 YEAR TREND

FINANCIAL SUCCESS STATEMENT

In fiscal 2010, we saw a solid return to balanced growth across

geographies, product and customer markets exemplified by Cisco

reaching over $40 billion in fiscal year revenue. We focused our

efforts on defining true innovation and operational excellence within

our company. And we improved our position as a strategic partner to

customers worldwide by showing how the network has become, in

our view, the most strategic asset in communications and

information technology (IT) today.

ANALYSIS

OF

MARKETING

POSIT

ION

CISCO LONG TERM TOTAL SALES FROM 2006-2010• 2006 = 23.38 Billion

• 2007 = 34.90 Billion

• 2008 = 39.60 Billion

• 2009 = 36.10 Billion

• 2010 = 40 Billion

CISCO LONG TERM QUARTERLY SALES FROM 2006-20102006 2008

Quarter 1: 6.50 Billion Quarter 1: 9.60 Billion

Quarter 2: 6.60 Billion Quarter 2: 9.60 Billion

Quarter 3: 7.30 Billion Quarter 3: 9.60 Billion

Quarter 4: 7.98 Billion Quarter 4: 10.40 Billion

2007 2009

Quarter 1: 8.20 Billion Quarter 1: 10.30 Billion

Quarter 2: 8.40 Billion Quarter 2: 9.1 Billion

Quarter 3: 8.90 Billion Quarter 3: 8.2 Billion

Quarter 4: 9.40 Billion Quarter 4: 8.5 Billion

CISCO LONG TERM QUARTERLY SALES FROM 2006-2010 CONT. 2010

Quarter 1: 9.00 Billion

Quarter 2: 9.80 Billion

Quarter 3: 10.40 Billion

Quarter 4: 10.80 Billion

SALES BY STRATEGIC BUSINESS UNITS IN QUARTER 1 AND 2 OF 2011• Strategic Business Units = divisions or groups of divisions composed

of independent product-market segments that are given primary responsibility and authority for the management of their own functional areas.

CISCO

Q1 IN MILLIONS Q2 IN MILLIONS

ROUTERS - $1,835 ROUTERS - $1,672

SWITCHES - $3,532 SWITCHES - $3,151

NEW PRODUCTS - $3,104 NEW PRODUCTS - $3,202

OTHER PRODUCTS - $229 OTHER PRODUCTS - $211

TOTAL PRODUCT – $8,700 TOTAL PRODUCT - $8,236

MARKET SHARE OF STOCKS

Company Name

Price

Change Change %

Market Cap

CSCO Cisco Systems, Inc.

17.46

+0.07 0.42% 96.63B

JNPR Juniper Networks, Inc.

39.49

-1.05 -2.59% 21.12B

HPQ Hewlett-Packard Company

41.53

-0.24 -0.56% 89.87B

ALU Alcatel- Lucent (ADR)

5.19 -0.07 -1.33% 12.03B

MSFT Microsoft Corporation

25.34

+0.01 0.05% 212.94B

MARKETING TACTICS

• Tactics = specific operating plans that detail how a strategy is to be implemented in terms of when and where it is to be put into action.

• Timing Tactics

Historically a first mover supported by being a first mover in technology. They specialize in routers, switches, wireless, security, optical networking, etc. Cisco is also considered a industry leader.

• Market Location Tactics: Offensive

Cisco has always been known to take a frontal assault because they are a market leader. They go head to head with its competition.

MARKETING TACTICS

• Market Location Tactics: Defensive

Cisco takes the path of raising structural barriers. They do this to block challenger’s logical avenues of attack.

Some factors of Porters they use are:

Offering a full line of products in every profitable market segment to close off any entry points.

Keep their items reasonably priced for their most popular products and services.

CISCO SUCCESS STATEMENT

• Cisco has had many success stories throughout the years which is a large part in being a industry leader.

• Customers drive our business strategies to achieving success and excellence in everything we do, and will continue to be our key focus for developing products and services that accelerate their capability to prosper in the Internet business.

