2. CISCO SYSTEMS - INTRODUCTION
• Founded in 1984
• Incorporated on December 10, 1984
• Have 72,935 employees
• US$ 48.607 billion revenue in 2012
• Corporate headquarters located in San Jose, California
• 32 factories worldwide, 30 of them are outsourced.
• Spends nearly $5.8 billion a year in R&D
3. HP - INTRODUCTION
• Founded in 1939
• Incorporated on January 1, 1939
• Have 331,800 employees
• US$ 120.357 billion revenue in 2012
• Corporate headquarters located in Palo Alto, California, United
States
• Spends nearly $3 billion a year in R&D
5. FRIENDS OR FOES?
•
Bitter data center and networking rivals Cisco and HP collaborated to
develop a switch for HP’s blade server systems to address the needs of
joint customers.
•
HP points out that it has a lot of joint customers using HP servers and
Cisco switches.
•
Rivals in
• CLOUD Computing.
• Networking Business- switches , routers
6. HP SWOT
STRENGTH
1.Employee strength of 3,50,000
worldwide
2. It has maximum market share in
the PC market
3. It’s consumer centric approach
makes it a reliable choice
4. It has got good after sales service
which helps to maintain good
consumer relationship
5. It’s ability to bring out news designs
and innovation at affordable cost
6. Good distribution network across
the world
WEAKNESS
1. Market share growth is slow
due to competition; Fake
products/ imitations affects
sales
2. Due to mass production it is
unable to provide customize
solutions to the customers
3. Its lagging in digital
entertainment market
7. OPPORTUNITY
1. With increase in IT
awareness the scope for
supply of desktops and
laptops is increasing
2. It has opportunity for
growth in service industry
because it has bought
“EDS” which is world’s
No. 2 service provider
THREATS
1. People are becoming more
cost conscious so the profit
margins have become low
so pricing is an issue
2. With increase in number of
local players there is threat
of component pricing
3. Due to economic downturn,
increase competition and
saturated market there is
slow revenue growth
8. CISCO SWOT
STRENGTH
1. Geographically Diverse
Business
2. Economies of scale lower cost
and increases margin
3. Diversified into many
segments and tapping
sophisticated markets
4. Market leading position brings
many benefits
5. Robust financial performance
6. Known for its strong R & D
division
7. A culture that experiments
produces better long term
values
WEAKNESS
1.Declining storage
networking market
2. Weak presence in
BPO
technologies/mark
ets compared to
global leaders
9. OPPORTUNITY
THREATS
1.Expansion through
Strategic Alliances
and Acquisitions
2. Smart grid
infrastructure could
increase demand
3. Wi-Fi Home Calling and
mobile broadband
4. Data intensive
applications
5. Data Mining
1.The use of cloud
servers is lowering
sales and especially
profits margins for
cisco's core business.
2. Open Source
Competitors
3. High competitive
rivalry
4. Virtualization
10. NET INCOME TRENDS CSCO & BENCHMARKS
$10,000.00
Net Income (in Millions)
$8,000.00
$6,000.00
Cisco
$4,000.00
HP
Juniper
$2,000.00
$2005
Company Name
$(2,000.00)
2006
2007
2008
2009
2010
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
11. KEY INCOME STATEMENT DATA FY2010
HP
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 - Excluding
Extra Items
$
3.78
$
1.36
$
1.18
Diluted EPS Excluding Extra Items
$
3.69
$
1.33
$
1.15
Net Income (Loss)
$
8,761.00
$
7,767.00
$
618.40
14. MARKET PLAYERS
Competitors that you might see in each technology segment are listed
below. This list of competitors is illustrative, not exhaustive.
Small Business
Medium Business
Security
Check Point
Cisco
SonicWALL
Tipping Point
WatchGuard Technologies
Wireless
Aruba Networks
Cisco
D-Link
Meru Networks
NETGEAR
3Com
Alcatel-Lucent
Aruba
Networks
Cisco
Switching
Cisco
D-Link
HP ProCurve
3Com
Check Point
Cisco
Juniper Networks
Avaya/Nortel
3Com
Alcatel-Lucent
Cisco
Juniper Networks
Avaya/Nortel
HP ProCurve
Meru
Networks
Avaya/Nortel
15. HP
The client base is divided into 4 categories:
HP Zero clients- Low cost, Business at schools.
Hp Smart Zero clients- Simple management by setting up the server.
Hp Flexible thin clients- Powerful computing, slim design
HP mobile clients- access anything, anywhere at jet speeds.
CISCO
Active collaboration with TED.
Campaign “Tomorrow starts here”- Focus on Layer Technology Augmented
Reality.
Sports Science- NBA(Basketball) and Tennis.
http://www.youtube.com/watch?v=6RblcQLXwHw
16. CISCO SMART SERVICES FOR SMALL AND
MEDIUM BUSINESS
Cisco Smart Services for Small and Medium Business are a portfolio of
services for small and medium business customers. This portfolio provides a
range of options from resale to jointly delivered services.
17. 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..
