Cisco Case Study

Problem definition

Cisco is a world leader in networking solutions for enterprises, small businesses, down to home offices. It specializes in router and switcher products, which prices range from under one hundred dollars up to one million dollars. The traditional distribution channel for Cisco is through direct sells to enterprise clients and serve medium to small businesses through resellers. Recently, it acquired Linksys so the company can also reach individual homes and home offices. The current goal of the company is to evolve its go to market strategy, and implement a customized its pyramid strategy. There are several problems Cisco must consider, one is that service providers are doing a router dumping strategy as they receive the Cisco products at a lower price, and this is affecting many of the Cisco certified resellers' ability to survive and its ability to serve customers. These resellers are important to Cisco as they're the first line of personalized service and customer service, and they add value to Cisco products. Another problem Cisco must consider is shall they provide VoIP products. The decision to go into such a market might upset many existing business partners as they believe such product would cannibalize their products and services. Cisco would have a very tough time to push VoIP products alone without the help of any partners especially not a telephone service provider would actually partner up and help to distribute such product. Lastly, Cisco is considering using web to directly sell to end users. This could upset and destroy some the relationship between Cisco and its many resellers that focuses on small companies and home users, as this take away their value and business opportunities. Overall, Cisco must evolve its distribution and go to market strategy without ruining its current relationship with its business partners.

Alternatives

1. Cisco would focus its partnerships with the big companies such as large telephone or internet service providers. In this alternative, Cisco would continue allowing these companies to sell its products at a lower price in exchange for the volume they sell. This would continue decreasing the number of small resellers. The remaining small resellers would focus on companies that need personalized services. In relation to the pyramid, this would combine the middle two layers as they would be served by one channel. Cisco would refrain from entering the VoIP market, as this would upset its relationship with many partners. Also, Cisco could use web to reach the consumers that are not being served by these big companies and providers, and are left in the void left by the departure of many small certified resellers.

2. Cisco would try to balance its relationship with the big service providers and its small resellers. Cisco would not use volume as an indicator to how much discount the sellers would