CISCO SUCCESS STATEMENT CONT.

• An example of a success story is:

In 2001 the cost of direct DSL and ISDN access increased markedly. Cisco transitioned tens of thousands of teleworkers and remote office workers worldwide to remote access VPNs. To determine if additional capacity was needed, Cisco used Cisco NetFlow in conjunction with various open-source tools to characterize existing traffic and then extrapolate expected traffic. With this business intelligence, Cisco successfully transitioned 22,000 users to VPN in only three months.

MARKETING PROBLEMS

• The dominance in network switches that Cisco holds is waning.

• Hewlett-Packard has been particularly aggressive in the switching market since they have entered.

• Cisco’s video-conferencing system for living rooms has been a strange product to market.

• There is little market for such a product when consumers can video chat for free over the internet instead of paying $600 for the equipment and a $25 a month service fee.

ANALYSIS

OF

MANAGEMENT

POSIT

ION

CORPORATE MANAGEMENT TEAM

• Frank A. Calderoni

Executive Vice President, Chief Financial Officer

• John T. Chambers

Chairman and Chief Executive Officer

• Mark Chandler

Senior Vice President, Legal Services, General Counsel and Secretary

• Blair Christie

Chief Marketing Officer, Worldwide Government Affairs, Corporate Communications

• Wim Elfink

Executive Vice President, Cisco Services and Chief Globalization Officer

CORPORATE MANAGEMENT TEAM CONT.

• Robert W. Lloyd

Executive Vice President, Worldwide Operations

• Gary B. Moore

Executive Vice President, Chief Operating Officer

• Randy Pond

Executive Vice President, Operations, Processes and Systems

MANAGEMENT TEAM - DIVERSITY

• Board – 13 members, 2 internal

• 65 Executives

• 56 men

• 9 women

Executive Biographies

EXECUTIVE COMPENSATION

• Compensation Governance. The core of Cisco’s executive compensation continues to be pay for performance, and the framework includes the compensation governance features discussed below:

1. Provides shareholders with the opportunity to cast advisory votes on compensation

2. Have no employment or severance agreements, special benefits, supplemental executive retirement plans, perquisites, or tax equalization.

3. CEO compensated below targets and median of the peer group of three out of the last five years.

4. Compensation Committee is solely independent directors.

TOP FIVE – 2010 COMPENSATION & TENUREJohn Chambers – $18.9 million in 2010

Name and Principal Position Fiscal Year

Salary ($) (2)

Bonus ($) (3)

Stock Awards ($) (4)

Option Awards ($) (5)

Non-Equity Incentive Plan Compensation

($) (6)

All Other Compensation

($) (7) Total

($)

John T. Chambers Chairman and Chief Executive Officer

2008

2007 $375,000

$350,096

—

$3,500,000 $650,985

— $7,122,023

$7,126,514

$3,002,802

—

$9,087

$7,677

$11,159,897

$10,984,287 Frank A. Calderoni

Executive Vice President, Chief Financial Officer (1)

2008 $447,692

— $483,727

$1,340,621 $1,052,335

$71,090 $3,395,465

Dennis D. Powell Former Executive Vice President, Chief Financial Officer (1)

2008

2007 $401,635

$425,577

—

— $458,939

$392,116 $1,464,503

$2,018,450

$673,205

$1,607,614

$7,253

$9,000

$3,005,535

$4,452,757 Wim Elfrink

Executive Vice President, Cisco Services and Chief Globalization Officer

2008 $859,605 (8)

— $871,227

$2,566,075 $1,590,750 (9)

$1,732,050 (10) $7,619,707

Richard J. Justice Executive Vice President, Worldwide Operations and Business Development

2008

2007 $750,000

$451,154

—

— $871,227

$392,116 $2,706,400

$2,470,436

$1,484,700

$2,329,875

$113,771

$18,231

$5,926,098

$5,661,812

DIRECTION OF TOP MANAGEMENT TEAM

• Continue to seek to expand share of Cisco’s customers’

information technology spending.