CISCO
•
Timing Tactics
Historically a first mover
supported by being a first
mover in technology. They
specialize in
routers, switches, wireless, s
ecurity, optical
networking, etc. Cisco is
also considered a industry
leader.
HP
•
Timing Tactics
HP is in Computer business
by innovation new products
and technology.
18. CISCO
•
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.
HP
•
Market Location Tactics :
Offensive
HP has always been known
to take a frontal assault.
They go head to head with
its competition.
20. HP MARKET LEADER
•
HP is the #1 vendor in worldwide server shipments.
•
HP has a commanding lead in the total blade server market, with a
44.8% revenue share
•
HP ProLiant is the x86 server market share leader in both factory
revenue and units
•
HP is #1 in Windows® revenue and units worldwide.
•
HP is #1 in Linux® revenue worldwide.
21. CURRENT CORE COMPETENCIES- CISCO
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…)
Smart-grid technology (form of routing or switching) as noted by CEO John
Chambers.
22. CURRENT CORE COMPETENCIES- HP
•
broad portfolio of products and services,
•
innovation technology
•
research and development capabilities,
•
availability of products directly from HP or through HP channel
partners.
23. DRIVER FOR CORE COMPETENCIES- HP
•
trust in people & individual responsibility,
•
decentralization & open communication,
•
continual employee development and education
•
joint problem solving & emphasis on team work
•
entrepreneurial culture
•
focus on contributions to science, industry &society
24.
25. HP/3COM
HP ProCurve is often seen as a competitor in
situations where the customer:
Can tolerate a reasonable degree of network
downtime or degradation
Sees no value in leading-edge networking and
refuses to pay for it
HP Sales people position the Cisco warranty as
being shorter than the ProCurve Warranty with no
cover on software updates.
Customers feel that the ProCurve offering consists of
products and services that deliver the simple
capabilities they need, at a low cost, and that the
lifetime warranty is enough for their needs
HP might also offer ProCurve Care Packs service
offerings to provide support beyond the warranty.
The Truth about the
Cisco Warranty
• Cisco software
updates are available
on Cisco.com to
guest users at no
charge
• The Cisco warranty
duration for Cisco
Catalyst 2900 and
3500 Series Switches is
a limited lifetime
warranty
26. STRATEGIES FOR SELLING CISCO SERVICES
AGAINST PROCURVE
Offer Cisco Smart Foundation service to
customers with the basic buyer profile
Cisco Smart Foundation provides an affordable
support service for customers whose networks are
important, but network support is not mission
critical
Offering this service will create an even playing
field with the HP ProCurve lifetime warranty at a
reasonable cost and provide more
comprehensive support than the ProCurve
warranty alone
Smartnet Service is a great fit for coverage of
core and data center solutions and provides a
compelling offer over the HP ProCurve’s Care
Packs in service delivery capabilities
Propose Cisco Smart
Foundation to create
parity between Cisco
and the HP ProCurve
warranty.
Offer a multiyear Cisco
Smart Foundation Service
agreement to create an
even more attractive
offer with as much as a
40 percent discount for a
five-year contract.
27. STRATEGIES FOR SELLING AGAINST THE
COMPETITION
Identify your customer’s
buyer profile. Offer the
appropriate service for
your customer’s buyer
profile.
Take the high road – don’t
bash the competition.
Solve business challenges
by offering solutions. Keep
the focus on the customer
and solving their
problem, not selling and
convincing them of the
rightness of a given
capability over another or
arguing about price.
Learn about the Cisco
Smart Services for Small
and Medium Business
portfolio and sell the value
of Cisco Services.
Emphasize Cisco’s industry
leadership and financial
stability.
Address competitive issues
upfront. Be confident and
challenge the customer to
critically examine
comparable competitive
offerings.
Take advantage of Cisco’s
resources for partners.
Cisco offers training
resources, incentives, progr
ams, and tools to help you
build or expand a service
practice or sell services
more effectively.
28.
29. IMPACT ON PRESS RELEASE
Different core
competence
Threat from competitor
30. CISCO
Issues:
Lack of awareness of
the names or
categories of
products it sells
Non-technical people
making buying
decisions
Focus more on
technology
Strategies
Fun offerings using
interactive
games, videos
and virtual events
Benefits vs
technology
Innovation in case
studies
One-to-one launch
31. HEWLETT PACKARD
Innovation in new programs and business model for its channel
partners
$1.5 billion worldwide in channel programs to reward performance
The company rationalized and simplified sales and technical
certifications in PartnerOne program.
HP also extended partner programs to increase cloud opportunities
for resellers, service providers and independent software
vendors (ISVs) under its CloudSystem Ready Program
Additional focus on demand and simplicity in partner engagement
32. 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
33. FUTURE OUTLOOK
Utilize technologies such as unified communication and telepresence
Technology architecture approach to enable gains
•
market share
•
sustainable competitive advantage
•
greater share of customer It budget
Strategy
•
identify, invest and position to capture customer- driven market transitions
•
constant innovation enable building, buying and collaborating with partners who
also improve productivity and quality
•
differentiated market approach to tie together technology business
architectures
•
cross functional teamwork and initiatives to drive executive across products
value- added services customer segments and geographic
