Cisco Systems: Managing the Go-To-Market Evolution

Cisco Systems: Managing the Go-to-Market Evolution

Modern Day networks are built upon switches and routers and hence even after Dot com bubble burst of 2001- 02, other than a temporary low down in the demand switch and router market is on the rise. Portfolio consists of basic solution offering for small business to high end solutions for Large businesses. Cisco uses high touch approach by system engineers and Account manager to generate Demand.  

Cisco is the market leader in switches and router and with demand growing in present market situation Cisco has strengthened its Sales Channels by ways of re- engineering and strategic links with the partners.

Cisco’s go-to-market evolution:

Post Dot com bubble burst Cisco’s re- engineering process involves switching from Volume based approach to value based, cutting down on resellers, revamping incentive structure and offering post sales service to the customer.

Cisco’s five tier segmentation of the customer depending upon opportunity they offer to the Company, helped them in serving them in a unique manner as per their requirement. Cisco also pushed itself into adjacent markets by making go- to- market pyramid more complex.

Cisco’s product portfolio is very well differentiated and no substitutability exist among themselves.

Pyramid Model:

Micro level segmentation has provided an edge to the marketing team and Cisco to implement focussed strategies on level basis. It allowed better handling of channel partner and dealer’s concerns in a competitive environment.

But at the same time existing model lacks ability to reward highly qualified channel partners fairly and efficiently.

Problem:

Evolution of Go- To Market strategy and implementation of pyramid model (customized) in order to avoid inter channel conflict

The VoIP market has high growth potential, there are cost advantage giving a clear indication of demand to increase in future also because of high channel margins, but Cisco’s go-to-market has resulted in decelerated growth however.

Very small difference in discount (2%) currently offered at different pyramid models.

Recommendations:

• Target sales to be kept minimum at each pyramid level.
• Give more emphasis on VoIP as a major part of product portfolio and avoid channel conflicts emphasizing sales through data VARs
• End of selling period performance rewards to channel partners in order to avoid inter channel price conflicts.
• Core networking product market to be done through direct sales in to order to ensure the technical expertise and customer satisfaction offered by workforce.
• Efficient handling and reachability of small home networking order exploiting internet channels.
• Support of CCIEs for Small and Medium business.