• Focus on core networking capabilities while expanding into

product markets where the network as a platform is

increasing.

• Focusing primary attention include those related to the

increased role of virtualization/the cloud, video,

collaboration, and networked Web 2.0 technologies.

TOP MANAGEMENT PERFORMANCE INDICATORS

Q U A L I T A T I V E F A C T O R S

Strategic Direction (4) Implementing Strategy (5) Building Mgt. Team (4) Management Qual. (5) Succession (4) Labor Relations (4) Technology Leader (5) Board Relations (4) Investor Relations (5) Com./Gov Rel’ns (4)

Q U A N T I T A T I V E F A C T O R S

Return on Assets (5) Return on Investment

(4) Return on Equity (4) Return Meas. Trends (4) Cash Flow (4) Profit Growth (4) EPS (4) Dividend Payout (4) Stock Price (4) Total Return to SH (1)

Total = 44

Total = 38

MANAGEMENT ANALYSIS

• Chambers recently introduced collaborative decision making. 70%

of decisions made by groups.

• 20% of senior leaders have left since the switch

• 30 new businesses, 20 more to come

• Average Tenure – 11.5 years

PART

THREE

:

CURRENT

STRAT

EGIC

POSIT

ION

C U R R E N T C O R E C O M P E T E N C I E S D I S T I N C T I V E C O M P E T E N C I E S C O R P O R A T E - L E V E L S T R A T E G I E S

Short Term & Long-Term C O R E S B U L E V E L S T R A T E G I E S 5 C R I T I C A L P E R F O R M A N C E I N D I C A T O R S

CURRENT CORE COMPETENCIES

Hardware product development

Acquisitions - “Buy-the-startups” (Cisco's acquisition strategy is best-

in-world and we particularly look for acquisitions that capitalize on

market disruption through new technologies and new business

models.)

Collaboration Services

Network Flexibility/Scaling (data center/hardware/software capacities)

and virtualization

Strategic Alliances (AT&T, Dell, HP, Intel, IBM, Microsoft, Nokia, etc…)

DISTINCTIVE COMPETENCIES

Acquisitions

Smart-grid technology (form of routing or switching) as noted

by CEO John Chambers.

CURRENT LONG-TERM CORPORATE STRATEGIESStrategy: One Cisco

• Grow faster than the market

• Protect and extend product market leadership

• Innovate

CURRENT SHORT-TERM CORPORATE STRATEGIESInternal innovation - $5.3B+ spent on R&D annually

Acquisition – continued integration of Pari Networks, Inlet

technologies, and newScale, Inc.

Enter into new markets:

• Smart Grids

• Virtual healthcare

• Education

• Media solutions

• Sports and entertainment

MIS/INFORMATION AGE READINESS

• Incredible website

• Use the products they develop

• Recently upgraded their ERP to Oracle 11i

• Purchasing

• Data Storage

• Technical Support

About Cisco

BORDERLESS NETWORKS GROUP

• Comprised of Routers and Switches

• Increased their revenue by 33% from ‘09 to ’10

• Q2 ‘FY11 Sales down $132 million

• 70% of the market share

• Improve application velocity and enhance collaboration while

reducing branch IT operational expenses by up to 70 percent

16%

34%

24%

7%

19%

Routers

Switches

Advanced Technologies

Others

Services

COLLABORATION GROUP

• Webex and TelePresence and other VoIP technologies

• 90 percent of frequent users save at least two hours of work time

per week through video collaboration

• It is possible to achieve 100% ROI in 5 years and payback periods of

21-40 months

• Reduction of 21 percent in corporate travel spending

CLOUD COMPUTING GROUPDATA CENTER AND VIRTUALIZATION

• Energy efficiency

• Reduce energy costs

• Optimize use of space, power, and cooling infrastructure

• Infrastructure Consolidation

• Business Continuance

• Workforce Productivity

Cloud Computing Explained

CALIFORNIA TELEMEDICINE PILOT PROJECT

• Contributing $10 million of product, services and support

• Care-at-a-distance technology that combines video, audio and

medical information

• Patients will be able to view the medical exam

• Easiness of meeting

IDENTIFICATION OF SBU LEVEL STRATEGIES AND TACTICS• As mentioned earlier Cisco’s strongest market is with their

switches.

• The revenue has declined 7% in the latest quarter because they are under attack by competitors such as HP.

• Cisco’s consumer products such as Linsksys routers, Flip video cameras, etc. don’t stand a chance against Apple.

• They need to market their products more efficiently and spend more money on marketing popular products than products that serve a small niche market.

• Cisco just unveiled a new home-entertainment system in January to hopefully “reinvent the entire TV experience.”

CORPORATE SOCIAL RESPONSIBILITYKEY PERFORMANCE INDICATORS

In the Workplace

Employee Satisfaction

% of employees who agreed with 7 statements about Cisco as a place to work

200581%

200685%

200786%

Voluntary employee attrition

Total voluntary attrition as % of ending head count

4.6%

5.4% 6.9%

Health and safety

Number of nonfatal injuries and illnesses during fiscal year

129 107 93

CORPORATE SOCIAL RESPONSIBILITY KEY PERFORMANCE INDICATORS

Diversity In the workplace

Women Women as % of total employeesWomen as % of total VP positions

22%

13%

22%

14%

22.8%

15.12%

Ethnic Minorities (U.S. only)

Ethnic minorities as % of total employeesEthnic minorities as % of total VP positions

42%

17%

43%

17%

43%

15.51%

CORPORATE SOCIAL RESPONSIBILITY KEY PERFORMANCE INDICATORS

Environment

Worldwide energy consumption

Giga watt-hours (GWh)

753 856 898

Normalized worldwide energy consumption

GWh per $8n sales

30.4 30.1 25.7

Greenhouse gas emissions

1000 tons of carbon dioxide (tCO2)

312 349 311

Product recycling

Tons of equipment

n/a 4516 7102

CORPORATE SOCIAL RESPONSIBILITYKEY PERFORMANCE INDICATORS

Social

Social Investment

Total corporate wide and foundation cash and in-kind contributions

$65 Million

$115.5 Million

$116.8 Million

Employee volunteerism

Number of hours volunteered by employees

235,000

160,000

130,000

Educational output

Number of students enrolled worldwide in Cisco Networking Academy

459,723

466,935

501,019

Social and Economic investment

Number of countries Cisco currently invests programs in

n/a 165 160+

PART

FOUR:

CURRENT

OVERALL

POSIT

ION

I N T E R N A L S T R E N G T H S , W E A K N E S S E SS T R A T E G Y C H O I C E ( G R A N D S T R A T E G Y M A T R I X )O V E R A L L P R O B L E M / S U C C E S S S T A T E M E N T

Strengths:

• Strong Market Position (9)

• Strategic alliances (9)

• Robust Balance Sheet (9)

• Human Network/Smart Grid (9)

• Strong Management (8)

Weaknesses:

• Lack of presence in consumer market (8)

• High pricing - cheaper alternatives(8)

• Constant re-engineering (7)

• Brand Recognition (6)

• Acquisition Integration (9)

INTERNAL STRENGTHS AND WEAKNESSES

Avg. ~ 44/5 = 8.8 Avg. ~ 38/5 = 7.6

S-W ~ 8.8 – 7.6 = 1.2

SWOT MATRIX AND GRAND STRATEGIES

+10 +9 +8 +7 +6 +5 +4 +3 +2 +1 0 -1 -2 -3 -4 -5 -6 - 7 -8 -9 -10

+10

+9

+8

+7

+6

+5

+4

+3

+2

+1

-1

-2

-3

-4

-5

-6

-7

-8

-9

-10

Strengths

Threats

Opportunities

Weaknesses

Figure 6.2SWOT Matrix and Grand Strategies

Growth

DivestMaintenance

Harvest

1. Concentration

2. Horizontal Integration

3. Vertical Integration

4. Concentric Diversification

1. Concentric Diversification

2. Conglomerate Diversification

3. Joint Ventures

1. Turnaround or Retrenchment

2. Concentric Diversification

3. Divest

4. Liquidation

1. Reformulation ofConcentration

2. Horizontal Integration

3. Divest

4. Liquidate

Cisco – (1.2, 0.8)

GENERAL STATEMENT OF CONDITIONS

• Leader in almost all of our product markets

• Strong strategic alliances with MSFT, IBM, AT&T, Dell, Intel

• All sales in all geographic locations went up

• Low market share in consumer products

• Strategy of buy, build and partner

• Strong financial position

PART

5:

STRAT

EGIC A

SSESSMENT

L O N G - T E R M P R O S P E C T S A N D O P T I O N SS H O R T - T E R M P R O S P E C T S A N D O P T I O N SH O W S T R A T E G Y O P T I O N S S U P P O R T L O N G T E R M S U R V I V A L .S U M M A R Y

LONG-TERM SUCCESS – CONSUMER PRODUCT• Although Cisco has a huge line of products and

services a long -term goal would be to improve their consumer products.

• Cisco can go about that by developing brand recognition within their consumer market.

• Market different products:

• http://www.theflip.com/en-us/products/design-your-own.aspx

LONG-TERM SUCCESS – SMART GRID

• 49% of cyber security threats to the electrical infrastructure initiate

from breaches of physical security.

• Cisco partnered with German electricity company Yello Strom to

launch a smart-grid pilot project in 70 German homes and

businesses.

• Eliminate blackouts and brownouts

• Promises to be a $20-billion-a-year business

LONG-TERM SUCCESS – THE HUMAN NETWORK

The Human Network - this

SHORT TERM IMPERATIVES

Company Market Opportunity

Pari Networks Network Management

Inlet Technologies Video

MOTO Development Group Consumer

Linesider Technologies Network Management

Arch Rock Corporation Smart Grid

BAMG

SUSTAIN

ABILITY

EXERCIS

E

CISCO S

YSTE

MS

1. RESPONSES TO CDPROJECT.NET

2. OTHER RELATED GOALS & PERFORMANCEGREEN GOALS• Optimize business operations and cut costs

• Extend lifecycle / reduced power consumption• Optimized processes• Simplified architectures

• Reduce Greenhouse gas emissions• Innovative software added to the Cisco Catalyst switching

portfolio • Available for customers to download• This reduces GhG emissions, saves energy and reduces

costs

GOALS CONTINUED• Reduce energy consumption and cost

• Power management• Tracking and reporting• Infrastructure consolidation

• Comply with government directives

• Recycling• Use end-of-life programs that reduce the overall impact of the

environment• These end-of-life programs are designed to reuse or harvest the

material commodities contained in the equipment collected and return those materials to the market where they are made into new products

• Create competitive differentiation • Virtual worker• Remote collaboration• Resource virtualization

3. SMART GRID

Smart Grid

4. SUPPLIER ENVIRONMENTAL RESPONSIBILITYGlobal Supplier Enrollment Package

• Supplier Profile Form, EFTP Enrollment Form, Certifications, Tax Requirements, and Supplier Diversity Policies

• Certifications• Data Usage and Protection Certificate (Certificate I)• Code of Ethics Certificate (Certification II)• Supplier Environmental Health and Safety Certificate

(Certificate III)

• Supplier Diversity Policies• Cisco believes purchasing products from small, women-

owned, small disadvantaged, minority, disabled veteran, and HUBZone enterprises are key to the economic vitality of both Cisco and the community.

5. DOING ENOUGH?

Yes, we think they are doing enough because:

• They have produced many programs that make them socially and ethically responsible.

• Optimize operations• Reduce GHG emissions• Reduce energy consumption• Recycle • Create differentiation

• Supplier certifications and environmental requirements.

ARE THEY CHALLENGED?

"Are they challenged? Absolutely. But outside of Apple and Google, we don't see a company in the technology space that is as well positioned for growth.“

-Unknown

ANY QUESTIONS?